UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              ---------------------

                                  FORM 10-KSB405

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the fiscal year ended March 31, 1999

                         Commission file number 0-24606

                             NORTHWEST EQUITY CORP.
        (Exact name of small business issuer as specified in its charter)

         Wisconsin                                             39-1772981
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                             Identification No.)



 234 Keller Avenue South
 Amery, Wisconsin                                                54001
(Address of principal executive offices)                       (Zip code)

                                 (715) 268-7105
              (Registrant's telephone number, including area code)

         Check whether the issuer (1) has filed all reports required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter  period that the Registrant was required to file such report(s) and
(2) has been subject to such filing requirements for the past 90 days.

                              (1) Yes __x__ No_____
                              (2) Yes __x__ No_____

         Check if  disclosure  of  delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form
10-KSB405 or any amendment to this Form 10-KSB405. x

         State  issuer's  revenues for its most recent  fiscal year:  $8,517,000
(Total interest and dividend income and total non-interest income).

         As of May 31, 1999, there were issued and outstanding 825,301 shares of
Common Stock of the Registrant.  The aggregate  market value of the voting stock
held by non-affiliates  of the Registrant,  computed by reference to the average
of the bid and asked  price of such shares of Common  Stock as of May 31,  1999,
was $19 million. Solely for purposes of this calculation, all executive officers
and directors of the Registrant  are considered to be affiliates;  also included
as "affiliate  shares" are certain shares held by various employee benefit plans
in which the trustee are  directors of the  Registrant or are required to vote a
portion  of  unallocated  shares  at the  direction  of  executive  officers  or
directors of the Registrant.  The exclusion from such amount of the market value
of the  shares  owned by any  person  shall not be deemed  an  admission  by the
Registrant that such person is an affiliate of the Registrant.

                           DOCUMENTS INCORPORATED BY REFERENCE

Parts II and IV of Form 10-KSB405: Portions of the Annual Report to Shareholders
for the fiscal year ended  March 31, 1999 are  incorporated  by  reference  into
Parts II and IV hereof.

Part III of Form 10-KSB405: Portions of the Proxy  Statement for the 1999 Annual
Meeting of  Shareholders are incorporated by reference into Part III hereof.



                                       1
<PAGE>




PART I

Forward-Looking Statements

        When used in this Annual Report on Form 10-KSB405 or future filings with
the Securities and Exchange  Commission,  in quarterly reports or press releases
or other public or shareholder  communications,  or in oral statements made with
the approval of an authorized  executive  officer,  various words or phrases are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private Litigation Reform Act of 1995. Such  forward-looking  statements include
words and  phrases  such as "will  likely  result,'  "are  expected  to,"  "will
continue," "is anticipated,"  "estimate,"  "project," or similar expressions and
various  other   statements   indicated  herein  with  an  asterisk  after  such
statements. The Company wishes to caution readers not to place undue reliance on
any such forward-looking  statements,  which speak only as of the date made, and
to advise  readers that various  factors  could affect the  Company's  financial
performance  and  could  cause  actual  results  for  future  periods  to differ
materially from those  anticipated or projected.  Such factors include,  but are
not  limited  to: (i) general  market  interest  rates,  (ii)  general  economic
conditions,  (iii)  legislative/regulatory  changes,  (iv)  monetary  and fiscal
policies of the U.S. Treasury and Federal Reserve, (v) changes in the quality or
composition  of the Company's loan and  investment  portfolios,  (vi) demand for
loan products,  (viii)  competition,  (ix) demand for financial  services in the
Company's  markets,  and (x)  changes  in  accounting  principles,  policies  or
guidelines.

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


ITEM 1.  DESCRIPTION OF BUSINESS

General

         Northwest  Equity Corp., a Wisconsin  corporation (the "Company" or the
"Registrant"),  is the holding  company for Northwest  Savings Bank, a Wisconsin
chartered  stock  savings  bank  (the  "Bank").  The  Bank is  regulated  by the
Wisconsin  Department  of  Financial  Institutions  (the  "DFI") and the Federal
Deposit  Insurance  Corporation  (the  "FDIC").  The Company is regulated by the
Federal  Reserve Board  ("FRB").  The Bank was organized in 1936,  and has three
full service offices located in Polk, St. Croix and Burnett Counties, Wisconsin.
Because the Company's only significant business operations are that of the Bank,
the business of the Bank is essentially the only business of the Company.

         The Bank is a  community-oriented,  full-service  financial institution
offering  a  variety  of  retail  financial  services  to meet the  needs of the
communities it serves.  The Company's  principal business consists of attracting
funds in the form of deposits and other  borrowings  and  investing  such funds,
primarily in  residential  real estate loans,  mortgage-backed  securities,  and
various types of commercial and consumer  loans.  At March 31, 1999, the Company
had  total  assets  of $97.6  million,  total  deposits  of $62.0  million,  and
shareholders' equity of $12.4 million. The Bank is a member of the FHLB-Chicago,
which is one of the twelve  regional  banks that  comprise the FHLB system.  The
Company's  executive office is headquartered at 234 South Keller Avenue,  Amery,
Wisconsin  54001.  Its  telephone  number at that address is  715-268-7105.  Its
E-mail address is (nwsbank@win.bright.net).

         The  Company's  primary  sources of funds are  deposits,  repayments on
loans and  mortgage-backed  and related  securities,  and,  to a lesser  extent,
advances from the FHLB-Chicago.  The Company's deposits totaled $62.0 million at
March  31,  1999.  The  Company  utilized  these  funds to invest  primarily  in
one-to-four  family  residential  loans  and,  to  a  lesser  extent,  consumer,
commercial  and other loans,  and to invest in  mortgage-backed  securities  and
other investment securities.

         The  Company's  strategic  business plan  provides for  investments  in
mortgage-backed  securities  in addition  to its  investments  in United  States
Treasury and agency securities.  Management  believes this investment  portfolio
provides  numerous  benefits,  including  the  ability to provide  and  maintain
adequate  regulatory  liquidity  levels,  maintain  a balance  of high  quality,
diversified  investments,  and  better  manage  the  interest  rate  risk of the
Company.  At March 31, 1999, the Company's  mortgage-backed  securities  totaled
$6.0 million and the Company's investment securities totaled $3.4 million.



                                       2
<PAGE>



Market Area and Competition

         The Company offers a variety of deposit products, services and mortgage
loans primarily in northwestern Wisconsin.  The Company's main office is located
at 234 South  Keller  Avenue,  Amery,  Wisconsin.  The City of Amery is  located
approximately  40 miles  northeast of Minneapolis and St. Paul,  Minnesota.  The
Company, in addition to its Amery office, has two full-service  branches. One is
located in New Richmond and the other in Siren, Wisconsin.  All of the Company's
locations  are in  counties  generally  characterized  as  rural  with  a  total
population of approximately 100,000.

         The  Company  has  significant  competition  in both its  mortgage  and
consumer  lending  business,  as well as in attracting  deposits.  The Company's
primary  competition for loans are principally from other savings banks,  thrift
institutions,  mortgage banking  companies,  insurance  companies and commercial
banks. Its most direct competition for deposits historically has come from other
savings banks,  thrift  institutions,  commercial banks, and credit unions.  The
Company  has  faced   additional   competition   for  funds  from  a  number  of
institutions,  including the  availability of short-term  money market funds and
other  corporate and  government  securities  funds  offered by other  financial
service companies, such as brokerage firms and insurance companies.

Lending Activities

    General

         The  largest  component  of the  Company's  gross  loan  receivable  of
$73.9 million at  March  31,  1999,   was  first   mortgage  loans  secured  by
owner-occupied  one-to-four family residences and totaled $54.2 million at March
31, 1999,  or 73.4% of net loans  receivable.  Other real estate loans were $8.7
million  or 11.8% of net  loans  receivable  at March  31,  1999.  Of net  loans
receivable,  $59.7million  or 80.8% were ARM loans.  As part of its  strategy to
manage interest rate risk, the Company originates  primarily ARM loans that have
short and intermediate-term  maturities for its own loan portfolio.



                                       3
<PAGE>



Composition of Loan Portfolio

    The following table sets forth the composition of the Company's loan
portfolio, including loans held for sale, in dollar amounts and in percentages
of the gross loan portfolio at the dates indicated.
<TABLE>

<CAPTION>

                                                                             At March 31,
                                        ------------------------------------------------------------------------------------
                                                 1999                         1998                       1997
                                         Amount        Percent        Amount       Percent        Amount      Percent
                                                                       (Dollars in thousands)
<S>                                   <C>            <C>           <C>           <C>           <C>          <C>

Real estate loans:
    One-to-four family                  $54,223         73.38%       $58,120        73.64%       $55,581       71.14%
    Multi-family                            627          0.85%           536         0.67%           931        1.19%
    Commercial                            5,944          8.04%         5,261         6.67%         6,443        8.25%
    Construction and land                 2,094          2.83%         2,785         3.53%         3,299        4.22%
                                        --------       --------      --------      --------      --------     --------
      Total real estate loans            62,888         85.10%        66,702        84.51%        66,254       84.80%
                                        --------       --------      --------      --------      --------     --------
Consumer loans:
    Home equity                               -             -              -            -              -           -
    Automobile                            5,248          7.10%         5,706         7.23%         4,856        6.22%
    Credit card                             265          0.36%           312         0.40%           304        0.39%
    Other consumer loans                  1,596          2.16%         1,809         2.29%         2,047        2.62%
                                        --------       --------      --------      --------      --------     --------
       Total consumer loans               7,109          9.62%         7,827         9.92%         7,207        9.23%
                                        --------       --------      ---------     --------      --------     --------
Commercial loans                          3,899          5.28%         4,397         5.57%         4,663        5.97%
                                        --------       --------      ---------     --------      ---------    --------
       Gross loans receivable            73,896        100.00%        78,926       100.00%        78,124      100.00%
                                        --------       ========      --------      ========      ---------    ========
Add:
    Accrued interest, net                   456                          492                         448
Less:
    Loans in process                          -                            -                           -
    Deferred fees and discounts             (31)                          (3)                         (8)
    Allowance for loan losses              (375)                        (484)                       (461)
                                        ---------                     --------                    --------
       Total additions/deductions            50                            5                         (21)
                                        ---------                     --------                    --------
         Loans receivable, net          $73,946                       $78,931                    $78,103
                                        =========                     =========                 ==========

</TABLE>




                                       4
<PAGE>





         Loan Maturity

                  The  following  table  shows the  contractual  maturity of the
Company's loan and mortgage-backed and related securities portfolio at March 31,
1999.  Loans  that have  adjustable  rates are shown as being due in the  period
during which the underlying contracts mature. Demand loans that have no schedule
for repayment and no stated maturity are reported as due in one year or less.
The  table  does  not  include  estimated  prepayments  or  scheduled  principal
amortization.





<TABLE>

(CONTRACTUAL MATURITY)
                                                                              At March 31, 1999
                                         ------------------------------------------------------------------------------------------
                                                                                                                  Total
                                                                                                                Mortgage-
                                         One-to-                Commercial  Construction                        Backed and
                                          Four       Multi-        Real         and                              Related
                                         Family      Family       Estate       Land    Commercial    Consumer   Securities   Total
                                         ------      ------       ------       ----    ----------    --------   ----------   -----
<CAPTION>
<S>                                    <C>          <C>          <C>         <C>      <C>            <C>        <C>         <C>

Amounts due :
    Within one year                      $1,123       $ -            $3       $1,573    $1,912         $765        $ -       $5,376
                                        --------     -----       -------     -------   --------      -------    --------    -------
After one year:
    One to three years                    1,698         -           746            0     1,079        2,617          -        6,140
    Three to five years                   2,856         -           225            0       200        3,325          -        6,606
    Five to ten years                     4,182         -         1,694            0       708          311        995        7,890
    Ten to twenty years                  11,231         -         1,259           89         -           37      1,842       14,458
    Over twenty years                    32,102       627         2,017          432         -           54      3,200       39,432
                                        --------     -----       -------     --------  --------      -------    -------     -------
        Total due after one year         53,069       627         5,941          521     1,987        6,344      6,037       74,526
                                        ========     =====       =======     ========  ========      =======    =======     =======
        Total amounts due                54,192       627         5,944        2,094     3,899        7,109      6,037       79,902
                                        ========     =====       =======     ========  ========      =======    =======     =======
Less:
    Allowance for loan losses               (50)       (1)          (12)          (2)     (224)         (86)         -         (375)
                                        --------     -----        ------     --------  --------      -------    -------     -------


Loans receivable and mortgage-
    backed securities, net              $54,142      $626        $5,932       $2,092    $3,675       $7,023     $6,037      $79,527
                                        ========     =====       ======      ========  ========      =======    =======     =======

</TABLE>



                                       5
<PAGE>



         The  following  table sets forth at March 31, 1999 the dollar amount of
all loans and  mortgage-backed  and related securities due after March 31, 2000,
such  loans and  whether  such loans have  fixed  interest  rates or  adjustable
interest rates.

                                        ---------------------------------
                                            Due After March 31, 2000
                                        ---------------------------------
                                        ---------------------------------
                                          Fixed   Adjustable   Total
                                        ---------------------------------
                                                 (In thousands)
  Mortgage loans:
    One-to-four family                   $4,991    $48,109    $53,100
    Multi-family                              -        627        627
    Commercial                            1,299      4,642      5,941
    Construction and land                    26        495        521
                                         -------   --------   --------
      Total mortgage loans                6,316     53,873     60,189

  Consumer loans                          6,027        317      6,344

  Comercial loans                           795      1,192      1,987
                                         -------   --------   --------
    Gross loans receivable               13,138     55,382     68,520

  Mortgage-backed securities              5,587        450      6,037
                                         -------   --------   --------
   Gross loans receivable and mortgage-
     backed and related securities      $18,725    $55,832    $74,557
                                        ========   ========   ========





                                       6
<PAGE>



   One-to-Four Family Mortgage Lending

         The Company's  primary  lending  activity is the  origination  of first
mortgage loans secured by one-to-four family,  owner-occupied  residences within
the Company's  primary lending area. The Company sells  substantially all of its
fixed  rate  mortgage  loans  it  originates  to  government   secondary  market
investors.  Generally,  loans sold to government  secondary market investors are
sold as whole loans with servicing retained.  Substantially all of the ARM loans
originated  by the  Company  are  retained  in its loan  portfolio.  The Company
follows Federal Home Loan Mortgage Corporation ("FHLMC") underwriting guidelines
for its one-to-four family mortgage loans.

         The Company offers a variety of rates,  fees,  origination  terms,  and
mortgage  products.  Mortgage loan  originations  are solicited from real estate
brokers, builders,  existing customers,  community groups and residents of local
communities  located in the  Company's  primary  market  area  through  its loan
origination  staff.  The Company  also  advertises  its products  through  local
newspapers,  periodicals  and  radio.  Upon  receipt  of  a  completed  mortgage
application  from a  prospective  borrower,  a  credit  report  is  ordered,  an
appraisal from an independent third party is obtained,  income and other deposit
information are verified, and, as necessary, additional financial information is
requested.  The Company requires title insurance or evidence of marketable title
and lien  position  (consisting  of an abstract and legal  opinion) on all first
mortgage loans.  Borrowers must present evidence of appropriate hazard insurance
and flood  insurance (if  applicable)  prior to the closing.  On loans with high
loan to value ratios,  borrowers are required to escrow funds on a monthly basis
for real estate taxes, hazard insurance, and, in some cases, flood insurance. On
those loans with no escrow  requirement,  the Company  verifies  payment of real
estate  taxes on a  semi-annual  basis and requires  evidence  from the borrower
annually of hazard  insurance  and flood  insurance.  The lending  policy of the
Company  restricts  mortgage  loan amounts to 80% of the lesser of the appraised
value or purchase  price of the real estate to be mortgaged to the Company.  The
Company makes mortgage loans in amounts up to 95% of the lesser of the appraised
value or purchase price,  subject to availability of private mortgage  insurance
insuring the amount in excess of 80% of the appraised  value or purchase  price.
Exceptions  to this policy are ARM loans,  in which case the Company loans up to
90% of the  appraised  value or  purchase  price  with the  appropriate  private
mortgage  insurance.  In  addition,  the  Company  may  make  loans  to its most
creditworthy customers up to 90% of the appraised value without private mortgage
insurance.  The  Company  also  currently  offers a program  for low to moderate
income families to lend up to 90% of the appraised value of the property without
private mortgage insurance,  provided certain credit, property and cost criteria
are met.

         The  Company's  underwriting   department  reviews  all  the  pertinent
information   and  makes  a  credit  decision  for  approval  or  denial  within
established  Company policy  guidelines.  Recommendations  to deny  applications
based on  underwriting  considerations  are  reviewed  by the  Company's  senior
underwriter prior to a final  disposition of the loan application.  The Board of
Directors and the Loan  Committee  review  summaries of all  one-to-four  family
mortgage  loan  applications  on a monthly  basis.  Mortgage  loans  held in the
Company's loan portfolio  generally include due-on-sale  clauses,  which provide
the Company  with the  contractual  right to deem the loan  immediately  due and
payable  in the event the  borrower  transfers  the  ownership  of the  property
without the Company's prior consent.
The Company enforces the due-on-sale clauses of its mortgage loans.

         The Company makes loans under various  governmental  programs including
the Wisconsin Housing and Economic Development Authority ("WHEDA"),  the Federal
Housing Administration,  the Farmers Home Administration ("FHA") and the Federal
Veterans Administration ("VA"). These programs generally have lower down payment
and less restrictive  qualification ratios. The WHEDA loans are serviced through
WHEDA and originated for them, and the Federal Housing  Administration,  FHA and
VA loans are sold in the secondary market with servicing retained.

         The Company offers one and three-year  ARM loans.  ARM loans  currently
adjust a maximum of two percentage  points per year with a lifetime interest cap
of six percentage  points above the initial  interest rate.  Monthly payments of
principal  and interest are adjusted  when the interest rate adjusts to maintain
full  amortization  of the mortgage loan within the remaining  term. The initial
rates offered on ARM loans fluctuate with general interest rates changes and are
determined by competitive  conditions and the Company's yield requirements.  The
Company  currently uses the one-year and  three-year,  Constant  Maturity United
States  Treasury  indexes  to  determine  the  interest  rate  payable  upon the
adjustment date of outstanding ARM loans.  The Company also originates ARM loans
with  initial  interest  rates below the fully  indexed rate by  permitting  the
borrower to choose the number of percentage  points the initial interest rate is
below the fully indexed rate (up to two points) and pay origination  points in a
corresponding  amount.  Borrowers choosing these ARM loans can effectively lower
the lifetime  interest rate cap by decreasing  the initial  interest  rate.  ARM
loans generally pose different risks than fixed rate loans. In a rising interest
rate  environment,  the  underlying  ARM  loan  payment  rises,  increasing  the
potential for default,  and the marketability of the underlying  property may be
adversely affected.  In a decreasing interest rate environment,  mortgagors tend
to refinance to fixed rate loans.  The Company's  delinquency  experience on its
ARM loans generally has been satisfactory to date.


                                       7
<PAGE>



         The  Company  has  continued  to  generate  a  significant   amount  of
adjustable rate loans. The Company's continued ability to originate ARM loans is
primarily  due to the  nature  of its  market  area,  which  includes  rural and
vacation  properties.  Loans on properties  with excessive  acreage,  hobby farm
activities or three-season  cabins  generally  cannot be sold into the secondary
market,  thus making these loans less  attractive to  competitors of the Company
that only originate loans for sale into the secondary market. Furthermore,  many
of the  Company's  customers  desiring  a loan term of  short-to-medium-duration
(i.e.,  less than ten years)  often  prefer ARM loans  because of the  generally
lower closing costs compared to fixed rate loans. The Company  generally obtains
an abstract and title opinion,  rather than title insurance, on loans originated
for retention in its portfolio and has not  experienced  losses  attributable to
the lack of title insurance.

   Commercial Real Estate Lending

         At March 31, 1999, the Company's  commercial real estate loan portfolio
totaled $5.9 million or 8.0% of net loans receivable. The commercial real estate
loans in the Company's  portfolio  consist of fixed rate and ARM loans generally
secured by small office buildings,  retail stores and farms, and occupied by the
borrower.  The Company currently originates ARM loans secured by commercial real
estate at 375 to 525 basis points above the rate on U.S. Treasury securities for
comparable maturities.  These loans typically do not exceed 65% of the lesser of
the purchase price or the appraised value of the underlying collateral. At March
31, 1999, the largest outstanding commercial real estate loan was $1.4 million.

         In   underwriting   commercial   real  estate   loans,   the  Company's
underwriting  procedures  require a review  of the  borrower's  credit  history,
income taxes, personal financial  statements,  banking  relationships,  property
management experience.  An analysis of the property is also required,  including
cash flow projections, historical operating statements,  environmental concerns,
compliance with regulations,  and prevailing market conditions. Loans secured by
commercial  real  estate  properties  involve  a  greater  degree  of risk  than
residential mortgage loans.  Payments on loans secured by commercial real estate
properties are often susceptible to adverse conditions in the real estate market
or the  economy.  The  Company  seeks to  minimize  these  risks by  originating
commercial real estate loans principally in its primary market area where it has
the ability to more closely monitor and anticipate adverse conditions.

   Commercial Lending

         The Company engages in a limited amount of commercial  business lending
activities,  generally with existing customers,  including secured and unsecured
loans and letters of credit.  At March 31, 1999, the Company had $ 3.9million in
commercial  business  loans  outstanding,  which  represented  5.3% of net loans
receivable.  Term loans are amortized  over a one to five year term and lines of
credit are reviewed annually.  Such loans generally are originated at 375 to 525
basis  points  above  the  rate  on  U.S.  Treasury  securities  for  comparable
maturities.  At March 31, 1999, the largest outstanding commercial loan was $0.6
million.

         The Company  originated a majority of the commercial  loans in its loan
portfolio in the  mid-1980's  when it hired a commercial  loan officer to expand
its activity in this area.  The Company  currently  is not actively  seeking new
commercial  lending  business and  substantially  all of its commercial  lending
consists of renewals of existing  commercial  loans. The commercial loans in the
portfolio  are  generally  performing  and,  management   believes,   adequately
reserved.

         Commercial  business loans are of higher risk and typically are made on
the basis of  borrower's  ability  to make  repayment  from the cash flow of the
borrower's business. As a result, the availability of funds for the repayment of
commercial  business  loans  may be  substantially  dependent  upon the  general
economic  environment.  The Company's  commercial business loans usually include
personal guarantees and are usually, but not always, secured by business assets,
such as accounts  receivable,  equipment  and  inventory as well as real estate.
However,  the  collateral  securing the loans may  depreciate  over time, may be
difficult  to appraise  and may  fluctuate  in value based on the success of the
business.


   Consumer Lending

         The  Company  held  $7.1 million  or 9.6%  of net loans  receivable  of
consumer loans at March 31, 1999.  Consumer  loans  generally have shorter terms
and higher interest rates than mortgage loans,  but generally  involve more risk
than  mortgage  loans because of the type and nature of the  collateral  and, in
certain cases, the absence of collateral. Consumer loans generally are dependent
on the borrower's  continuing financial stability and thus are more likely to be
affected  by  adverse  personal  circumstances.  Often the loans are  secured by
rapidly  depreciable  personal property,  such as automobiles.  Automobile loans
generally are  underwritten  in amounts up to 90% of the purchase  price for new
and used vehicles.  The term of the loans generally  cannot exceed six years for
new vehicles and five years for used vehicles. The Company's delinquent consumer
loans as a percentage of total consumer loans has been minimal.

                                       8
<PAGE>


   Multi-Family Lending

         The Company held $.6million or .85%net loans receivable of multi-family
loans at March 31, 1999. The rates charged on the Company's  multi-family  loans
typically are slightly higher than rates charged on loans secured by one-to-four
family  residential  properties.  Multi-family  ARM loans typically  adjust in a
manner similar to that of the Company's other ARM loans, although generally at a
slightly higher margin.  An origination fee equal to 1% of the principal  amount
is usually charged on such loans.

         Multi-family loans are generally  underwritten in amounts to 80% of the
lesser of the appraised value or purchase price of the underlying  property.  An
independent  appraiser  designated by the Company at the time the application is
submitted  performs  appraisals of  multi-family  properties.  In addition,  the
Company's  underwriting  procedures  require  review  of the  borrower's  credit
history,  income,  personal financial  statements and banking  relationships.  A
review of the property  includes cash flow projections and historical  operating
results.  The Company evaluates all aspects of multi-family  lending to mitigate
risk to the extent  possible.  The  Company  seeks to ensure  that the  property
securing  the loans  will  generate  sufficient  cash flow to  adequately  cover
operating  expenses and debt service  payments.  The Company obtains  individual
guarantees for substantially all of its multi-family loans.

         Loans secured by multi-family  real estate generally  involve a greater
degree of credit risk than  one-to-four  family  mortgage loans and carry larger
loan  balances.  This  increased  credit  risk is a result of  several  factors,
including  the  concentration  of  principal  in a  limited  number of loans and
borrowers,  the  effects  of general  economic  conditions  on  income-producing
properties and the increased difficulty of evaluating and monitoring these types
of loans.  Furthermore,  the  repayment of loans  secured by  multi-family  real
estate is typically dependent upon the successful  operation of the related real
estate  project.  If the cash flow from the project is reduced,  the  borrower's
ability  to repay the loans  may be  impaired.  Despite  the risks  inherent  in
multi-family real estate lending, the Company's delinquent multi-family loans as
a percentage of loans receivable has been minimal.


   Construction and Land Lending

         The  Company   offers   one-to-four   family   residential   and  other
construction  loans and land loans.  At March 31,  1999,  construction  and land
loans totaled $2.1 million or 2.8% of net loans receivable.  Construction  loans
are made to individuals  intending to occupy a home who have signed construction
contracts with a builder.  These loans have  loan-to-value  ratios not exceeding
90%. When the  loan-to-value  ratios exceed 80%, private  mortgage  insurance is
required.  The Bank offers permanent financing,  primarily one-to three-year ARM
loans,  on  residential  construction  loans  that  enables  borrowers  to avoid
duplicative  closing costs normally  associated with temporary  financing during
construction  periods and permanent  financing upon completion of  construction.
The Company has had minimal delinquent residential construction loans to date.

   Loan Approval

         Loan  approval  is  based on a  customer's  aggregate  amount  of loans
outstanding, including the loan application under review. One member of the Loan
Committee and a loan officer may approve loan amounts of $100,000 or less.  Loan
amounts exceeding $100,000 up to $500,000 require the approval of two members of
the Loan  Committee  and a loan  officer.  Any single  loan  exceeding  $500,000
requires approval from the Board of Directors and a loan officer. Any loans over
$25,000 that exceed the aggregate amount of $625,000 require Board approval.


   Originations, Purchase and Sales of Loans

         Mortgage  loans are  solicited  from  real  estate  brokers,  builders,
developers,  existing or past customers,  and residents of the local communities
located in the  Company's  primary  market  areas.  The Company  advertises  its
mortgage  products in  newspapers  and other media in addition to using its loan
officers to directly solicit potential borrowers. The following table sets forth
the Company's loan originations,  purchases,  sales and principal repayments for
the periods indicated. Mortgage loans and mortgage-backed and related securities
held for sale are included in the totals.




                                       9
<PAGE>





<TABLE>


                                                                  Fiscal Years Ended March 31,
                                                                --------------------------------
<CAPTION>

                                                               1999             1998          1997
                                                                          (In thousands)
<S>                                                         <C>             <C>           <C>

Mortgage loans (gross)
    At beginning of period                                    $66,702         $66,254       $59,604
                                                              --------        --------      --------
     Mortgage loans originated:
       One-to-four family                                      36,564          25,216        21,223
       Commercial                                               1,987             226         1,072
       Multi-family                                               472               -             -
       Construction and land                                    8,740           3,809         6,690
                                                              --------        --------      --------
         Total mortgage loans originated                       47,763          29,251        28,985
                                                              --------        --------      --------
       Mortgage loans purchased                                   581             368           101
                                                              --------        --------      --------
         Total mortgage loans originated and purchased         48,344          29,619        29,086
                                                              --------        --------      --------
       Transfer of mortgage loans to foreclosed
         real estate                                             (254)           (159)          (72)
       Principal repayments                                   (32,773)        (17,796)      (17,890)
       Sales of fixed rate loans                              (19,131)        (11,216)       (4,474)
                                                              --------        --------      --------
         Total reductions                                     (52,158)        (29,171)      (22,436)
                                                              --------        --------      --------
    At end of period                                          $62,888         $66,702       $66,254
                                                              ========        ========      ========

Consumer loans:
    At beginning of period                                     $7,827          $7,207        $6,897
       Consumer loans originated                                5,397           6,796         5,313
       Principal repayments                                    (6,115)         (6,176)       (5,003)
                                                               -------        --------      --------
    At end of period                                           $7,109          $7,827        $7,207
                                                               =======        ========      ========
Commercial loans:
    At beginning of period                                     $4,397          $4,663        $4,612
       Commercial loans originated and purchased                5,798           3,879         3,356
       Principal repayments                                    (6,296)         (4,145)       (3,305)
                                                               -------        --------      --------
    At end of period                                           $3,899          $4,397        $4,663
                                                               =======        ========      ========
Mortgage-backed and related securities:
    At beginning of period                                     $6,398          $7,421        $5,373
       Mortgage-backed securities
         purchased                                              2,601               -          2772
       Amortization and repayments                             (2,962)         (1,023)         (724)
                                                               -------        --------       -------
    At end of period                                           $6,037          $6,398        $7,421
                                                               =======        ========       =======

</TABLE>

                                       10
<PAGE>


<TABLE>

The following table sets forth the Company's loan originations and purchases in
various loan categories according to whether the loan is fixed rate versus
adjustable rate for the periods indicated.

                                                                            Fiscal Years Ended March 31,
                                        -------------------------------------------------------------------------------------------
                                                      1999                          1998                            1997
                                        -------------------------------------------------------------------------------------------
                                          Fixed    Adjustable   Total     Fixed   Adjustable    Total     Fixed  Adjustable  Total
                                        -------------------------------------------------------------------------------------------
<CAPTION>
<S>                                    <C>        <C>        <C>        <C>      <C>         <C>       <C>      <C>       <C>

  Mortgage loans:
    One-to-four family                   $22,828    $14,156    $36,984    12,658   $12,926     $25,584   $7,796   $13,427   $21,223
    Multi-family                               -        633        633         -         -           -        -         -         -
    Commercial                                 -      1,987      1,987         -       226         226       69     1,003     1,072
    Construction and land                  7,634      1,106      8,740     3,102       707       3,809    5,423     1,368     6,791
                                         --------   --------   --------  --------  --------    --------  -------  --------  -------
      Total mortgage loans                30,462     17,882     48,344    15,760    13,859      29,619   13,288    15,798    29,086

  Consumer loans                           5,397          -      5,397     6,781        15       6,796    5,313         -     5,313

  Comercial loans                          3,851      1,947      5,798     3,432       447       3,879    2,308     1,048     3,356
                                         --------   --------   --------  --------  --------    --------  -------  --------  -------
    Total loans originated
     and purchased                       $39,710    $19,829    $59,539   $25,973   $14,321     $40,294  $20,909   $16,846   $37,755
                                         ========   ========   ========  ========  ========    ======== ========  ========  =======

</TABLE>


                                       11
<PAGE>


   Participation Loans

         In  order  to  meet  asset/liability  management  objectives  that  are
enhanced by loans with higher rates and shorter repricing  periods,  the Company
has  purchased  from time to time  participation  interests in a variety of real
estate loans,  including  commercial real estate loans.  Prior to purchase,  the
Company reviews each  participation  to ensure that the underlying loan complies
with the Company's  lending  policy as in effect and the  loans-to-one  borrower
limitations.

         The  purchase of  participation  loans  involves  the same risks as the
origination  of the same types of loans as well as  additional  risks related to
the  purchaser's  lower level of control  over the  origination  and  subsequent
administration  of the loan.  Many of the  participation  loans purchased by the
Company  in the past also have been on  projects  located  outside  the State of
Wisconsin,  primarily in the Minneapolis/St.  Paul,  Minnesota area.  Management
does not anticipate  future  purchases to be  significant,  and will continue to
investigate purchase opportunities on an individual basis.

   Sale of Mortgage Loans

         The Company sells loans that it originates,  on a  non-recourse  basis,
into the secondary market to the FHLMC,  Federal National  Mortgage  Association
("FNMA") and WHEDA. The amount of loans sold by the Company is based upon market
conditions and the Company's asset/liability strategy. For the past three fiscal
years, the Company has sold substantially all of the fixed rate loans originated
to  governmental  secondary  market  purchasers in order to manage interest rate
risk.  For the fiscal year ended March 31, 1999,  the Company's  fixed rate loan
sales to governmental  investors  totaled $19.1 million with associated gains of
$206,000.

         The Company is subject to interest rate risk on fixed rate loans in its
pipeline from the point in time that the rate is locked with the borrower  until
it is sold into the secondary market. In a declining  interest rate environment,
the interest rate is locked in at the time of loan approval and held for sale to
take advantage of the market rate of interest. In order to minimize the interest
rate risk in a rising interest rate environment,  the interest rate is locked in
at the time of loan  approval  and a  commitment  to sell  the loan is  obtained
simultaneously.  These  loans are sold on an  individual  basis when the loan is
closed.

         All  mortgage  loans  are  made  and   underwritten   pursuant  to  the
requirements of secondary  market  investors.  The Company retains  servicing on
loans sold to FHLMC and FNMA,  receiving a servicing fee,  which  represents the
difference  between the  contract  rate on the loans sold and the yield at which
such loans are sold.  The  servicing  spread  earned by the Company is typically
0.25%.

         The Company  also acts as a conduit for loans sold to WHEDA.  For those
borrowers who qualify under WHEDA  guidelines,  the Company  originates the loan
for a $500 fee and sells the loan to WHEDA, on a non-recourse  basis,  servicing
released.

   Loan Origination, Servicing and Other Fees

         In addition to interest  earned on loans,  the Company  receives income
through  fees  in  connection   with  loan   originations,   loan  sales,   loan
modifications,  late payments,  loan servicing,  and for miscellaneous  services
related to its loans.  Income from these activities varies from period to period
with the volume and type of loans originated.

         In  connection  with the  origination  of mortgage  loans,  the Company
requires  borrower   reimbursement  for  out-of-pocket   costs  associated  with
obtaining independent  appraisals,  credit reports,  title insurance or abstract
and title opinion, private mortgage insurance and other items. While origination
fees  ranging  from zero to two points  generally  have been  quoted on mortgage
loans in  recent  years,  most of the  Company's  borrowers  typically  accept a
slightly higher interest rate and pay zero points.

         For  loans  sold  to  FHLMC  and  FNMA,   the   Company   retains   the
responsibility  for servicing such loans.  At March 31, 1999, 1998 and 1997, the
Bank  serviced  $46.3 million, $30.7 million and $25.3 million loans for others,
respectively.  Fee income  received in connection with loans serviced for others
was $94,000, $77,000 and $77,000 for the fiscal years ended March 31, 1999, 1998
and 1997, respectively.


         The  contractual  right to service  mortgage loans sold has an economic
value.  The value results from the future  income stream of the servicing  fees,
the  availability  of the cash  balances  associated  with escrow funds for real
estate taxes and insurance,  the availability of the cash from monthly principal
and interest  payments from the collection date to the remittance  date, and the
ability of the servicer to cross-sell  other  products and services.  The actual
value of a  servicing  portfolio  is  dependent  upon such  factors  as the age,
maturity and prepayment  rate of the loans in the portfolio,  the average



                                       12
<PAGE>



dollar balance of the loans,  the  location  of the  collateral  property,
the average amount of escrow funds held,  the interest rates and  delinquency
experience of the loans, the types of loans, and other factors.

Delinquencies, Nonperforming Assets and Classified Assets

   Delinquent Loans

         When a  borrower  fails to make a  required  payment  by the end of the
month in which the payment is due, the Company  generally  initiates  collection
procedures.   The  Company  will  send  a  late  notice,   and  in  most  cases,
delinquencies are cured promptly. However, if a loan becomes delinquent for more
than 60 days,  the Company  contacts the  borrower  directly,  to determine  the
reason for the delinquency and effect a cure. Where it believes appropriate, the
Company may review the condition of the property and the  financial  position of
the borrower.  At that time, the Company may: (i) accept a repayment program for
the  arrearage;  (ii) seek  evidence  of  efforts  by the  borrower  to sell the
property;  (iii)  request  a deed  in  lieu of  foreclosure;  or  (iv)  initiate
foreclosure  proceedings.  When a loan secured by a mortgage is  delinquent  for
three  or  more  monthly  installments,  the  Company  generally  will  initiate
foreclosure proceedings. With respect to delinquencies on loans sold to FHLMC or
FNMA, or insured by FHA or guaranteed by VA, the Company follows the appropriate
notification and foreclosure procedures prescribed by the respective agencies.

         On mortgage loans or loan participations  purchased by the Company, the
Company  receives monthly reports from its loan servicers with which it monitors
the loan portfolio.  The Company relies upon the servicer to contact  delinquent
borrowers,  collect delinquent amounts, and to initiate foreclosure proceedings,
when necessary, in accordance with applicable laws,  regulations,  and the terms
of the servicing agreements between the Company and its servicing agents.

         Total loans  delinquent  90 days or more  totaled  $.2 million or .3%
of loans receivable at March 31, 1999.



                                       13
<PAGE>

<TABLE>


                                  At March 31, 1999                   At March 31, 1998                   At March 31, 1997
                          ---------------------------------------------------------------------------------------------------------
                               31-89 Days    90 Days or more     31-89 Days     90 Days or more     31-89 Days     90 Days or more
                          ---------------------------------------------------------------------------------------------------------
                            Number Principal Number Principal Number Principal  Number Principal  Number Principal Number Principal
                              of    Balance    of    Balance    of    Balance    of     Balance    of    Balance     of    Balance
                             Loans of Loans   Loans  of Loans  Loans  of Loans  Loans   of Loans  Loans  of Loans   Loans  of Loans
                          ---------------------------------------------------------------------------------------------------------
<CAPTION>
<S>                         <C>    <C>       <C>     <C>      <C>     <C>     <C>       <C>      <C>    <C>        <C>     <C>

Mortgage loans:
 One-to-four family           20     $904       2      $53      22      $754      5       $109     45     $2,399      7      $179
 Multi-family                 --       --      --       --      --        --     --         --     --         --     --        --
 Residential construction     --       --      --       --       1        62     --         --      1         84     --        --
 Commercial                    2      114      --       --       6       471      3        280      6        406      2       199
                             ----  -------    ----     ----    ----     -----  -----      -----   ----     ------   ----     -----
   Total mortgage loans       22   $1,018       2      $53      29    $1,287      8       $389     52     $2,889      9       378
                             ----  -------    ----     ----    ----   -------  -----      -----   ----    -------   ----     -----
Consumer loans                24       55       3       17      31       161     32        129     39        191      9       137
                             ----  -------    ----     ----    ----   -------  -----      -----   ----    -------   ----     -----
Comercial loans                1       10       3      159       1         3      9        858      4        204      6       556
                             ----  -------    ----     ----    ----   -------  -----      -----   ----    -------   -----    -----
    Total                     47   $1,083       8     $229      61    $1,451     49     $1,376     95     $3,284     24     $1,071
                             ====  =======    =====   =====    ====   =======  =====    =======   ====    =======   =====   ======
Delinquent loans to gross            1.47%            0.31%             1.84%             1.74%             4.16%             1.36%
    loans(2)
<FN>

--------------------------
 -1    The Company discontinues the accrual of interest on loans when the
       borrower is delinquent as to a contractually due principal or interest
       payment by 90 days or more.

 -2    Excluding mortgage-backed and related securities.
</FN>
</TABLE>



                                       14
<PAGE>



   Classification of Assets

         The FDIC requires each federally insured bank to classify its assets on
a regular basis in accordance  with the  guidelines set forth in the FDIC Manual
of Examination Policies. In addition, in connection with examinations of insured
banks by the FDIC,  FDIC examiners have authority to identify  problem assets as
Substandard,  Doubtful or Loss. Substandard assets have one or more well defined
weaknesses that jeopardize the liquidation of the debt and are  characterized by
the  distinct   possibility  that  the  bank  will  sustain  some  loss  if  the
deficiencies  are  not  corrected.   Doubtful  assets  have  the  weaknesses  of
Substandard assets, with the additional characteristics that the weaknesses make
collection or  liquidation  in full, on the basis of currently  existing  facts,
conditions and values,  highly questionable and improbable.  An asset classified
as Loss is considered uncollectible and of such little value that continuance as
an  asset  of the  bank is not  warranted.  The  Company  has  adopted  an asset
classification  methodology that parallels that required by federal  regulators.
At March 31, 1999,  based upon the Company's asset  classification  methodology,
the  Company had assets  classified  as  Substandard  of $364  million,  none as
Doubtful and none as Loss.  Assets that are  classified as Loss are charged off.
The FDIC examination policies include a Special Mention category,  consisting of
assets that  currently do not expose the Company to a sufficient  degree of risk
to warrant adverse classification,  but do possess credit deficiencies deserving
management's  close  attention.  At March 31,  1999,  $238,000 of the  Company's
assets were classified as Special Mention.

   Non-Performing Assets

         Loans are placed on non-accrual status when, in the judgment of Company
management,  the  probability  of  collection of principal or interest is deemed
insufficient to warrant further accrual of interest.  The Bank  discontinues the
accrual  of  interest  on  loans  when  the  borrower  is  delinquent  as  to  a
contractually  due principal or interest payment by 90 days or more. When a loan
is placed on  non-accrual  status,  all of the accrued  interest on that loan is
reversed  by way of a charge  to  interest  income.  Accrual  of  interest  on a
non-accrual loan is resumed when all contractually past due payments are current
and when management  believes the outstanding  loan principal and  contractually
due interest is no longer  doubtful of  collection.  The Bank  discontinues  the
accrual  of  interest  on loans  more than 90 days past due,  at which  time all
accrued but uncollected interest is reversed by way of a charge to income.

         Property  acquired  by  the  Bank  as  a  result  of a  foreclosure  is
classified as real estate owned. Foreclosed properties are recorded at the lower
of the  unpaid  principal  balance  of the  related  loan  or fair  value,  less
estimated  costs to sell. The amount by which the recorded loan balance  exceeds
the fair value at the time a property is  classified  a  foreclosed  property is
charged against the allowance for loan losses.  Any subsequent  reduction in the
fair value of a foreclosed property, along with expenses incurred to maintain or
dispose of a foreclosed property,  is charged against current earnings. At March
31, 1999, the Company had $63,000 of property in real estate owned.



                                       15
<PAGE>



         Nonperforming  loans  include  loans placed on  non-accrual  status and
troubled debt restructurings. Non-performing assets include non-performing loans
and foreclosed  properties.  The following table sets forth non-performing loans
and assets.


<TABLE>

                                                                             March 31,
                                                                 --------------------------------
                                                                  1999          1998        1997
<CAPTION>

                                                                      (Dollars in Thousands)
<S>                                                             <C>           <C>         <C>

Non-accrual mortgage loans 90 days or more past due                $53         $389         $378
Non-accrual consumer loans 90 days or more past due                 17          116          128
Non-accrual commerical loans 90 days or more past due              159          858          556
Loans 90 days or more past due and still accruing                    -           14            9
Troubled debt restructurings                                         9           11            -
                                                                  -----      -------      -------
    Total non-performing loans                                    $238       $1,388       $1,071
                                                                  =====      =======      =======
Total real estate owned and in judgement, net of
    related allowance for losses                                    63          159            -
                                                                  -----      -------      -------
Total non-performing assets                                       $301       $1,547       $1,071
                                                                  =====      =======      =======
Total non-performing loans to gross loans receivable              0.32%        1.76%        1.37%
Total non-performing assets to total assets                       0.31%        1.57%        1.13%

Total classified assets                                           $602       $1,885       $1,330
Total classified assets to total assets                           0.62%        1.91%        1.40%

 Interest income that would have been recorded on non-
    performing loans if current                                    $15          $89          $59
Interest income on non-performing loans included
    in net income                                                   $3          $21          $13

</TABLE>



         As of  March  31,  1999,  management  was not  aware of any  loans  not
included in the foregoing  tables or discussed above that the borrower could not
comply with the loan repayment terms.

   Allowance for Loan Losses

         Under  federal  regulations,  when an  insured  institution  classifies
problem assets as either Substandard or Doubtful,  it is required to establish a
general allowance for loan losses in an amount deemed prudent by management.  In
addition to general valuation  allowances,  the Bank may establish specific loss
reserves  against  specific  assets  in  which a loss may be  realized.  General
allowances represent loss allowances that have been established to recognize the
inherent risks associated with lending  activities,  but which,  unlike specific
allowances,  have not been allocated to recognize  probable losses on particular
problem assets. The Bank's  determination as to its classification of assets and
the amount of its  specific  and  general  valuation  allowances  are subject to
review by the DFI and the FDIC,  either one of which can order the establishment
of additional general or specific loss allowances.

       The allowance for loan losses is  established  through a provision for
loan losses,  which reduces net interest  income.  The Company's allowance for
loan losses at March 31, 1999,  totaled  $375,000 or 61.0% of  cumulative  net
charge-offs  during the last three fiscal years.  The allowance for loan losses
is determined by multiplying  the average  balance of real estate loans;
installment and credit card loans; and commercial and other loans by the
percentage of actual loss experience for the last three years for each category
of loans plus 15% for any  substandard  loans in each  category of loans.
Substandard  loans are evaluated  individually  and actual loss percentage to
the average  balance of each  category of loans as a group.  Any  unallocated
portion of the allowance is applied to the category with the highest percentage
of loss experience for the prior three years. A self-correcting  mechanism to
reduce  differences between  estimated and actual observed losses is not
necessary since the allowance is  determined  by actual  observed  losses.  The
average balance of each category of loans reflects changes in loan
concentration.  Loan quality is reflected in the 15% allowance for any
substandard  loan. As the allowance is based on actual loss  experience and the
current level of substandard  loans, no elimination methods and assumptions are
used in  determining  the  allowance.  A change in substandard loans and the
average balance of the categories of loans will be  immediately  reflected  in
the  allowance.  The level of the allowance is equal to historical  net loss
experience plus the 15% allowance for the current level of substandard  assets.
The ratio of allowance for loan losses to gross loans receivable was 0.50%
at March 31, 1999.



                                       16
<PAGE>



         The following table sets forth activity in the Company's  allowance for
loan losses during the periods indicated.

<TABLE>

                                                                 For the Fiscal Year Ended March 31,
                                                          ---------------------------------------------------
                                                                 1999             1998             1997
<CAPTION>

                                                                       (Dollars in thousands)
<S>                                                           <C>              <C>              <C>

Balance at beginning of period                                   $484             $461             $433
Additions charged to operations:
    One-to-four family                                              -                0                0
    Multi-family and commercial real estate                         2                0                0
    Commercial                                                    291               76               75
    Consumer                                                       83               24                6
                                                                ------           ------           ------
                                                                  376              100               81
Recoveries:
    One-to-four family                                              0                0               19
    Multi-family and commercial real estate                         7                3                3
    Commercial                                                      0                0                0
    Consumer                                                        7                7                0
                                                                ------           ------           ------
                                                                   14               10               22
Charge-offs:
    One-to-four family                                              0                0                0
    Multi-family and commercial real estate                        (2)               0                0
    Commercial                                                   (413)               0              (19)
    Consumer                                                      (84)             (87)             (56)
                                                                ------           ------           -------
                                                                 (499)             (87)             (75)
Net charge-offs                                                  (485)             (77)             (53)
                                                                ------           ------           -------
Balance at end of period                                         $375             $484             $461
                                                                ======           ======           =======
Percentage of loans to gross loans receivable
    Mortgage loans                                              85.10%           84.51%           84.80%
    Consumer loans                                               9.62%            9.92%            9.23%

Ratio of allowance for loan losses to gross
    loans receivable at the end of period                        0.51%            0.61%            0.59%

Ratio of allowance for loan losses to
    non-performing loans at the end of period(1)               157.56            34.87            43.04

Ratio of net charge-offs to average gross
    loans during period                                          0.62%            0.10%            0.07%

Average gross loans outstanding                               $78,341          $79,471          $76,240

Gross loans receivable at the end of period                   $73,896          $78,923          $78,116


<FN>
-------------------------------------------

(1)      Non-performing loans include non-accrual loans, loans 90 days or more
past due and still accruing, and troubled debt restructurings.
</FN>
</TABLE>



                                       17
<PAGE>






         The following  table shows the Company's  allowance for loan losses and
the  allocation to the various  categories  of loans held for  investment at the
dates  indicated.  Allocations  to a  particular  category do not  restrict  the
Company's ability to use such allowance in any other category.

<TABLE>


                                                                           At March 31,
                                   ----------------------------------------------------------------------------------------------
                                   ----------------------------------------------------------------------------------------------
                                                1999                          1998                           1997
                                   ----------------------------------------------------------------------------------------------
<CAPTION>

                                                         Loans In                       Loans In                       Loans In
                                                         Category                       Category                       Category
                                               % of      to Total             % of      to Total             % of      to Total
                                               total       Out-               total       Out-               total       Out-
                                              Loans by   standing            Loans by   standing            Loans by   standing
                                    Amount    Category    Loans    Amount    Category    Loans     Amount   Category    Loans

                                                                       (Dollars in thousands)
<S>                                 <C>       <C>       <C>       <C>       <C>        <C>        <C>      <C>        <C>

Breakdown of allowance:
 Mortgage loans:
  One-to-four family                 $50        0.09%     73.38%    $50       0.09%      73.64%     $36      0.06%      71.14%
  Multi-family                         1        0.16%      0.85%      1       0.19%       0.67%       -      0.00%       1.19%
  Commercial/nonresidential           12        0.20%      8.04%      5       0.10%       6.67%      34      0.65%       8.25%
  Construction and land                2        0.10%      2.83%      2       0.07%       3.53%       1      0.04%       4.22%
                                    ------               -------  ------                --------   ------              --------
  Total mortgage loans                65                  85.10%     58                  84.51%      71                 84.80%

 Consumer loans                       86        1.21%      9.62%     80       1.02%       9.92%      50      0.69%       9.23%
                                                         -------
 Commercial loans                    224        5.75%      5.28%    346       7.87%       5.57%     340      7.29%       5.97%
                                    ------               -------  ------                --------   ------              --------
 Total allowance for loan losses    $375                 100.00%   $484                 100.00%    $461                100.00%
                                    =======              ======== ======                ========   =======             ========
</TABLE>







                                       18
<PAGE>



Investment Activities

   General

         The investment policy of the Company, which is established by the Board
of Directors and implemented by the Company's President,  is designed to provide
a required level of liquidity and minimize potential losses due to interest rate
fluctuations  without  incurring undue credit risk. The Company is authorized by
regulation to invest in various types of liquid assets,  including United States
Treasury  obligations,  securities  issued by various federal agencies and state
and municipal governments, deposits at the FHLB-Chicago, certain certificates of
deposit of federally  insured  institutions,  certain  bankers'  acceptances and
federal  funds.  The  Company  also  invests  in  mortgage-backed   and  related
securities,  securities  that  are  either  of  investment  grade or  issued  or
guaranteed by FHLMC, the FNMA or the Government  National  Mortgage  Association
("GNMA"), and investment grade corporate debt.

         The  Company   categorizes   the   securities   it  purchases   into  a
"Held-to-Maturity" or an "Available-For-Sale" portfolio as follows:

           1.  Securities  Held-to-Maturity.  The  Company  has the  ability and
           intent to hold these assets to maturity. Upon acquisition, securities
           are  classified as to the  Company's  intent and a sale would only be
           effected due to  deteriorating  investment  quality.  The  investment
           portfolio  is not used for  speculative  purposes  and is  carried at
           amortized  cost. In the event the Company sells  securities from this
           portfolio  for other than  credit  quality  reasons,  all  securities
           within the investment portfolio with matching  characteristics may be
           reclassified as assets held for sale.

           2. Securities Available-for-Sale. The Company does not intend to hold
           the assets to maturity  and thus are carried at fair value,  with the
           unrealized  gains  or  losses,  net of tax,  reported  as a  separate
           component of the stockholders  equity. This portion of the securities
           portfolio  is  designed to meet  anticipated  loan demand and deposit
           runoff or to take advantage of market opportunities.

         Effective April 1, 1993, the Company adopted SFAS No. 115 that requires
that the Company  classify  investments  in marketable  equity  securities  with
readily  determinable  fair  value and all  investments  in debt  securities  as
held-to-maturity,  trading or  available-for-sale.  The Company  classified  the
securities as of the date of adoption of SFAS 115 and  subsequently  at the time
of purchase  and  reviews  the  appropriateness  of the  classification  at each
reporting date as follows:

           1. Securities  Held-to-Maturity.  The Company has both the intent and
           ability to hold these debt securities to maturity. Securities in this
           category are carried at amortized cost.

           2.  Securities  Classified  as Trading.  The Company  acquires  these
           securities  with the  intent to resell  them in the near term and are
           held only for a short period of time. Securities in this category are
           carried  at fair  value,  with  unrealized  holding  gains and losses
           included in earnings.

           3.  Securities   Available-for-Sale.   This  category   includes  all
           securities not classified as held-to-maturity or trading.  Securities
           in this category are carried at fair value,  with unrealized  holding
           gains  and  losses  reported,  net of  deferred  income  taxes,  in a
           separate  component  of equity.  These  securities  may be sold,  for
           example,  in response to changes in market interest rates,  liquidity
           needs,  availability  of higher  yielding  instruments and changes in
           funding sources.

         The  investment   activities  of  the  Company  consist   primarily  of
investments  in  mortgage-backed  and related  securities  and other  investment
securities,  consisting  primarily of  securities  issued or  guaranteed  by the
United  States  Government  or agencies  thereof.  Typical  investments  include
federally  sponsored  agency  mortgage  pass-throughs,  and federally  sponsored
agency and mortgage  related  securities.  Investment  and aggregate  investment
limitations  and  credit  quality  parameters  of each class of  investment  are
prescribed in the Company's  investment policy. The Company performs analyses on
mortgage  related  securities  prior  to  purchase  and on an  ongoing  basis to
determine  the impact on earnings and market value of various  interest rate and
prepayment conditions.



                                       19
<PAGE>


   Mortgage-Backed Securities

         Mortgage-backed securities represent a participation interest in a pool
of single-family or multi-family mortgages,  the principal and interest payments
on  which  are  passed  from the  mortgage  originators  through  intermediaries
(generally federal government-sponsored enterprises) that pool and repackage the
participation  interest  in the  form of  securities  to  investors  such as the
Company.  Such federal  government-sponsored  enterprises,  which  guarantee the
payment of principal and interest to investors,  include  FHLMC,  FNMA and GNMA.
Mortgage-backed  securities  generally  increase  the  quality of the  Company's
assets  by  virtue  of the  guarantees  that back  them,  are more  liquid  than
individual  mortgage loans and may be used to collateralize  borrowings or other
obligations of the Company.

         FHLMC,  and  FNMA  were  established  to  provide  support  for low and
middle-income  housing.  There are  limits  to the  maximum  size of loans  that
qualify for these programs.

         Mortgage-backed  securities  typically are issued with stated principal
amounts and pools of mortgage  loans with interest rates that are within a range
and have varying maturities back the securities. The underlying pool of mortgage
loans  can  be   composed   of  either   fixed  rate   mortgage  or  ARM  loans.
Mortgage-backed  securities  commonly are referred to as mortgage  participation
certificates or pass-through  certificates.  As a result, the interest rate risk
characteristics  of the underlying pool of mortgage loans,  i.e.,  fixed rate or
adjustable  rate, as well as prepayment  risk, are passed on to the  certificate
holder. The life of a mortgage-backed pass-through security is equal to the life
of the underlying mortgage loans.

         The actual maturity of a mortgage-backed  security varies, depending on
when the mortgages repay or prepay the underlying mortgage loans. Prepayments of
the underlying  mortgage loans may shorten the life of the  investment,  thereby
adversely  affecting  its yield to maturity and the related  market value of the
mortgage-backed  security.  The yield is based upon the interest  income and the
amortization  of the  premium  or  accretion  of  the  discount  related  to the
mortgage-backed security.  Premiums and discounts on mortgage-backed  securities
are  amortized or accreted  over the estimated  term of the  securities  using a
level yield method. The prepayment assumption used to determine the amortization
period for  premiums and  discounts  can  significantly  affect the yield of the
mortgage-backed  security and these  assumptions  are reviewed  periodically  to
reflect the actual prepayment.  The actual prepayment of the underlying mortgage
loans  depends on many factors,  including  type of mortgage  loans,  the coupon
rate,  the age of the  mortgage  loans,  the  geographical  location of the real
estate  collateralizing the mortgage loans and general levels of market interest
rates.  The difference  between the interest  rates on the  underlying  mortgage
loans and the prevailing mortgage interest rates is an important  determinant in
the rate of prepayments..  During periods of decreasing mortgage interest rates,
prepayments  generally  increase.  If the coupon rate of the underlying mortgage
loans  significantly  exceeds the prevailing  market  interest rates offered for
mortgage loans,  refinancing  generally increases and accelerates the prepayment
of the underlying  mortgage  loans.  Prepayment  experience is more difficult to
estimate for adjustable rate mortgage-backed securities.

   Investment Securities

         The  Company  invests  in  various  types  of  liquid  assets  that are
permissible investments for Wisconsin-chartered  savings banks, including United
States  Treasury  obligations and securities of various  federal  agencies.  The
Company also invests its assets in commercial paper and mutual funds, the assets
of which conform to the investments that a  Wisconsin-chartered  savings bank is
otherwise  authorized to make directly.  The Company's current investment policy
only permits  purchases of investments  rated  investment  grade by a nationally
recognized  rating  agency  and does  not  permit  purchases  of  securities  of
non-investment grade quality.

   Composition of Securities Held-to-Maturity

         At March 31,  1999,  the Company  held $9.4  million in its  securities
held-to-maturity  portfolio,  consisting  of  $6.0  million  in  mortgage-backed
certificates  issued  by  various  federal  agencies  and  $3.4  million  in the
investment  securities  portfolio,  consisting of securities of various  federal
agencies.   At  March  31,  1999,  the  mortgage-backed   securities   portfolio
represented  6.2% of the Company's  total assets and the  investment  securities
portfolio represented 3.5% of the Company's total assets.


Composition of Securities Classified as Trading

         At March 31, 1999 and 1998, the Company did not have any investment
securities or mortgage-related securities classified as trading.

   Composition of Securities Available for Sale

         At March 31, 1999, the Company did not have any  investment  securities
or mortgage-related securities classified as available for sale.



                                       20
<PAGE>



         The table below sets forth certain  information  regarding the carrying
value,  composition and market value of the Company's  securities  available for
sale and  mortgage-backed  securities  held-to-maturity at March 31, 1999, 1998,
and 1997.

<TABLE>

                                                       At March 31, 1999         At March 31, 1998           At March 31, 1997
                                                       -----------------         -----------------           -----------------
                                                   Carrying  % of    Market  Carrying   % of     Market    Carrying  % of   Market
                                                    Value    Total   Value    Value     Total    Value      Value    Total  Value
                                                    -----    -----   -----    -----     -----    -----      -----    -----  -----
                                                                                (Dollars in thousands)
<CAPTION>
<S>                                             <C>          <C>      <C>      <C>      <C>       <C>    <C>       <C>     <C>

Securities available-for-sale:
U.S. govt securities and other agency obligations
    FNMA                                             $ -          -      $ -      $ -        -      $ -    $1,963    71.33%  $1,963
    FHLB                                               -          -        -        -        -        -       488    17.73%     488
    FHLMC                                              -          -        -        -        -        -       300    10.90%     300
  Money Market Mutual Fund                             -          -        -        -        -        -         1     0.04%       1
                                                  -------     ------   ------  -------  -------  -------   -------  -------  ------
    Total securities available-for-sale              $ -          -      $ -      $ -        -      $ -    $2,752   100.00%  $2,752
                                                  =======     ======   ======  =======  =======  =======   =======  =======  ======

Securities held-to-maturity
  Mortgage-backed securities
    FNMA                                          $3,189      33.80%  $3,224   $3,868    41.16%   $3,926   $4,622    62.28%  $4,523
    FHLMC                                          1,214      12.86%   1,208      377     4.01%      384      434     5.85%     420
    GNMA                                           1,634      17.32%   1,698    2,153    22.91%    2,236    2,365    31.87%   2,365
U.S. govt securities and other agency obligations
     FFCB                                              -       0.00%       -      500     5.32%      500        -        -        -
     FHLB                                          2,098      22.24%   2,083    1,700    18.09%    1,700        -        -        -
     FHLMC                                           800       8.48%     803      800     8.51%      799        -        -        -
     FNMA                                            500       5.30%     500        -        -         -
                                                  -------    -------  -------  -------  -------   -------  -------  -------  ------
      Total securities held-to-maturity           $9,435     100.00%  $9,516   $9,398   100.00%   $9,545   $7,421   100.00%  $7,308
                                                  =======    =======  =======  =======  =======   =======  =======  =======  ======

</TABLE>


         At March 31, 1999,  the aggregate  book value and the aggregate  market
value of  securities  issued by FNMA  totaled  $3.9  million  and $3.9  million,
respectively.  At March 31, 1999,  the  aggregate  book value and the  aggregate
market value of securities issued by GNMA totaled $1.6 million and $1.7 million,
respectively.  Both FNMA and GNMA securities exceed 10% of stockholder equity at
March 31, 1999.




                                       21
<PAGE>





         The  following  table shows the  maturity or period to repricing of the
Company's  mortgage-backed  securities  portfolio  held-to-maturity at March 31,
1999:

                                                    At March 31, 1999
                                         --------------------------------------
                                          Adjustable     Fixed
                                             Rate         Rate        Total
                                           Mortgage     Mortgage    Mortgage-
                                            Backed       Backed       backed
                                          Securities   Securities   Securities

Amounts due or repricing:
    Within one year                          $450          - -         $450

    After one year:
       One to three years                     - -          - -          - -
       Five to ten years                      - -         $995         $995
       Ten to 20 years                        - -         1677         1677
       Over 20 years                          - -        2,915        2,915
                                            ------      -------      -------
   Total due or repricing after one year      - -        5,587        5,587

        Total due or repricing                450        5,587        6,037
                                            ------      -------      -------
Less:
    Unearned discounts
      and premiums, net                       - -          - -          - -
                                            -------     -------      -------
Mortgage-backed  securities, net             $450       $5,587       $6,037
                                            =======     =======      =======





Sources of Funds

   General

         The Company's  primary  sources of funds for use in lending,  investing
and for other  general  purposes  are  deposits,  proceeds  from  principal  and
interest  payments  on  loans,   mortgage-backed   and  related  securities  and
investment   securities,   and  to  a  lesser  extent,   FHLB-Chicago  advances.
Contractual loan payments are a relatively stable source of funds, while deposit
inflows and outflows and loan payments are  significantly  influenced by general
market  interest  rates and  economic  conditions.  Borrowings  may be used on a
short-term  basis to  compensate  for  seasonal  or other  reductions  in normal
sources  of  funds  or for  deposit  inflows  at  less  than  projected  levels.
Borrowings also may be used on a longer-term  basis to support  expanded lending
or  investment  activities.  The Company  primarily  utilizes  advances from the
FHLB-Chicago as sources for its borrowings. At March 31, 1999, 1998 and 1997 the
Company had advances  from the  FHLB-Chicago  of $17.0 million or 17.4% of total
assets,  $19.1 million or 19.3% of total  assets,  and $17.6 million or 18.5% of
total assets,  respectively.  Of the Company's outstanding FHLB-Chicago advances
at March 31, 1999,  $4.5 million will mature before March 31, 2000.  The Company
also had borrowings  consisting of repurchase  agreements of $5.6 million,  $5.3
million and $4.5 million at March 31, 1999, 1998 and 1997, respectively.

   Deposits

         The  Company  offers a variety  of deposit  accounts  having a range of
interest rates and terms.  The Company's  deposits  principally  consist of core
deposits (NOW,  money market deposit and passbook  accounts) and certificates of
deposits.  The flow of deposits is influenced  significantly by general economic
conditions,  changes in prevailing interest rates and competition. The Company's
deposits  are  obtained  primarily  from the  areas in which  its  branches  are
located,  and the Company  relies  principally  on customer  service,  marketing
programs and  long-standing  relationships  with customers to attract and retain
these deposits. Various types of advertising and promotion to attract and retain
deposit accounts also are used. The Company does not currently solicit or accept
brokered  deposits.  Management  monitors the Company's  certificates of deposit
and, based on historical experience, management believes it will retain a large
portion of such accounts upon maturity.  Management considers Company
profitability, the matching of term lengths with assets, the attractiveness to
customers and rates offered by competitors in considering its deposit offerings
and  promotions.  The Company  believes it has been competitive in the types of
accounts and interest rates it has offered on its deposit products.
The Company intends to continue its efforts to attract and retain deposits as
a primary source of funds for supporting its lending and investing activities.



                                       22
<PAGE>



<TABLE>

The following table presents the deposit activity of the Company for the
periods indicated:

                                                                      Fiscal Year Ended March 31,
                                                                1999            1998             1997
                                                                ----            ----             ----
<CAPTION>

                                                                           (In thousands)
<S>                                                         <C>             <C>               <C>

Net Deposits (Withdrawals)                                    $(3,003)        $(1,613)          $1,627
Interest credited on deposits                                   2,728           2,334            2,674
                                                              --------        --------          -------
     Total increase (decrease) in deposits                      $(275)           $721           $4,301


</TABLE>



         At March 31,  1999,  the  Company  had $3.6  million in  certificates
of deposit  outstanding  in amounts of $100,000 or more maturing as follows:

                                                              Amount at
                                                            March 31, 1999
                                                            (In thousands)

Three months or less                                            $ 358
Over three through six months                                     894
Over six through 12 months                                      1,257
Over 12 months                                                  1,051
                                                          -----------------
     Total                                                    $ 3,560
                                                          =================

                                       23
<PAGE>




         The following  table sets forth the  distribution of the Company's core
deposits  and  certificate  accounts  at the dates  indicated  and the  weighted
average nominal interest rates on each category of deposits presented:
<TABLE>


                                                                          At March 31,
                              -----------------------------------------------------------------------------------------------------
                                            1999                              1998                               1997
                              ---------------------------------   --------------------------------   ------------------------------
                                                       Weighted                         Weighted                         Weighted
                                           Percent     Average              Percent     Average              Percent     Average
                                           of total    Nominal              of total    Nominal              of total    Nominal
                                Amount     deposits     Rate      Amount    deposits     Rate      Amount    deposits      Rate
                                ------     --------     ----      ------    --------     ----      ------    --------      ----
                                                                      (Dollars in thousands)
<CAPTION>
<S>                           <C>         <C>         <C>       <C>         <C>         <C>      <C>        <C>          <C>

Core Deposits:
    Non-interest bearing        $3,590       5.79%         -      $3,823      6.14%          -     $2,792      4.54%          -
    NOW accounts                 6,346      10.23%      2.20%      5,910      9.49%       2.15%     5,989      9.73%       2.26%
    Money market                 6,856      11.07%      4.59%      6,026      9.68%       4.87%     5,029      8.17%       4.61%
    Passbook                     6,563      10.58%      2.15%      6,091      9.78%       2.31%     5,905      9.59%       2.16%
                               --------    -------     ------     -------    -------     ------    -------    ------      ------
  Total                         23,355      37.67%      2.55%     21,850     35.08%       2.57%    19,715     32.03%       2.51%

Certificates accounts
(current term to maturity):
One to six months               17,269      27.86%      5.61%     22,514     36.15%       5.69%    15,941     25.90%       5.43%
six to 12 months                11,218      18.09%      5.48%      6,889     11.06%       5.75%     9,443     15.34%       5.71%
13 to 36 months                  8,878      14.32%      5.63%      9,435     15.15%       6.05%    14,151     22.99%       6.07%
37 to 60 months                  1,137       1.82%      5.76%      1,389      2.24%       6.08%     2,110      3.43%       6.11%
61 to 96 months                    109       0.18%      6.70%        167      0.27%       6.54%       120      0.19%       6.33%
97 to 132 months                    37       0.06%      6.35%         34      0.05%       6.35%        77         0        6.96%
                               --------     ------     ------     -------    ------      ------    -------    ------      ------
  Total certificates            38,648      62.33%      5.71%     40,428     64.92%       5.75%    41,842     67.97%       5.75%

Total deposits                 $62,003     100.00%      4.49%    $62,278    100.00%       4.62%   $61,557    100.00%       4.71%
                               =======     =======      =====    =======    =======      ======   =======    =======      ======

</TABLE>




                                       24
<PAGE>



         The following  table presents, by various rate categories, the amount
of  certificates of deposit outstanding at March 31, 1998 and March 31, 1999:

                                             At March 31,
                                            1999      1998
                                            --------------
Certificates of Deposit:                    (In thousands)
    2.00% to 2.99%                             0       100
    3.00% to 3.99%                           122         -
    4.00% to 4.99%                         7,176       538
    5.00% to 5.99%                        24,893    22,861
    6.00% to 6.99%                         5,764    16,229
    7.00% to 7.99%                           663       670
    8.00% to 8.99%                            30        30
                                         --------  --------
       Total                             $38,648   $40,428
                                         ========  ========




   Borrowings and Other Financing Transactions

         Although  deposits  are the  Company's  primary  source of  funds,  the
Company's policy has been to utilize borrowings as part of its  assets/liability
management  strategy.  Borrowings  are secured when  management  believes it can
profitably  re-invest those funds for the benefit of the Company.  The Company's
primary  form of borrowing  consists of advances  from the  FHLB-Chicago.  These
advances are collateralized by the capital stock of the FHLB-Chicago held by the
Company  and  certain of its  mortgage  loans and  mortgage-backed  and  related
securities.  Such  advances  are  made  pursuant  to  several  different  credit
programs, each of which has it's own interest rate and range of maturities.  The
maximum amount the FHLB-Chicago will advance to member  institutions,  including
the Company, for purposes other than meeting withdrawals fluctuates from time to
time in  accordance  with  policies the  FHLB-Chicago.  At March 31,  1999,  the
Company's  FHLB-Chicago  advances totaled $17.0 million,  representing  19.9% of
total liabilities.  The Company intends to continue to leverage its capital base
by utilizing FHLB borrowings to originate or purchase loans in fiscal 1999.

         The  Company's   borrowings  from  time  to  time  include   repurchase
agreements.  These  agreements  generally are entered into with local businesses
and institutions that seek to deposit funds in excess of insurable limits. These
transactions  are treated as borrowings  collateralized  by the securities sold,
which generally are  mortgage-backed  securities,  and are therefore included as
other borrowings in the Company's Consolidated Financial Statements.

         While  increases  in  borrowings  and changes in the  collateralization
levels due to market  interest  rate  changes  could  require the Company to add
collateral to secure its  borrowings,  the Company does not anticipate  having a
shortage of qualified collateral to pledge against its borrowings.  At March 31,
1999, there were $5.6 million in repurchase agreements outstanding.




                                       25
<PAGE>



         The  following  table  sets forth  certain  information  regarding  the
Company's FHLB-Chicago advances and repurchases agreements at or for the periods
ended on the dates indicated.


<TABLE>

                                                              At or For the Fiscal Years Ended March 31,
                                                              ------------------------------------------
                                                               1999               1998            1997
                                                               ----               ----            ----
<CAPTION>
                                                                        (Dollars in thousands)
<S>                                                         <C>                <C>              <C>

FHLB- Chicago advances:
  Average balance outstanding                                 $17,488            $17,912          $15,751
  Maximum amount outstanding at any
    month-end during the period                                19,062             23,173           18,245
  Balance outstanding at end of period                         16,990             19,062           17,634
  Weighted average interest rate during
    the period(1)                                                5.44%              5.88%            5.87%
  Weighted average interest rate at end
    of period                                                    5.30%              5.49%            5.91%

Repuchase agreements:
  Average balance outstanding                                  $5,597             $4,937           $4,808
  Maximum amount outstanding at any
    month-end during the period                                 6,473              6,501            5,761
  Balance outstanding at end of period                          5,625              5,258            4,463
  Weighted average interest rate during
    the period                                                   5.19%              6.00%            5.74%
  Weighted average interest rate at end
    of period                                                    5.38%              6.08%            6.13%

Total advances and repurchase agreements:
  Average balance outstanding                                 $23,085            $22,850          $20,559
  Maximum amount outstanding at any
    month-end during the period                                25,535             29,674           24,006
  Balance outstanding at end of period                         22,615             24,320           22,097
  Weighted average interest rate during
    the period                                                   5.91%              5.91%            5.78%
  Weighted average interest rate at end
    of period                                                    5.32%              5.62%            5.95%

<FN>

-------------------------------
(1) Computed on the basis of average monthly balances.
</FN>
</TABLE>

Subsidiary Activities

         The Bank has two wholly owned subsidiaries, Amery Service Agency, Inc.
("ASA"), organized as a Wisconsin corporation in 1970 and Northwest Investments
Inc. ("NWI") organized as a Nevada corporation in 1997.

         ASA engages in insurance agency activities  permissible under state and
federal law,  including  the sale of credit life and  disability  products,  and
maintenance of a third party brokerage  relationship.  The ASA and the Bank have
received approval of the Wisconsin Department of Financial  Institutions and the
FDIC to engage in the insurance and brokerage activities.

         In January 1983, ASA formed the Pondhurst  Condominium  Association and
developed 64 residential  lots for condominium  duplexes and four-plexes on land
adjacent to a golf course in Amery,  Wisconsin (the "Pondhurst Project").  As of
March 31, 1999, all 64 residential  lots had been sold. On May 8, 1998, ASA sold
an adjacent  undeveloped  7.5-acre parcel of land for $65,000.  With the sale of
the 7.5 acre parcel, the Bank and ASA has complied with a request by the Federal
Reserve  bank of  Minneapolis  that ASA divest  its  holdings  in the  Pondhurst
Project by May 31, 2000. As of March 31, 1999, ASA had total assets of $48,000.

         On May 30, 1997,  NWI was  established  as an investment  subsidiary of
Bank to manage a portion of its investments.  The establishment and operation of
a investment  subsidiary  through  incorporation  and  operation in the state of

                                       26
<PAGE>



Nevada  provides  certain  corporate tax advantages to the Bank. As of March 31,
1999, NWI had total assets of $23.9 million.

Personnel

         At March  31,  1999,  the  Company  had 32  full-time  employees  and 9
part-time  employees.  A  collective  bargaining  unit  does not  represent  the
employees  of the Company and the Company  believes  its  relationship  with its
employees to be good.

Federal Taxation

General

     The following  discussion of tax matters is intended to be a summary of the
material  tax  rules  applicable  to the  Bank  and  does  not  purport  to be a
comprehensive description of all applicable tax rules.

     The Bank and the Company  report  their income on a fiscal year basis using
the accrual  method of  accounting.  The Bank and the Company  are, as a general
matter,   subject  to  the  rules  of  federal  income  taxation  applicable  to
corporations.   Generally,   the  Internal   Revenue  Code   requires  that  all
corporations compute taxable income using the accrual method of accounting.  The
Company and its  subsidiaries  currently file a consolidated  federal income tax
return.  For its taxable  year ended March 31,  1999,  the Bank was subject to a
blended federal income tax rate of approximately 34%.

Bad Debt Reserves

     Savings  banks,  such as the Bank,  which meet certain  definitional  tests
primarily relating to their assets and the nature of their business ("qualifying
thrifts"),  were permitted for tax years beginning prior to December 31, 1995 to
establish a reserve for bad debts and to make annual  additions  thereto,  which
additions may, within specified formula limits, be deducted in arriving at their
taxable income. Such additions were computed using one of two allowable methods.
Each year, the Bank has used the method that allows the largest  addition,  and
thus, the greater deduction for tax purposes.

     The Small  Business  Job  Protection  Act of 1996 ("the Act")  repealed the
reserve method of accounting for bad debts by thrift institutions, effective for
taxable years beginning after December 31, 1995. Thrift institutions such as the
Bank  with  less  than  $500  million  in  assets  are now  required  to use the
experience  method. The Act also grants partial relief from the bad debt reserve
"recapture"  which occurs in connection with the change in method of accounting.
The pre-1988  reserves  are not required to be included in income in  connection
with the change in method of accounting. In addition, the Act suspends recapture
of  post-1987   reserves  for  a  period  of  two  years,   conditioned  on  the
institution's   compliance   with   certain   residential   loan   requirements.
Institutions  can meet this residential loan requirement if the principal amount
of  residential  loans  made  during a taxable  year was not less than the "base
amount"   for   such   year.    The   base   amount   is    determined   on   an
institution-by-institution  basis,  and constitutes the average of the principal
amounts of residential  loans made by an institution  during the six most recent
taxable years.  Notwithstanding the foregoing,  institutions will be required to
pay for recaptured  post-1987 bad debt reserves  ratably over a six-year  period
starting in 1998.  Since  provisions for deferred  income tax have been provided
for on post-1987 bad debt reserves,  there will not be any additional income tax
expense to the Bank on recapture.

     Earnings appropriated for bad debt reserves and deducted for federal income
tax purposes  cannot be used by the Bank to pay cash dividends or  distributions
to the Holding  Company without the Bank including the amount in taxable income,
together with an amount deemed necessary to pay the resulting income tax. Thus,
any dividends to the Holding Company that would reduce amounts  appropriated to
the Bank's bad debt reserves and deducted for federal income tax purposes could
create a tax liability for the Bank.  The Bank does not intend to pay dividends
that would result in a recapture of its bad debt reserves.

Corporate Alternative Minimum Tax

     For taxable years beginning  after December 31, 1986, the Internal  Revenue
Code imposes an alternative  minimum tax ("AMT") of 20% on  alternative  minimum
taxable income ("AMTI"). Only 90% of AMTI can be offset by net operating losses.
For taxable years  beginning  after  December 31, 1989,  the  adjustment to AMTI
based on book  income  will be an amount  equal to 75% of the  amount by which a
corporation's adjusted current earnings exceeds its AMTI (prior to reduction for
net operating losses).  In addition,  for taxable years beginning after December
31,  1986,  and before  January 1, 1996,  an  environmental  tax of 0.12% of the
excess of AMTI (with  certain  modifications)  over $2.0  million was imposed on



                                       27
<PAGE>


corporations,  including the Bank, whether or not AMT is paid. The Bank does not
expect to be subject to AMT in the  future,  although no  assurance  can be made
that it will not.

Distributions

     To  the  extent  that  the  Bank  makes  "non-dividend   distributions"  to
shareholders that are considered to result in distributions  from (i) the Bank's
reserve for losses on  qualifying  real  property  loans that exceeds the amount
that would have been allowed under an experience method or (ii) the supplemental
reserve for losses on loans  ("Excess  Distributions"),  then an amount equal to
such  Excess  Distributions  must be  included  in the  Bank's  taxable  income.
Non-dividend distributions include distributions in excess of the Bank's current
and accumulated  earnings and profits,  distributions in redemption of stock and
distributions  in partial or complete  liquidation.  In contrast,  distributions
made from the Bank's current or accumulated  earnings and profits, as calculated
for federal  income tax  purposes,  rather than the Bank's bad debt reserves are
generally  considered  dividends  for federal  income tax purposes and therefore
would not be included  in the Bank's  taxable  income.  Further,  under  certain
circumstances, such as tax-free reorganizations,  non-dividend distributions may
not be required to be included in the Bank's taxable income.

     The amount of additional taxable income created from an Excess Distribution
is an amount that, when reduced by the tax attributable to the income,  is equal
to the  amount  of the  distribution.  Thus,  if after the  Conversion,  certain
portions of the Bank's accumulated tax bad debt reserve are used for any purpose
other  than to absorb  qualified  bad debt  loans,  such as for the  payment  of
dividends  or other  distributions  with  respect  to the Bank's  capital  stock
(including  distributions  upon redemption or  liquidation)  and such payment or
other  distribution  is not  otherwise  excluded from the  provisions  generally
applicable to Excess  Distributions,  approximately  one and one-half  times the
amount so used  would be  includable  in gross  income  for  federal  income tax
purposes,  assuming a 34% corporate  income tax rate (exclusive of state taxes).
See "Regulation" and "Dividend Policy" for limits on the payment of dividends of
the Bank.

     Under provisions of the Revenue Reconciliation Act of 1993 ("RRA"), enacted
on August 10, 1993, the maximum federal  corporate income tax rate was increased
from 34% to 35% for taxable income over $10.0 million,  with a 3% surtax imposed
on taxable income over $15.0 million.

State Taxation

     The State of Wisconsin  imposes a tax on the  Wisconsin  taxable  income of
corporations,  including  savings banks, at the rate of 7.9%.  Wisconsin taxable
income is generally  similar to federal taxable income except that interest from
state and municipal  obligations  is taxable,  no deduction is allowed for state
income  taxes and net  operating  losses  may be carried  forward  but not back.
Wisconsin  law does not  provide  for filing of  consolidated  state  income tax
returns.  The Bank's  investment  subsidiary,  Northwest  Investments,  Inc., is
subject to taxation under Nevada state law.  Nevada does not currently  impose a
corporate income or franchise tax.

Regulation

     The following  discussion is intended to be a summary of regulatory  issues
and not a comprehensive description of all applicable regulations.

     The  Bank is a  Wisconsin-chartered  stock  savings  bank  and its  deposit
accounts are insured up to applicable  limits by the Federal  Deposit  Insurance
Corporation ("FDIC") under the Savings Association Insurance Fund ("SAIF").  The
Bank is subject to extensive regulation by the Wisconsin Department of Financial
Institutions ("WDFI"), as its chartering agency, and by the FDIC, as its deposit
insurer and principal federal regulator. The lending and investment authority of
the Bank is prescribed by Wisconsin law and  regulations,  as well as applicable
federal law and  regulations,  and the Bank is  prohibited  from engaging in any
activities not permitted by such law and  regulations.  The Company is a unitary
bank holding company  subject to regulatory  oversight by the Board of Governors
of the Federal Reserve System (the "FRB"),  the WDFI the Securities and Exchange
Commission ("SEC").


Wisconsin Savings Bank Regulation

     Regulations  adopted by the WDFI govern  various  aspects of the activities
and the operation of Wisconsin-chartered savings banks.

Examinations and Assessments

         The Bank is required to file  periodic  reports  with and is subject to
periodic examinations by the WDFI. Savings banks are required to pay examination
fees and annual  assessments to fund the supervisory  operations of the WDFI. On



                                       28
<PAGE>


June 23, 1998,  the DFI assessed the Bank a $4,176.52 fee based the Bank's total
assets of $99.4  million  at  December  31,  1997.  On March 25,  1999,  the DFI
assessed  the Bank a  $12,989.25  examination  charge and the Company a $2,484
examination charge.

Loans and Investments

     The Bank is authorized to make, invest in, sell,  purchase,  participate or
otherwise  deal in  mortgage  loans  or  interests  in  mortgage  loans  without
geographic restriction,  including loans made on the security of residential and
commercial property. Savings banks also may lend funds on a secured or unsecured
basis for business,  corporate commercial or agricultural  purposes provided the
total of all such loans do not exceed 10% of the Bank's total assets, unless the
WDFI  authorizes  a greater  amount.  Loans are subject to certain  limitations,
including percentage restrictions based on the Bank's total assets.

     Under  regulations  established  for  state  savings  banks by the  Savings
Institutions  Division of the WDFI and implemented by the  Administrator  of the
WDFI, the Bank is limited in the amount of commercial real estate and commercial
business loans it can hold in its loan portfolio. This limit is currently 20% of
the Bank's total assets and may be increased  with the approval of the WDFI.  At
March 31, 1999,  the Bank had $9.8 million of such loans in its portfolio with a
current limit based on the Bank's asset base of $97.6 million. The Bank does not
anticipate  exceeding  regulatory  limitations on such commercial lending in the
foreseeable future.

     Savings  banks  may  invest  funds in  certain  types  of debt  and  equity
securities,  including  obligations of federal,  state and local governments and
agencies.  Subject to the prior  approval of the WDFI,  compliance  with capital
requirements  and  certain  other  restrictions,  savings  banks  may  invest in
residential  housing development  projects.  Savings banks may invest in service
corporations  or  subsidiaries  with the prior approval of the WDFI,  subject to
certain  restrictions.  The lending and investment  powers of Wisconsin  savings
banks  also  are  limited  by  FDIC  regulations  and  other  federal  laws  and
regulations.

     The Bank's  subsidiary  operations  also are  regulated by the FDIC and the
FRB. See "-Federal Deposit Insurance Corporation  Improvement Act" and "-Holding
Company  Regulation." At March 31, 1999, the Bank's  subsidiary  operations were
not under any WDFI,  FRB or FDIC order to divest or terminate any activity.  The
lending and  investment  powers of Wisconsin  savings  banks also are limited by
FDIC  regulations and other federal law and  regulations.  See "Federal  Deposit
Insurance  Corporation  Improvement Act of 1991 Restrictions on  State-Chartered
Banks."

Loans to One Borrower

     Savings  banks may make loans and  extensions  of credit,  both  direct and
indirect, to one borrower in amounts up to 15% of capital plus an additional 10%
for loans fully secured by readily marketable collateral.  In addition,  savings
banks may make loans to one  borrower for any purpose in an amount not to exceed
$500,000,  or to develop domestic  residential housing units in an amount not to
exceed  the  lesser  of $30  million  or  30% of  capital,  subject  to  certain
conditions. At March 31, 1999, the Bank did not have any loans that exceeded the
loans-to-one borrower limitations.




Qualified Thrift Requirement

     The  Bank  must  qualify  for and  maintain  a level  of  qualified  thrift
investments  equal to 60% of its assets as prescribed in Section  7701(a)(19) of
the Internal  Revenue  Code of 1986,  as amended.  At March 31,  1999,  the Bank
maintained 92.1% of its assets in qualified thrift investments and therefore met
the qualified thrift lender requirement.

Dividend Limitations

     A savings bank that meets its regulatory  capital  requirement  may declare
dividends  on capital  stock based upon net profits,  provided  that its paid-in
surplus  equals its capital  stock.  If the paid-in  surplus of the savings bank
does not equal its  capital  stock,  the board of  directors  may not  declare a
dividend  unless at least 10% of the net profits of the  preceding  half year in
the case of quarterly or semi-annual dividends, or 10% of the net profits of the
preceding  year in case of annual  dividends,  has been  transferred  to paid-in
surplus.  In addition,  prior approval of the WDFI is required before  dividends
exceeding  50% of profits for any  calendar  year may be  declared  and before a
dividend may be declared out of retained earnings. Under the WDFI's regulations,
a  savings  bank  which  converted  from  mutual  to stock  form  also  would be
prohibited  from paying a dividend on its  capital  stock if the effect  thereof
would cause the  regulatory  capital of the savings bank to be reduced below the
amount required for its liquidation account.


                                       29
<PAGE>


Liquidity

     Savings  banks are required to maintain an average  daily balance of liquid
assets of not less than 8% of its  average  daily  balance  of net  withdrawable
accounts plus its  short-term  borrowings.  Also  required is a "primary  liquid
assets"  ratio  of at  least  4% of  average  daily  withdrawable  accounts  and
short-term borrowings.  Primary liquid assets is defined as primarily short-term
liquid assets and U.S.  government and U.S.  government  agency  securities.  At
March 31, 1999, the Bank's daily liquidity ratio was 22.7%.

Restrictions on Loans to and Transactions with Insiders and Affiliates

     FRB  regulations  limit  the total  amount a  savings  bank may lend to its
executive  officers,  directors,   principal  shareholders,  and  their  related
interests.  Generally,  an affiliated  person may borrow an aggregate amount not
exceeding 15% of a savings bank's unimpaired  capital and unimpaired  surplus on
an unsecured  basis and an additional  10% on a secured basis.  The  regulations
limit, with certain  exceptions,  the aggregate amount a depository  institution
may  lend to  affiliated  persons  as a class to an  amount  not  exceeding  the
institution's unimpaired capital and unimpaired surplus.

     In addition,  WDFI  regulations  place certain  restrictions  and limits on
loans and other  transactions with the Bank's affiliated  persons to ensure that
such loans and  transactions are on terms which would be available to members of
the general public for similar credit extensions.

     The Bank also must comply with Sections 23A and 23B of the Federal  Reserve
Act relative to transactions  with affiliates in the same manner and to the same
extent as if the Bank were a Federal  Reserve member bank.  Generally,  Sections
23A and 23B limit the extent to which an insured institution or its subsidiaries
may engage in certain  "covered  transactions"  with an  affiliate  to an amount
equal to 10% of such institution's  capital and surplus, plus an aggregate limit
on all such  transactions  with  affiliates  to an  amount  equal to 20% of such
capital and surplus, and require that all transactions be on terms substantially
the same, or at least as favorable to the  institution or  subsidiary,  as those
provided to a non-affiliate.  The term "covered transaction" includes the making
of loans, the purchase of assets, issuance of a guaranty and similar other types
of  transactions.  The WDFI may, for safety and soundness  reasons,  impose more
stringent  restrictions on savings banks but may not exempt transactions from or
otherwise abridge Sections 23A and 23B.

     Unless  prior  approval  of the WDFI is  obtained,  a savings  bank may not
purchase,  lease or acquire a site for an office building or an interest in real
estate from an affiliated  person,  including a stockholder owning more than 10%
of its capital stock, or from any firm,  corporation,  entity or family in which
an affiliated person or 10% stockholder has a direct or indirect interest.

     The Bank has not been significantly affected by the applicable restrictions
on loans to and transactions with affiliates.


Insurance of Deposits

     The Bank's  deposits  are insured to  applicable  limits  under the Savings
Association  Insurance  Fund  ("SAIF")  of the  FDIC.  FDIC  regulations  assign
institutions   to  a  particular   capital  group  based  on  the  level  of  an
institution's  capital  -- "well  capitalized,"  "adequately  capitalized,"  and
"undercapitalized."  These  groups are each then divided into three subgroups
which reflect varying levels of supervisory concern, from those which are
considered to be healthy to those which are considered to be of substantial
supervisory  concern.  The matrix so created  results  in nine assessment risk
classifications,  with reduced insurance rates paid  by  well capitalized,
financially sound institutions and higher rates paid by undercapitalized
institutions  that pose a substantial  risk of loss to the insurance fund
unless effective corrective action is taken.

     The Bank is currently  assessed deposit  insurance  premiums at the rate of
$0.065 per one hundred  dollars of deposits.  The Bank's expense related to FDIC
premiums  was  $38,000  and $39,000 for the fiscal year ended March 31, 1999 and
1998.  Deposit  premium  levels are set in order to permit the SAIF to achieve a
ratio of  reserves  to  insured  deposits  of  1.25%,  and the  FDIC may  adjust
assessment  rates in order to maintain  the target  ratio.  While an increase in
premiums for the Bank could have an adverse  effect on  earnings,  a decrease in
premiums could have a positive impact on earnings.  The Bank does not anticipate
any increase in the insurance premium in the foreseeable future.

     The FDIC insures commercial bank deposits through a separate fund, the Bank
Insurance Fund ("BIF").  During 1995, BIF assessment rates were reduced and as a
result,  BIF member  institutions were paying lower deposit  insurance  premiums
than  SAIF-member  institutions.  Legislation  passed during 1996  addressed the
BIF/SAIF  premium  disparity  and other  matters  related to  deposit  insurance
obligations. See " -Regulatory Legislation Affecting Deposit Insurance."

                                       30
<PAGE>

     Under the FDIC Act,  insurance  of deposits may be  terminated  by the FDIC
upon a finding that the institution has engaged in unsafe or unsound  practices,
is in an unsafe or unsound condition to continue operations, or has violated any
applicable  law,  regulation,  rule,  order or  condition  imposed  by the FDIC.
Management of the Company does not know of any practice,  condition or violation
that might lead to the termination of deposit insurance for the Bank.

Certain Federal Regulations

     Provisions  of federal law address  risk  reduction  and the  promotion  of
standards of safety and soundness for insured depository institutions.

Examinations and Audits

     Federal regulations require annual on-site  examinations for all depository
institutions except those well-capitalized institutions with assets of less than
$100 million;  annual audits by independent  public  accountants for all insured
institutions with assets in excess of $500 million; the formation of independent
audit committees of the boards of directors of insured  depository  institutions
for  institutions  with  assets  equal  to or in  excess  of $500  million;  and
management of  depository  institutions  to prepare  certain  financial  reports
annually and to establish internal compliance procedures.

Prompt Corrective Regulatory Action

     Federal bank  regulators are required to take certain  supervisory  actions
with respect to  undercapitalized  institutions,  the severity of which  depends
upon the institution's degree of capitalization. The regulations provide that an
insured  institution  that has a ratio of total capital to risk-based  assets of
less  than  8.0%,  core  capital  to  risk-based  assets  of less than 4.0% or a
leverage ratio that is less than 4.0%,  would be considered  "undercapitalized."
An insured institution that has a ratio of total capital to risk-based assets of
less  than  6.0%,  core  capital  to  risk-based  assets  of less than 3.0% or a
leverage  ratio  that is less  than  3.0%,  would be  considered  "significantly
undercapitalized" and an insured institution that has tangible capital to assets
ratio equal to or less than 2.0% would be deemed "critically undercapitalized."

     Subject  to  limited  exceptions,   insured  institutions  in  any  of  the
undercapitalized  categories are prohibited from declaring dividends, making any
other capital distribution or paying a management fee to a controlling person or
entity.  Undercapitalized and significantly  undercapitalized  institutions face
more severe restrictions.  The Bank currently exceeds all applicable regulatory
capital requirements and, therefore, is not subject to prompt  correctional
action.

Brokered Deposits

     FDIC  regulations  govern the  acceptance  of brokered  deposits by insured
depository  institutions.  The  capital  position of an  institution  determines
whether and pursuant to what  limitations  an  institution  may accept  brokered
deposits.  A  "well-capitalized"  institution  (one that  significantly  exceeds
specified  capital ratios) may accept  brokered  deposits  without  restriction.
"Undercapitalized"  institutions  (those  that fail to meet  minimum  regulatory
capital   requirements)   may  not  accept  brokered  deposits  and  "adequately
capitalized"   institutions   (those   that   are  not   "well-capitalized"   or
"undercapitalized")  may only accept such deposits with the consent of the FDIC.
The   definitions   of   "well-capitalized",    "adequately   capitalized"   and
"undercapitalized"  governing the acceptance of brokered deposits conform to the
definitions used in the regulations  implementing the prompt  corrective  action
provisions  of the  FDICIA.  The Bank is a  "well-capitalized"  institution  and
therefore may accept brokered deposits without  restriction.  At March 31, 1999,
the Bank had no brokered deposits.

Uniform Lending Standards

     Savings   institutions  must  adopt  and  maintain  written  policies  that
establish  appropriate  limits and standards  for  extensions of credit that are
secured  by liens or  interests  in real  estate or are made for the  purpose of
financing permanent  improvements to real estate.  These policies must establish
loan  portfolio  diversification   standards,   prudent  underwriting  standards
(including   loan-to-value   limits)  that  are  clear  and   measurable,   loan
administration   procedures   and   documentation,    approval   and   reporting
requirements. The real estate lending policies must reflect consideration of the
Interagency  Guidelines for Real Estate Lending  Policies that have been adopted
by federal bank regulators. The Bank has adopted and maintains such policies.

Standards for Safety and Soundness

     On July 10, 1995,  federal bank regulators adopted  Interagency  Guidelines
Establishing  Standards for Safety and  Soundness  (the  "Guidelines")  and also
adopted a final rule establishing  deadlines for submission and review of safety
and soundness  compliance plans and operational and managerial standards for all
insured  depository  institutions  relating  to internal  controls,  information
systems and audit systems;  loan documentation;  credit  underwriting;  interest
rate risk


                                       31
<PAGE>


exposure;  asset growth;  and  compensation  fees and  benefits.  The
compensation  standards prohibit employment  contracts,  compensation or benefit
arrangements,  stock  option  plans,  fee  arrangements  or  other  compensatory
arrangements  that would  provide  excessive  compensation,  fees or benefits or
could lead to material  financial loss.  Federal bank regulators are authorized,
but not required, to request a compliance plan for failure to satisfy the safety
and soundness standards set out in the Guidelines.

     The  Bank  believes  that  its   operational   and   managerial   standards
substantially  comply with the  standards set forth in the  Guidelines  and that
compliance with the Guidelines will therefore not impose a significant burden on
Bank operations.

Restrictions upon State-Chartered Banks

     FDIC regulations  governing Bank equity investments prohibit certain equity
investments  and generally  limit equity  investments to those  permissible  for
federally-chartered   banks  and  their   subsidiaries.   Institutions   holding
impermissible  equity  investments that do not receive FDIC approval must submit
to the FDIC a plan for divesting such  investments.  At March 31, 1999, the Bank
did not hold any impermissible equity investments.

     Under FDIC  regulations,  the Bank must  obtain the FDIC's  prior  approval
before directly, or indirectly through a majority-owned subsidiary, engaging "as
principal"  in any activity that is not  permissible  for a national bank unless
certain  exceptions  apply.  The activity  regulations  provide that state banks
which meet applicable minimum capital  requirements would be permitted to engage
certain  activities  that are not  permissible  for  national  banks,  including
guaranteeing  obligations  of others,  activities  which the FRB has found to be
closely related to banking and certain securities  activities  conducted through
subsidiaries.  The FDIC will not approve an activity that it determines presents
a  significant   risk  to  the  FDIC  insurance   funds.   As  a   SAIF-insured,
state-chartered  savings  bank  which was  formerly  a  state-chartered  savings
association,  the Bank continues to be subject to certain restrictions which are
imposed by federal law on state-chartered savings associations. The activities
of the Bank and its subsidiaries are of a type permissible under applicable
federal regulations.

Capital Maintenance

FDIC Regulation

     FDIC-insured  institutions  are required to follow certain capital adequacy
guidelines   which  prescribe   minimum  levels  of  capital  and  require  that
institutions meet certain risk-based capital requirements.  The Bank is required
to meet the following capital standards to remain adequately capitalized and not
be subject to corrective action: (i) "Tier 1 capital" in an amount not less than
3% of total  assets;  (ii)  "Tier 1  capital"  in an amount  not less than 4% of
risk-weighted assets; and (iii) "total capital" in an amount not less than 8% of
risk-weighted assets.

     FDIC-insured   institutions  in  the  strongest  financial  and  managerial
condition  (with  a  composite  rating  of  "1"  under  the  Uniform   Financial
Institutions  Rating System  established by the Federal  Financial  Institutions
Examination  Council) are also required to maintain "Tier 1 capital" equal to at
least 3% of total assets (the "leverage capital" requirement). Tier 1 capital is
defined  to  include  the  sum of  common  shareholders'  equity,  noncumulative
perpetual  preferred  stock  (including  any  related  surplus),   and  minority
interests  in  consolidated  subsidiaries,  minus all  intangible  assets  (with
certain exceptions), identified losses, and qualifying investments in securities
subsidiaries.  An  institution  that fails to meet the  minimum  leverage  limit
requirement  must file a capital  restoration  plan  with the  appropriate  FDIC
regional  director.  At March 31,  1999,  the Bank's  ratio of Tier 1 capital to
total  assets was  10.14%,  or 7.14  percentage  points in excess of the minimum
leverage capital requirement,  the Bank's Tier 1 capital to risk-weighted assets
was 16.09%, or 12.09 percentage  points in excess of the FDIC  requirement,  and
the Bank's total capital to risk-weighted  assets was 16.71%, or 8.71 percentage
points in excess of the FDIC requirement.

Wisconsin Regulation

         Wisconsin-chartered  savings  banks are  required to maintain a minimum
capital to assets  ratio of 6% and must  maintain  total  capital  necessary  to
ensure the  continuation  of insurance of deposit  accounts by the FDIC.  If the
WDFI determines  that the financial  condition,  history,  management or earning
prospects  of a savings  bank are not  adequate,  the WDFI may  require a higher
minimum  capital level for the savings bank. If a savings  bank's  capital ratio
falls below the required  level,  the WDFI may direct the savings bank to adhere
to a specific written plan established by the WDFI to correct the savings bank's
capital  deficiency,  as well as a number of other  restrictions  on the savings
bank's operations,  including a prohibition on the declaration of dividends.  At
March 31, 1999, the Bank's total capital, as calculated under Wisconsin law, was
$9.8million  or 9.4% of total  assets,  which was 3.4% in excess of the required
amount.

                                       32
<PAGE>

Community Reinvestment Act

         Under the Community  Reinvestment  Act of 1977, as amended (the "CRA"),
as implemented by FDIC  regulations,  the Bank has a continuing and  affirmative
obligation  consistent with its safe and sound operation to help meet the credit
needs of its entire community,  including low and moderate income neighborhoods.
The CRA does  not  establish  specific  lending  requirements  or  programs  for
financial institutions nor does it limit an institution's  discretion to develop
the types of products and services it believes are best suited to its particular
community.  The CRA requires the FDIC, in connection  with its  examination of a
bank,  to assess the  institution's  record of meeting  the credit  needs of its
community  and to take such record  into  account in its  evaluation  of certain
applications  by such  institution.  The law requires  public  disclosure  of an
institution's  CRA rating and also  requires the primary  regulator to provide a
written  evaluation of an institution's  CRA  performance.  . The Bank had a CRA
examination on February 12, 1998, and received a "Outstanding" CRA rating.

Federal Reserve System

     The FRB's  Regulation  D imposes  reserve  requirements  on all  depository
institutions which maintain  transaction accounts or non-personal time deposits.
Checking accounts,  NOW accounts and certain other types of accounts that permit
payments or transfers to third parties fall within the definition of transaction
accounts  and are  subject  to  Regulation  D reserve  requirements,  as are any
non-personal time deposits  (including certain money market deposit accounts) at
a savings institution.  For 1997, a depository institution must maintain average
daily reserves  equal to 3% on the first $49.3 million of  transaction  accounts
and an  initial  reserve  of $1.5  million,  plus 10% of that  portion  of
total transaction accounts in excess of $49.3 million. The first $4.4  million
of otherwise reservable balances (subject to adjustment by the FRB) are exempt
from the reserve requirements. These percentages and threshold limits are
subject to adjustment  by the FRB.  As of March 31, 1999, the Bank met its
Regulation  D reserve requirements.

     Thrift  institutions also have authority to borrow from the Federal Reserve
Bank "discount window," but FRB policy generally requires thrift institutions to
exhaust all FHLB sources before  borrowing from the Federal Reserve System.  The
Bank had no discount window borrowings as of March 31, 1999.

Federal Home Loan Bank System

     The Federal Home Loan Bank System, consisting of twelve FHLBs, is under the
jurisdiction  of the Federal  Housing  Finance Board  ("FHFB").  The  designated
duties of the FHFB are to supervise  the FHLBs;  ensure that the FHLBs carry out
their  housing  finance  mission;   ensure  that  the  FHLBs  remain  adequately
capitalized and able to raise funds in the capital markets;  and ensure that the
FHLBs operate in a safe and sound manner.

     The Bank, as a member of the FHLB-Chicago,  is required to acquire and hold
shares of capital stock in the FHLB-Chicago in an amount equal to the greater of
(i) 1% of the aggregate  outstanding  principal  amount of residential  mortgage
loans, home purchase contracts and similar  obligations at the beginning of each
year,  or (ii)  0.3% of  total  assets.  The  Bank is in  compliance  with  this
requirement  with an investment in  FHLB-Chicago  stock of $850,000at  March 31,
1999.

     Among other benefits, the FHLBs provide a central credit facility primarily
for member  institutions.  It is funded primarily from proceeds derived from the
sale of  consolidated  obligations  of the FHLB  System.  It makes  advances  to
members in accordance  with policies and procedures  established by the FHFB and
the Board of Directors  of the  FHLB-Chicago.  At March 31,  1999,  the Bank had
$17.0 million in advances from the FHLB-Chicago.

Holding Company Regulation

Federal Regulation

     The  Company is a  registered  bank  holding  company  pursuant to the Bank
Holding  Company Act of 1956, as amended (the "BHCA").  As such,  the Company is
subject to  examination,  regulation and periodic  reporting  under the BHCA, as
administered  by the FRB. The FRB has adopted  capital  adequacy  guidelines for
bank holding companies (on a consolidated basis) substantially  similar to those
of the FDIC for the Bank. Failure to meet the capital adequacy  requirements may
result in supervisory or enforcement  action by the FRB. The Company's pro forma
total  and  Tier  1  capital   significantly   exceed  such   capital   adequacy
requirements.

     The Company is required to obtain the prior  approval of the FRB to acquire
all, or  substantially  all, of the assets of any bank or bank holding  company.
Prior FRB  approval  is required  for the Company to acquire  direct or indirect
ownership  or  control  of any  voting  securities  of any bank or bank  holding
company if,  after  giving  effect to such  acquisition,  it would,  directly or
indirectly,  own or control  more than 5% of any class of voting  shares of such
bank or bank holding  company.  The

                                       33
<PAGE>


BHCA also  prohibits the  acquisition by the Company of more than 5% of the
voting shares, or substantially all the assets of a bank located  outside the
State of  Wisconsin  unless such an  acquisition  is specifically authorized by
the laws of the state in which such bank is located.

     FRB regulations govern a variety of bank holding company matters, including
redemption of outstanding  equity securities and a bank holding company engaging
in non-banking activities. Pursuant to FRB policy, dividends should be paid only
out of current earnings and only if the prospective  rate of earnings  retention
by the bank holding  company appears  consistent  with its capital needs,  asset
quality and overall  financial  condition.  The FRB policy also  requires that a
bank holding  company serve as a source of financial  strength to its subsidiary
banks by standing ready to use available  resources to provide  adequate capital
funds to those banks during  periods of  financial  stress or  adversity.  These
policies could affect the ability of the Holding Company to pay cash dividends.

     Subsidiary  banks  of  a  bank  holding  company  are  subject  to  certain
quantitative and qualitative  restrictions imposed by the Federal Reserve Act on
any  extension of credit to, or purchase of assets from,  or letter of credit on
behalf of, the bank holding company or its  subsidiaries,  and on the investment
in or  acceptance  of  stocks  or  securities  of such  holding  company  or its
subsidiaries  as collateral  for loans.  In addition,  provisions of the Federal
Reserve Act and FRB  regulations  limit the amounts of, and  establish  required
procedures and credit  standards with respect to, loans and other  extensions of
credit to officers, directors and principal shareholders of the Bank, the
Company, any subsidiary of the Company and related interests of such persons.
See " -Restrictions on Loans to and  Transactions with  Affiliates."  Moreover,
subsidiaries  of bank holding  companies are prohibited from engaging in
certain tie-in  arrangements (with the Company or any of its subsidiaries) in
connection with any  extension  of  credit,  lease or sale of  property  or
furnishing  of services.

     The Company and its subsidiary,  the Bank, are affected by the monetary and
fiscal policies of various agencies of the United States  Government,  including
the Federal  Reserve  System.  In view of changing  conditions  in the  national
economy and in the money markets, it is impossible for management of the Company
to accurately  predict future  changes in monetary  policy or the effect of such
changes on the business or financial condition of the Company.

State Savings Bank Holding Company Regulation

     In addition to the FRB bank  holding  company  regulations,  a bank holding
company  that owns or  controls,  directly or  indirectly,  more than 25% of the
voting  securities  of a state  savings bank also is subject to  regulation as a
savings bank holding  company by the WDFI. The WDFI has not yet issued  proposed
regulations governing savings bank holding companies.

Acquisition of the Company

     Under the Change in Bank Control Act of 1978,  as amended (the  "CBCA"),  a
notice must be  submitted  to the FRB if any person  (including  a company),  or
group acting in concert, seeks to acquire 10% or more of the Company's shares of
common stock outstanding, unless the FRB has found that the acquisition will not
result in a change in control  of the  Company.  Under the CBCA,  the FRB has 60
days within  which to act on such  notices,  taking into  consideration  certain
factors,  including the financial and managerial resources of the acquirer,  the
convenience and needs of the communities served by the Company and the Bank, and
the anti-trust effects of the acquisition.

     Under the Bank Holding Capital Act ("BHCA"),  any company would be required
to obtain  prior  approval  from the FRB before it may obtain  "control"  of the
Company  within the meaning of the BHCA.  Control is  generally  defined to mean
ownership or power to vote 25 percent or more of any class of voting  securities
of the  Company or the  ability to  control  in any  manner  the  election  of a
majority  of the  Company's  directors.  In  addition,  the BHCA  prohibits  the
acquisition of the Company by a bank holding  company  located outside the State
of Wisconsin,  unless such  acquisition is specifically  authorized by Wisconsin
law. See "Holding Company Regulation."

Federal Securities Laws

     The Company filed with the  Commission a registration  statement  under the
Securities Act of 1933, as amended (the "Securities  Act"), for the registration
of the Common Stock issued  pursuant to the  Conversion.  Upon completion of the
Conversion,  the Company's Common Stock was registered with the Commission under
the  Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act").  The
Company is subject  to the  information,  proxy  solicitation,  insider  trading
restrictions and other requirements under the Exchange Act.

                                       34
<PAGE>

     The registration under the Securities Act of the shares of the Common Stock
does not cover the resale of such shares.  Shares of Common  Stock  purchased by
persons  who  are  not   affiliates  of  the  Company  may  be  resold   without
registration.  Shares  purchased by an affiliate of the Holding  Company will be
subject to the resale  restrictions of Rule 144 under the Securities Act. If the
Company meets the current public information  requirements of Rule 144 under the
Securities  Act,  each  affiliate  of the  Company who  complies  with the other
conditions of Rule 144 (including  those that require the affiliate's sale to be
aggregated  with those of certain  other  persons)  would be able to sell in the
public market,  without  registration,  a number of shares not to exceed, in any
three-month  period,  the  greater  of (i) 1% of the  outstanding  shares of the
Company or (ii) the average  weekly  volume of trading in such shares during the
preceding four calendar weeks.

Regulatory Legislation Affecting Deposit Insurance

     Deposits of the Bank currently are insured to applicable limits by the FDIC
under the Savings  Associations  Insurance Fund ("SAIF").  The FDIC also insures
commercial  bank deposits under the Bank Insurance Fund ("BIF").
Premium levels are set in order to permit the funds to be capitalized at a level
equal to 1.25% of total fund deposits.  Assessment rate changes made in 1995
created a deposit insurance premium disparity between the two funds; while most
BIF members were paying only a nominal $2,000 annual premium, SAIF members were
paying average rates of 23.4 basis points of deposits.

         The FDIC has established a permanent base  assessment  schedule for the
SAIF  and set  assessment  rates at a range  of 4 to 31  basis  points.  Current
regulations  provide for an adjusted assessment schedule reducing these rates by
4 basis  points to reflect  current  conditions,  producing  an  effective  SAIF
assessment  range  of 0 to 27 basis  points  beginning  October  1,  1996.  This
assessment range,  which applies to all SAIF institutions other than SAIF member
savings   associations,   is  comparable  to  the  current   schedule  for  BIF-
institutions. A special interim rate schedule ranging from 16 to 27 basis points
applied  to  SAIF-member  savings  associations  for the last  quarter  of 1996,
reflecting the fact that assessments  related to certain bond obligations of the
Financial  Corporation  ("FICO"),  which were  issued to resolve the savings and
loan  crisis  in the  1980's,  will be  included  in the SAIF  rates  for  these
institutions  during that  period.  Because the Bank is a "Sasser  bank" (a bank
that  converted its charter from a savings  association  to a state savings bank
charter,  yet remains a SAIF member in  accordance  with the  so-called  "Sasser
Amendment"),  it was not  assessed  this  interim  rate and received a credit in
January  1997 for its entire FDIC  premium for the quarter  ended  December  31,
1996.

     Certain bond obligations of the Financial Corporation ("FICO"),  which were
issued to resolve the savings and loan crisis in the 1980's, are being shared by
all insured  depository  institutions  beginning  after December 31, 1996.  This
obligation  had  previously  been  the  sole   responsibility   of  SAIF-insured
institutions   and  had  been  funded  through  SAIF   assessments.   BIF-member
institutions  will pay one-fifth  the rate to be paid by SAIF  members,  for the
first three  years.  The annual FICO  assessment  is 1.3 and 6.5 basis points of
deposits for BIF and SAIF members, respectively.  After January 1, 2000, BIF and
SAIF members will share the FICO payments on a pro-rata basis, which is assessed
at 2.4 basis points, until the bonds mature in 2017.




                                       35
<PAGE>



ITEM 2.  DESCRIPTION OF PROPERTY.

Properties

         The Company  conducts its business  through three  full-service  office
locations that are located in Polk, St. Croix and Burnett  Counties,  Wisconsin.
The  Company  owns all of the  properties  on which  its  offices  are  located.
Management  believes the Company's  current  facilities are adequate to meet its
present and immediately foreseeable needs. A list of the Company's offices is as
follows:

                                                             Net Book Value
                                                             of Properties and
                                     Year                   Improvements at
Office Location                     Opened                   March 31, 1999
---------------                     ------                   ---------------
Amery/Home Office                    1936                      $1,180,000
234 S Keller Avenue
PO Box 46
Amery, WI  54001

New Richmond Office                  1972                         869,000
532 S. Knowles Avenue
New Richmond, WI  54017

Siren Office                         1975                         127,000
                                                              --------------
24082 Highway 35 N
Siren, WI  54872
                                   Net Book Value              $2,176,000
                                                              ==============


                                       36
<PAGE>



ITEM 3.  LEGAL PROCEEDINGS

         The Company is not involved in any pending legal proceedings other than
routine legal proceedings occurring in the ordinary course of business, which in
the aggregate  involve amounts that are believed by management to be material to
the financial condition of the Company.

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

         No matters  were  submitted  to a vote of  shareholders  of the Company
 during the three months ended March 31, 1999.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Information  required by this item is included under the heading "Notes
to Financial Statements of Northwest Equity Corp." and "Shareholder Information"
in the  Registrant's  Annual  Report to  Shareholders  for the fiscal year ended
March 31, 1999, which has been filed separately pursuant to Rule 14a-3 under the
Securities  Exchange  Act of 1934 as  amended  and in  accordance  with  General
Instruction  E(2) to Form 10-KSB, and which sections are hereby incorporated
herein by reference.

         The Board of Directors of the  Registrant  declared a dividend of $0.17
per  share to  shareholders  of record on April 30,  1999.  Future  payments  of
dividends will be subject to  determination  and declaration by the Registrant's
Board of  Directors,  which will take into  account the  Registrant's  financial
condition,  results  of  operations,  tax  considerations,  industry  standards,
economic  conditions  and other factors,  including the regulatory  restrictions
which affect the payment of  dividends by the Bank to the Company.  There can be
no assurance  that dividends will be paid on the shares of Common Stock or that,
if paid, such dividends will not be reduced or eliminated in future periods.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         Information  required  by  this  item is  included  under  the  heading
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations  of Northwest  Equity  Corp." in the  Registrant's  Annual  Report to
Shareholders for the fiscal year ended March 31, 1999, which has been filed with
the Securities and Exchange  Commission  separately pursuant to Rule 14a-3 under
the  Securities  Exchange Act of 1934 as amended and in accordance  with General
Instruction E(2) to Form 10-KSB, and which section is hereby incorporated
herein by reference.

ITEM 7.  FINANCIAL STATEMENTS.

         Information   required  by  this  item  is  included   under   headings
"Consolidated  Financial  Statements  of Northwest  Equity  Corp." and "Notes to
Consolidated Financial Statements of Northwest Equity Corp." in the Registrant's
Annual Report to  Shareholders  for the fiscal year ended March 31, 1999,  which
has been filed with Securities and Exchange  Commission  separately  pursuant to
Rule  14a-3  under  the  Securities  Exchange  Act of 1934,  as  amended  and in
accordance with General  Instruction E(2) to Form 10-KSB, and which sections
are hereby incorporated herein by reference.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

                  None.



                                       37
<PAGE>



                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS: COMPLIANCE WITH
         SECTION 16(A) OF THE EXCHANGE ACT.

         Information required by this item with respect to directors is included
under  the  heading  "Matter  1.  Election  of  Directors"  in the  Registrant's
definitive  Proxy  Statement  dated July 21,  1999,  relating to the 1999 Annual
Meeting of the  Shareholders scheduled for August 17, 1999, which has been filed
separately  with the Securities and Exchange  Commission  pursuant to Rule 14a-6
under the  Securities  Exchange Act of 1934, as amended and in  accordance  with
General Instruction E(3) to Form 10-KSB, not later than 120 days after the
end of the Registrant's fiscal year, and which section is hereby incorporated
herein by reference.

         The following information as to the business experience during the past
five years is supplied with respect to executive  officers of the Registrant who
do not serve on the Registrant's  Board of Directors.  There are no arrangements
or  understandings  between the persons  named and any other person  pursuant to
which such officers were selected,  nor are there any family relationships among
them.

         James L. Moore has been Senior Vice President of the Bank since 1990.
Mr. Moore joined the Bank in 1975 as an  assistant branch manager and was
promoted to Vice President in 1988.

         Information  required by this item with respect to Item 405, Compliance
with Section 16(a) of the Securities Exchange Act of 1934 as amended is included
under the heading "Section 16 Compliance" in the  Registrant's  definitive Proxy
Statement   dated  July 21, 1999  relating  to  the  1999  Annual  Meeting  of
Shareholders scheduled for August 17, 1999, which has been filed separately with
the  Securities  and  Exchange  Commission  pursuant  to Rule  14a-6  under  the
Securities  Exchange  Act of 1934,  as amended and in  accordance  with  General
Instruction E(3) to Form 10-KSB, not later than 120 days after the end of the
Registrant's  fiscal year,  and which section is hereby  incorporated  herein by
reference.


ITEM 10. EXECUTIVE COMPENSATION.

         Information  required  by  this  item is  included  under  the  heading
"Compensation   of  Executive   Officers  and  Directors"  in  the  Registrant's
definitive  Proxy  Statement  dated July 21,  1999,  relating to the 1999 Annual
Meeting of  Shareholders  scheduled for August 17, 1999. The Proxy Statement has
been filed  separately with the Securities and Exchange  Commission  pursuant to
Rule 14a-6 under  Securities  Exchange Act of 1934, as amended and in accordance
with General Instruction E (3) to Form 10-KSB. It was filed not later than
120 days after the end of the  Registrant's fiscal year, and that section is
hereby incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         Information  required  by  this  item is  included  under  the  heading
"Security Ownership of Certain Beneficial Owners" in the Registrant's definitive
Proxy  Statement  dated July 21,  1999,  relating to the 1999 Annual  Meeting of
Shareholders Scheduled for August 17, 1999, which has been filed separately with
the  Securities  and  Exchange  Commission  pursuant  to Rule  14a-6  under  the
Securities  Exchange  Act of 1934,  as amended and in  accordance  with  General
Instruction  E(3) to Form 10-KSB, not later than 120 days after the end of
the Registrant's fiscal year, and which section is hereby incorporated herein by
reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Information  required  by  this  item is  included  under  the  heading
"Indebtedness  of  Management  and  Certain  Transactions"  in the  Registrant's
definitive  Proxy  Statement  dated July 21,  1999,  relating to the 1999 Annual
Meeting  of Shareholders scheduled  for August 17,  1999,  which has been  filed
separately  with the Securities and Exchange  Commission  pursuant to Rule 14a-6
under the  Securities  Exchange Act of 1934, as amended and in  accordance  with
General Instruction E(3) to Form 10-KSB, not later than 120 days after the
end of the Registrant's fiscal year, and which section is hereby incorporated
herein by reference.

                                       38
<PAGE>

                                            PART IV

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>

(a)  Exhibits Required by Item 601:                                              Page Number
<CAPTION>
<S>                                                                             <C>
     2.1  Plan of Conversion of Northwest Savings Bank (as amended)(1)
     3.1  Articles of Incorporation of Registrant (1)
     3.2  By-Laws of Registrant (1)
     3.3  Stock Articles of Incorporation of Northwest Savings Bank (1)
     3.4  By-Laws of Northwest Savings Bank (1)
     4.1  Specimen Stock Certificate of Registrant (1)
     4.2  Specimen Stock Certificate of Northwest Savings Bank (1)
    10.1  Northwest Savings Bank Money Purchase Pension Plan (1)
    10.2  Northwest Savings Bank Employee Stock Ownership Plan (1)
    10.3  Credit Agreement by and between Northwest Savings Bank
          Employee Stock Ownership Trust and Registrant (1)
    10.4  Northwest Savings Bank Incentive Plan (as amended)(1)
    10.5  1994 Northwest Equity Corp. Stock Option Plan (1)
    10.6  Northwest Equity Corp. Incentive Plan (2)
    10.7  Northwest Equity Corp. 1995 Stock Option Plan (2)
    10.8  Employment Agreement - Mr. Brian L. Beadle (1)
    10.9  Employment Agreement - Mr. James L. Moore  (1)
    11.1  Statement Regarding Computation of Per Share Earnings                 42
    13.1  1999 Annual Report to Shareholders                                    43
    21.1  Subsidiaries of Registrant                                            44
    23.1  Consent of Wipfli Ullrich Bertelson LLP                               45
    99.1  Proxy Statement for 1999 Annual Meeting of Shareholders               46
  ----------------------------
<FN>

(1) Incorporated by reference to exhibits filed with  Registrant's Form
SB-2 Registrant  Statement declared effective on August 5,1994 (Registration
Number 33-73264).

(2) Incoporated by reference to exhibits filed with  Registrant's  Form
S-8 Registration Statement declared effective on January 23, 1996 (Registration
Number 333-878).

(b) Reports on Form 8-K
</FN>
</TABLE>

                   A report on Form 8-K dated  February 16,  1999,  was filed by
the  Registrant  during the three  months  ended March 31,  1999.  Item 5. Other
Events  notified the SEC that the Registrant  signed a Definitive  Agreement and
Plan of Reorganization that provides for the acquisition of the Registrant,  and
its wholly owned banking subsidiary, by Bremer Financial Corporation. Item 7.
Financial  Statements  and  Exhibits  provided a copy of the  February 17, 1999,
press release.

                  A report on Form 8-K dated February 16, 1999, was filed by the
Registrant  during the three months  ended March 31, 1999.  Item 5. Other Events
notified the SEC that the Registrant  signed a Definitive  Agreement and Plan of
Reorganization  that provides for the  acquisition  of the  Registrant,  and its
wholly  owned  banking  subsidiary,  by Bremer  Financial  Corporation.  Item 7.
Financial  Statements and Exhibits  provided a copy of the Agreement and Plan of
Merger dated February 16, 1999.



                                       39
<PAGE>




                                            SIGNATURES

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

                               NORTHWEST EQUITY CORP.

Dated:  June 8, 1999           By___/s/Brian L. Beadle___
                               Brian L. Beadle, President (Principal Executive
                               Officer and Principal Financial and Accounting
                               Officer)

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


     Signature                         Title                          Date


 __/s/Brian L. Beadle___    President(Principal Executive Officer  June 8, 1999
      Brian L. Beadle       and Principal Financial Accounting
                            Officer) and Director


__/s/Gerald J. Ahlin___               Director                     June 8, 1999
     Gerald J. Ahlin


 __/s/Vern E. Albrecht__              Director                     June 8, 1999
      Vern E. Albrecht


 __/s/Michael D. Jensen__             Director                     June 8, 1999
      Michael D. Jensen


__/s/Donald M. Michels__              Director                     June 8, 1999
     Donald M. Michels


__/s/Norman M. Osero__                Director                     June 8, 1999
     Norman M. Osero




                                       40
<PAGE>



                                INDEX TO EXHIBITS

                                                              Sequentially
                                                              Numbered Page
Exhibit                                                       Where Attached
Number                                                     Exhibits are located

11.l     Statement Regarding Computation of Per Share Earnings      42

13.1     1999 Annual Report to Shareholders                         43

21.1     Subsidiaries of the Registrant                             44

23.1     Consent of Wipfli Ullrich Bertelson LLP                    45

99.1     Proxy Statement for 1999 Annual Meeting of Shareholder     46



                                       41
<PAGE>


EXHIBIT 11.1 STATEMENT REGARGDING COMPUTATION OF PER SHARE EARNINGS


Earnings per share is calculated by dividing net income for the period by the
weighted average number of shares of common stock outstanding.

The computation of net income per common share is as follows:
<TABLE>


                                                            For the twelve months          For the twelve months
                                                            ended March 31, 1999            ended March 31, 1998
                                                        ------------------------------  -----------------------------
                                                           Basic          Diluted          Basic         Diluted
                                                           -----          -------          -----         -------
<CAPTION>
<S>                                                    <C>             <C>             <C>             <C>

Net income                                               1,130,000       1,130,000       1,120,000       1,120,000

Common shares issued                                     1,032,517       1,032,517       1,032,517       1,032,517

Net treasury shares                                        208,536         208,536         198,405         198,405

Unallocated ESOP shares                                     44,250          44,250          59,000          59,000

Ungranted shares in incentive plan                               0               0               0               0

Weighted average common shares outstanding                 779,731         779,731         775,112         775,112

Common stock equivalents based on the
   treasury stock method                                         0          48,119               0          39,603

Total weighted average common shares                       779,731         827,850         775,112         814,715
   and equivalents outstanding

Earnings per share                                           $1.45           $1.37           $1.44           $1.37



</TABLE>



                                       42
<PAGE>



EXHIBIT 13.1

1999 ANNUAL REPORT TO SHAREHOLDERS




                                       43
<PAGE>



EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT
<TABLE>

                                                                                 State of Subsidiary's
                                                                 Ownership          Incorporation or
      Parent                           Subsidiary                Percentage           Organization
<CAPTION>
<S>                             <C>                               <C>                <C>

Northwest Equity Corp.            Northwest Savings Bank            100%               Wisconsin

Northwest Savings Bank            Amery Service Agency, Inc.        100%               Wisconsin

Northwest Savings Bank            Northwest Investments, Inc.       100%               Nevada
</TABLE>



                                       44
<PAGE>



EXHIBIT 23.1

CONSENT OF WIPFLI ULLRICH BERTELSON LLP

ACCOUNTANT'S CONSENT

We consent to the use and/or incorporation by reference in the Annual Report and
Form 10-KSB405 of Northwest Equity Corp. for the year ended March 31, 1999, of
our report dated April 30, 1999, accompanying the financial statements and
schedules of the Company contained, or incorporated by reference, in such
Annual Report.

                                          /s/__Wipfli Ullrich Bertelson LLP__

                                               Wipfli Ullrich Bertelson LLP

Wisconsin Rapids, Wisconsin
June 8, 1999



                                       45
<PAGE>




EXHIBIT 99.1

PROXY STATEMENT
 FOR 1999 ANNUAL MEETING OF  SHAREHOLDERS


                                       46
<PAGE>