TABLE OF CONTENTS


                                                                           Page

Company Profile.........................................................     1
Financial Highlights of Northwest Equity Corp...........................     2
Letter to Shareholders..................................................     3
Financial Table of Contents.............................................     4
Selected Consolidated Financial and Other Data of Northwest Equity Corp.     5
Management's Discussion and Analysis of Financial Condition
  and Results of Operations of Northwest Equity Corp....................     7
Independent Auditor's Report............................................    24
Consolidated Financial Statements of Northwest Equity Corp.
   Consolidated Balance Sheets of the Company at March 31, 1999 and 1998.   25
   Consolidated Statements of Operations of the Company for the Years Ended
      March 31, 1999, 1998 and 1997......................................   26
   Consolidated Statements of Shareholders' Equity of the Company for the
     Years Ended March 31, 1999, 1998 and 1997...........................   27
   Consolidated Statements of Cash Flows of the Company for the Years Ended
     March 31, 1999, 1998 and 1997.......................................   28
Notes to Consolidated Financial Statements of Northwest Equity Corp......   30
Shareholder Information..................................................   53


                                 COMPANY PROFILE

         Northwest  Equity Corp. is the holding company for Northwest Savings
Bank.  The Bank converted from a Wisconsin-chartered mutual savings bank to a
Wisconsin-chartered stock savings bank on October 7, 1994 (the  "Conversion").
In  connection  with the Conversion,  Northwest  Equity  Corp.  sold  1,032,517
shares of its  Common  Stock at $8.00  per share and used a portion  of the net
proceeds to purchase all of the issued and outstanding capital stock of the
Bank.

         Northwest Savings Bank was established in 1936, and is regulated by the
Wisconsin Department of Financial Institutions and the Federal Deposit Insurance
Corporation.   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 Bank's principal business consists of attracting
funds in the form of deposits and investing such funds  primarily in residential
real estate loans,  mortgage-backed and related securities, and various types of
commercial and consumer loans. The Bank has three  full-service  offices located
in Polk,  St. Croix and Burnett  Counties,  Wisconsin.  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.

      Northwest  Equity Corp.'s common stock trades on The Nasdaq SmallCap Stock
Market under the symbol "NWEQ."

         The Nasdaq Stock Market,  which began operation in 1971, is the world's
first electronic  securities  market and the fastest growing stock market in the
U.S.   Nasdaq   utilizes   today's   information   technologies--computers   and
telecommunications--to  unite its  participants  in a  screen-based  market.  It
enables market  participants  to compete with each other for investor  orders in
each Nasdaq  security and,  through the use of Nasdaq  Workstation  II and other
automated  systems,  facilitates  the trading and  surveillance  of thousands of
securities.  This  competitive  marketplace,  along with the many  products  and
services available to issuers and their  shareholders,  attracts today's largest
and fastest  growing  companies to Nasdaq.  These  include  industry  leaders in
computers,  pharmaceuticals,  telecommunications,  biotechnology,  and financial
services.  More domestic and foreign  companies list on Nasdaq than on all other
U.S. stock markets combined.



                                       1
<PAGE>




                 FINANCIAL HIGHLIGHTS OF NORTHWEST EQUITY CORP.



<TABLE>


                                                              At or For the Fiscal Year Ended March 31,
                                                    1999                        1998                        1997
                                                    ----                        ----                        ----
                                                      (Dollars in thousands, except per share data and ratios)
<CAPTION>
<S>                                              <C>                         <C>                         <C>


Total Assets...............................        97,585                      98,739                      95,097

Loans Receivable, Net......................        73,347                      78,297                      77,240

Securities held to maturity................         9,435                       9,398                      10,173

Shareholders' Equity.......................        12,361                      11,514                      10,859

Net Interest Income After
  Provision for Loan Losses................         3,353                       3,420                       3,339

Total Other Income.........................           736                         608                         531

Total General and
  Administrative Expenses..................         2,465                       2,298                       2,643

Net Income.................................         1,133                       1,120                         710

Basic Earnings Per Share...................         $1.45                       $1.44                       $0.84

Diluted Earnings Per Share.................         $1.37                       $1.37                       $0.83

Return on Average Assets...................          1.15%                       1.15%                        .76%

Return on Average Equity...................          9.50%                       9.85%                       6.18%

Interest Rate Spread.......................          3.50%                       3.50%                       3.51%

Net Interest Margin........................          4.08%                       3.85%                       3.88%

Non-Performing Loans
  to Gross Loans...........................           .32                        1.76                        1.37

</TABLE>


                                       2
<PAGE>



                             LETTER TO SHAREHOLDERS

         The Board of Directors  ("Board")  and  employees  of Northwest  Equity
Corp.  ("Company"),  the holding company of Northwest Savings Bank, are proud to
present  the fifth  annual  report  since the stock  conversion  consummated  on
October 7, 1994. On February 17, 1999,  the Board  announced that it had entered
into a definitive agreement and plan of merger with Bremer Financial Corporation
("Bremer"), for Bremer to acquire Northwest stock in a transaction,  which would
be valued at $24.00 in cash for each share outstanding. "We're excited about the
opportunity  to serve the  customers  of Northwest  Savings  Bank," said Stan K.
Dardis,  Bremer Financial President and CEO. "The two organizations fit together
naturally  since  both  share a strong  history  of  serving  customers  and the
communities in which they live." I said, "The combining of our two  institutions
will merge similar customer bases and banking philosophies with the advantage of
extending a greater variety of products,  services and banking  locations to the
Northwest  customer  base.  We believe the  opportunity  for enhanced  financial
services to be provided to our customers when combined with the financial  terms
offered to our shareholders offers a very attractive package."

         Bremer  Financial  Corporation,  a privately  held  regional  financial
services  company  with $3.4  billion in assets,  is the holding  company for 86
banks in Minnesota,  North Dakota and Wisconsin.  The Otto Bremer Foundation and
Bremer's more than 1500 employees own Bremer.  Bremer is  headquartered in Saint
Paul, Minnesota.

     The Northwest Equity  Corp.(the  "Company") was incorporated on November 3,
1993, at the direction of the Bank to become a bank holding  company and own all
of the Bank's capital stock to be issued upon its conversion from mutual form to
stock ownership (the  "Conversion").  On October 7, 1994, the Bank completed the
Conversion.  On that date, the Company  issued and sold 1,032,517  shares of its
Common Stock at $8.00 per share.  The gross proceeds from the sale of the shares
of Common Stock were $8.3 million.  Since that time the Company has  repurchased
207,216 shares in various stock buy-back  programs and reissued 647 shares under
a stock option program.  At $24.00 per share for 825,301 remaining  shares,  the
gross proceeds from the sale to Bremer are $19.8 million.

     The  transaction is expected to be completed by the fourth quarter of 1999,
pending regulatory  approval and approval of Northwest  shareholders.  Northwest
stock has been very thinly traded,  subject to wide spreads  between the Bid and
the Asked, and,  consequently,  subject to wide fluctuations in price. A special
meeting will be held for the  shareholders  to vote on this proposal.  The proxy
statement  for the  special  meeting  will  contain th  edetails of the long and
tedious  process that was  implemented  to insure the  shareholder  received the
highest possible price. The Board strongly  recommends that shareholders vote to
approve this transaction.

                                           /s/Brian L. Beadle
                                          Brian L. Beadle
                                          President and Chief Executive Officer



                                       3
<PAGE>




                           FINANCIAL TABLE OF CONTENTS


                                                                           Page

Selected Consolidated Financial and Other Data of Northwest Equity Corp..    5

Management's Discussion and Analysis of Financial Condition and
Results of Operations of Northwest Equity Corp.:

         General..........................................................   7

         Management Strategy..............................................   8

         Comparison of Operating Results for the Years Ended
           March 31, 1999 and March 31, 1998..............................  10

         Comparison of Operating Results for the Years Ended
           March 31, 1998 and March 31, 1997..............................  13

         Financial Condition..............................................  15

         Liquidity, Capital Resources and Regulatory Capital..............  16

         Impact of Inflation and Changing Prices..........................  17

         Current Accounting Developments..................................  18

         Asset/Liability Management.......................................  19

         Average Balance Sheet............................................  22

         Rate/Volume Analysis.............................................  23

Independent Auditor's Report..............................................  24

Consolidated Financial Statements of Northwest Equity Corp.:

         Consolidated Balance Sheets at March 31, 1999 and 1998...........  25

         Consolidated Statements of Operations for the Years Ended
            March 31, 1999, 1998 and 1997.................................  26

         Consolidated Statements of Shareholders' Equity for the Years Ended
            March 31, 1999, 1998 and 1997.................................  27

         Consolidated Statements of Cash Flows for the Years Ended
            March 31, 1999, 1998 and 1997.................................  28

Notes to Consolidated Financial Statements of Northwest Equity Corp.......  30



                                       4
<PAGE>




                SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF
                             NORTHWEST EQUITY CORP.

         Set forth below are selected  consolidated  financial and other data of
the Company.  The financial  data is derived in part from, and should be read in
conjunction with, the Consolidated Financial Statements of the Company and notes
thereto that are presented elsewhere in this Annual Report.

<TABLE>


                                                                                 At March 31,
                                                              ---------------------------------------------------
                                                                   1999              1998              1997
                                                              ---------------    --------------    --------------
<CAPTION>
                                                                             (In thousands)
<S>                                                             <C>               <C>               <C>

Selected Financial Data:

Total assets                                                      $97,585           $98,739           $95,097
Loans receivable, net                                              73,347            78,297            77,240
Loans held for sale                                                   143               142               415
Cash and cash equivalents                                          10,470             6,047             2,980
Securities available-for-sale                                           -                 -             2,752
Mortgage-backed and related securities                              6,037             6,398             7,421
FHLB stock                                                            850             1,159               912
Deposits                                                           62,003            62,278            61,557
FHLB advances and other borrowings                                 22,615            24,320            22,097
Shareholder's Equity - substantially restricted                    12,361            11,514            10,859

                                                                          Fiscal Year Ended March 31,
                                                                    1999              1998              1997
                                                               ---------------    --------------    --------------
                                                                                  (In thousands)
Selected Operating Data:

Total interest income                                              $7,781            $7,763            $7,492
Total interest expense                                              4,052             4,243             4,072
                                                                   ------            ------            ------
    Net interest income                                             3,729             3,520             3,420
Provision for loan losses                                             376               100                81
                                                                   ------            ------            ------
    Net interest income after provision for loan
      losses                                                        3,353             3,420             3,339
Non-interest income:
    Mortgage servicing fees                                            94                77                77
    Service charges on deposits                                       252               251               220
    Loss on sale of investments                                         -               (24)                -
    Gain on sale of mortgage loans                                    206               130                59
    Other non-interest income                                         184               174               175
                                                                   ------            ------            ------
      Total other non-interest income                                 736               608               531

Total general and administrative expenses                           2,465             2,298             2,643
Income before income tax expense                                    1,624             1,730             1,227
Income tax expense                                                    491               610               517
                                                                   ------            ------            ------

    Net Income                                                      1,133             1,120               710
</TABLE>




                                       5
<PAGE>





                SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF
                         NORTHWEST EQUITY CORP. (CONT.)

<TABLE>

Selected Financial Ratios and Other Data:                                  At or For the Fiscal Year
                                                                                Ended March 31,
                                                               ---------------------------------------------------
Performance Ratios                                                  1999              1998              1997
                                                               ---------------    --------------    --------------
<CAPTION>
<S>                                                              <C>               <C>               <C>

    Return on average assets                                        1.15%             1.15%             0.76%
    Return on average equity                                        9.50%             9.85%             6.18%
    Interest rate spread during period(1)                           3.50%             3.50%             3.51%
    Net interest margin(1)                                          4.08%             3.85%             3.88%
    Non-interest expense to average assets                          2.89              2.47              2.84
    Non-interest income to average assets                           0.75              0.63              0.57
    Average interest-earning assets to
       average interest-bearing liabilities                         1.07x             1.07x             1.08x

Asset Quality Ratios

    Non-performing loans to gross loans(2)                          0.32%             1.76%             1.37%
    Non-performing assets to total assets(2)                        0.31%             1.57%             1.13%
    Allowance for loan losses to non-performing
        loans(2)                                                  157.56%            34.87%            43.04%
    Classified assets to total assets                               0.66%             1.91%             1.40%
    Net charge-offs to average gross loans                          0.62%             0.11%             0.07%

Capital Ratios

    Average Equity to average assets                               12.14%            11.51%            12.36%
    Equity to total assets at end of period                        12.67%            11.66%            11.42%

Other Data

    Number of deposit accounts                                      9,448             9,519             9,440
    Number of real estate loans outstanding                         1,464             1,652             1,670
    Number of real estate loans serviced                            2,146             2,318             2,206
    Number of consumer loans outstanding                              974             1,092             1,108
    Mortgage loan originations (in thousands)                     $47,763           $29,720           $29,086
    Full-service facilities                                             3                 3                 3

<FN>

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

(1) Interest rate spread represents the difference  between the weighted average
    yield  on   interest-earning   assets  and  the  weighted  average  cost  of
    interest-bearing  liabilities.  Net interest margin  represents net interest
    income as a percentage of average interest-earning assets.

(2) Non-performing  loans consist of non-accrual  loans.  Non-performing  assets
    consist of non-performing loans and foreclosed properties.
</FN>
</TABLE>



                                       6
<PAGE>



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                     CONDITION AND RESULTS OF OPERATIONS OF
                             NORTHWEST EQUITY CORP.

General

         Northwest Equity Corp., a Wisconsin  corporation (the "Company"),  is a
holding company that owns all of the issued and  outstanding  stock of Northwest
Savings Bank, a  Wisconsin-chartered  stock  savings bank (the "Bank").  In this
discussion and analysis,  reference to the operations and financial condition of
the Company includes the operations and financial condition of the Bank.

         The Company was  incorporated  on November 3, 1993, at the direction of
the Bank to become a bank  holding  company  and own all of the  Bank's  capital
stock to be issued upon its conversion  from mutual form to stock ownership (the
"Conversion").  On October 7, 1994, the Bank completed the  Conversion.  On that
date, the Company issued and sold 1,032,517  shares of its Common Stock at $8.00
per share.  The gross  proceeds from the sale of the shares of Common Stock were
$8.3 million. Net proceeds to the Company were $6.9 million,  after deduction of
Conversion expenses of $0.6 million and after lending $0.8 million to the Bank's
Employee Stock Ownership Plan. The Company used $3.4 million of the net proceeds
to acquire all of the issued and outstanding stock of the Bank.

         The Company's  business currently consists of the business of the Bank.
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 Bank'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,  mortgage  related
securities,  including collateralized mortgage obligations, and various types of
commercial and consumer loans. The Bank's primary sources of funds are deposits,
repayment on loans and mortgage-backed and related securities, and advances from
the Federal Home Loan Bank of Chicago ("FHLB-Chicago").  The Bank utilizes these
funds to invest  primarily  in  mortgage  loans  secured by  one-to-four  family
properties, and to a lesser extent, consumer, commercial and other loans, and to
invest  in   mortgage-backed   and  related   securities  and  other  investment
securities.  The Bank is  regulated  by the  Wisconsin  Department  of Financial
Institutions ("DFI") and the Federal Deposit Insurance Corporation ("FDIC"), and
its  deposits  are insured up to  applicable  limits by the Savings  Association
Insurance Fund ("SAIF"). The Bank also is a member of the Federal Home Loan Bank
System.

         The  earnings  of the  Company  depend  primarily  on its  level of net
interest income.  Net interest income is the difference  between interest earned
on   interest-earning   assets,   consisting   primarily   of  mortgage   loans,
mortgage-backed and related securities and other investment securities,  and the
interest paid on interest-bearing liabilities,  consisting primarily of deposits
and advances  from the  FHLB-Chicago.  Net interest  income is a function of the
Company's  "interest rate spread,"  which is the difference  between the average
yield  earned  on   interest-earning   assets  and  the  average  rate  paid  on
interest-bearing  liabilities,  as well as a function of the average  balance of
interest-earning assets as compared to interest bearing-liabilities. Many of the
Company's  assets,  including  mortgage  loans and  mortgage-backed  and related
securities, are subject to reinvestment risk. During periods of falling interest
rates, higher yielding loans and  mortgage-backed  securities are more likely to
prepay,  and  the  Company  may  not be  able  to  reinvest  the  proceeds  from
prepayments in loans or securities with yields similar to those  prepaying.  The
Company's  operating  results also are affected to a lesser extent by the amount
of its  non-interest  income,  including  loan  servicing and loan related fees,
gains on sales of mortgage loans, as well as transactional and other fee income.
Additionally,  gains  or  losses  on  the  sale  of  investment  securities  and
mortgage-backed  and related  securities  may affect net income.  The  Company's
non-interest  expense consists principally of employee  compensation,  occupancy
expenses,   federal   deposit   insurance   premiums   and  other   general  and
administrative  expenses.  General economic conditions and the monetary,  fiscal
and  regulatory  policies  of  governmental  agencies  significantly  affect the
Company's operating results.  The demand for and supply of housing,  competition
among  lenders,  the  level of  interest  rates  and the  availability  of funds
influence  lending  activities.  Deposit  flows and  prevailing  market rates of
interest on competing investment alternatives, account maturities and the levels
of personal  income and savings in the Company's  market areas likewise  heavily
influences the costs of funds.


                                       7
<PAGE>



Regulatory Developments Related to Deposit Insurance

         The FDIC is an independent federal agency that insures the deposits, up
to  prescribed   statutory  limits,  of  federally  insured  banks  and  savings
institutions  and safeguards the safety and soundness of the banking and savings
industries.  Two separated  insurance funds, the Bank Insurance Fund ("BIF") and
the Savings Associations Insurance Fund ("SAIF") are maintained and administered
by the FDIC. The Bank is a member of SAIF and the FDIC has examination authority
over the Bank. The FDIC is authorized to establish  separate  annual  assessment
rates for  deposit  insurance  for  members  of the BIF and  SAIF.  The FDIC may
increase  assessment  rates for either fund if  necessary  to restore the fund's
ratio of reserves to insured  deposits to it target  level  within a  reasonable
time and may decrease such  assessment  rates if such target level has been met.
The FDIC has  established a risk-based  assessment  system for both SAIF and BIF
members.  Under this system,  assessments  are set within a range,  based on the
risk the  institution  poses to its deposit  insurance  fund. This risk level is
determined  based on the  institution's  capital  level and the FDIC's  level of
supervisory concern about the institution.

Management Strategy

         Management's  strategy has focused on managing the  Company's  interest
rate risk and  maintaining  credit quality by emphasizing  residential  lending,
primarily loans secured by one-to-four family, owner-occupied dwellings.

         Residential Mortgage Lending Emphasis:  The Company's primary investing
activity is the  origination of one-to-four  family  residential  mortgage loans
secured by owner-occupied  properties. At March 31, 1999, $54.1 million or 73.4%
of gross loans consisted of such loans. Mortgage loan originations totaled $47.8
million,  $29.3  million and $29.0  million for the fiscal years ended March 31,
1999, 1998 and 1997,  respectively.  The Company generally  originates ARM loans
for retention in its loan  portfolio  and  generally  sells all fixed rate loans
originated to the secondary markets.

         Management of Interest  Rate Risk:  The Company has attempted to reduce
its interest rate risk by emphasizing the origination of ARM loans for retention
in its loan portfolio and by selling  substantially  all of its fixed rate loans
originated.  At March 31, 1999,  $59.7 million or 81.4% of net loans  receivable
were ARM loans.  Management  believes  this  strategy has reduced  income due to
lower initial yields on these  investments  in comparison to  longer-term  fixed
rate investments. However, management believes reducing its exposure to interest
rate  fluctuations  tends to reduce the volatility of the Company's net interest
income over the long-term.

         To  maintain  the  Company's  net  interest  margin,   satisfy  certain
liquidity  requirements by the Department of Financial  Institutions ("DFI") and
manage   interest  rate  risk,   the  Company  has  maintained  a  portfolio  of
mortgage-backed   and  related   securities   held-to-maturity.   The  Company's
mortgage-backed securities held-to-maturity at March 31, 1999, were $6.0 million
or 6.1% of total  assets,  and at March 31,  1998,  were $6.4 million or 6.5% of
total assets.

         Management has adopted a strategy designed to achieve acceptable levels
of matching of its assets and liabilities  and their repricing  characteristics.
The primary  elements of this strategy  involve  emphasizing the origination and
purchase of  adjustable-rate  assets,  and  utilizing  FHLB-Chicago  advances to
purchase  participation  interests in loans with similar terms to maturities and
higher yields.  Over the last five fiscal years,  the Company has emphasized the
matching of interest rate sensitivities  through the sale of fixed rate mortgage
loans  originated,  the  origination  of ARM loans,  the repayment of fixed rate
mortgage   assets,   and  the  purchase  of   short-term   and   adjustable-rate
mortgage-backed  and  related  securities.  At March  31,  1999,  the  Company's
one-year  interest  rate  sensitivity  gap as a percentage of total assets was a
negative  4.43%.  During  periods of rising  interest  rates,  a  negative  rate
sensitivity gap would tend to negatively  affect net interest  income;  however,
during periods of falling  interest rates, a negative  interest rate sensitivity
gap would tend to positively affect net interest income.

         In fiscal  1999,  the Company  leveraged  its capital base by using the
proceeds  of  borrowings  from  the   FHLB-Chicago  and  deposits  to  originate
additional  loans.  FHLB advances  decreased to $17.0 million at March 31, 1999,
compared to $19.1 million at March 31, 1998. The Company  intends to continue to
leverage its capital base by using FHLB-advances.

         Asset Quality:  The Company  emphasizes  high asset quality in both its
investment portfolio and lending activities.  Non-performing  assets have ranged
between .31% and 1.57% of total assets during the last three years and were .31%
of total assets at March 31, 1999. During the fiscal years ended March 31, 1999,
1998 and 1997,  the Company recorded provisions for loan losses of $376,000,
$100,000, and $81,000, respectively, to its allowance for


                                       8
<PAGE>


loan losses and had net charge-offs of $485,000, $77,000, $53,000, respectively.
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 0.51% at March 31, 1999.

         Management and Development of Customer Base: The Company has focused on
managing  deposits to maintain its capital  ratios and improve the  stability of
its deposit base. In this regard,  management has emphasized an increased  level
of service to its customers to retain and attract core  deposits.  In 1988,  the
Bank built and opened a new home office and implemented a strategy to expand the
services  it  offers  beyond  those  services  traditionally  offered  by thrift
institutions.   These  services   include   checking   accounts,   ATMs,   night
depositories, safe deposit boxes, drive-through banking, and investment products
through its subsidiary,  in order to create broad banking relationships with its
customers.  This  expansion of services  continued with the grand opening of the
remodeled and expanded branch office in New Richmond, Wisconsin in June 1996.


Comparison  of  Operating  Results for the Fiscal Years Ended March 31, 1999 and
March 31, 1998

General

         Net income for the fiscal year ended March 31, 1999,  increased $13,000
or 1.2% to $1,133,000  from $1,120,000 for the fiscal year ended March 31, 1998.
The  increase in net income was  primarily  due to an  increase in net  interest
income of $209,000  from $3.5  million for the fiscal year ended March 31, 1998,
to $3.7  million  for the  fiscal  year  ended  March 31,  1999,  and a $128,000
increase in total other  income to $736,000  for the fiscal year ended March 31,
1999,  from $608,000 for the fiscal year ended March 31, 1998.  These  increases
was offset by a $276,000  increase in the  provision for loan losses to $376,000
for the fiscal year ended March 31, 1999,  from  $100,000 for the for the fiscal
year ended  March 31,  1998.  The  increase  in the  provision  for loan  losses
reflects the  settlement of the case first reported under Part II, Item 1. Legal
Proceedings in the Form 10QSB dated September 30, 1996, and in subsequent  10QSB
and 10KSB reports. Return on average assets increased 1.16 % for the fiscal year
ended March 31, 1999, from 1.15% for the prior year and return on average equity
decreased  9.59 % from  9.85% for the same  years.  General  and  administrative
expenses for the fiscal year ended March 31, 1999, increased $167,000 or 7.3% to
$2.5 million from $2.3  million for the prior  fiscal  year.  This  increase was
partially  offset by a reduction of $119,000 in provision  for income taxes from
$610,000  for the fiscal year ended March 31,  1998,  to $491,000 for the fiscal
year ended March 31, 1999.

Net Interest Income

         Net interest income for the fiscal year ended March 31, 1999, increased
$209,000  or 5.9% to $3.7  million  from $3.5  million for the fiscal year ended
March 31, 1998.  The increase in net interest  income is a result of an increase
in interest  income of $18,000 to $7,781,000 for the fiscal year ended March 31,
1999,  compared to $7,763,000 for the fiscal year ended March 31, 1999; combined
with a decrease in interest  expense of  $191,000 to  $4,052,000  for the fiscal
year ended March 31, 1999,  from  $4,243,000 for the fiscal year ended March 31,
1998.

Interest Income

         Interest  income  increased  $18,000 or 0.23% to $7.78  million for the
fiscal year ended  March 31,  1999 from $7.76  million for the fiscal year ended
March 31, 1998.  Interest income on loans  decreased  $12,000 from $6.97
million for the fiscal year ended March 31, 1998,  to $6.96  million for the
fiscal year ended March 31, 1999.  The

                                       9
<PAGE>


decrease in interest  income on loans results from a decrease of $1.13 million
in the average outstanding balance of total loans to $78.3 million for the
fiscal year ended March 31, 1999 from $79.5 million for the fiscal year ended
March 31,  1998. Interest on mortgage-backed securities decreased  $64,000 to
$430,000  for the fiscal year ended  March 31,1999, from $494,000 for the fiscal
year ended March 31 ,1998. This decrease was due to a decrease in the average
outstanding  balance of mortgage backed securities from $6.9 million for the
fiscal year ended March 31, 1998, to an average outstanding balance of $6.2
million for the fiscal year ended  March 31, 1999. Interest on investments
increased  $94,000  to  $394,000  for the fiscal year ended  March 31,1999,
compared to $300,000  for the fiscal  year ended March  31,1998.  The increase
was  due  to an  increase  in  the  average outstanding  balances  of
interest-bearing deposits  in  other financial institutions, investment
securities,  and Federal Home Loan Bank ("FHLB") stock of $1.9 million from
$5.0 million for the fiscal year ended March 31,1998, to $6.9 million for the
fiscal year ended March 31,1999.

Interest Expense

         Interest  expense  decreased  $191,000 or 4.5% to $4.05 million for the
fiscal year ended March 31, 1999,  from $4.24  million for the fiscal year ended
March 31, 1998.  The decrease is due to the decrease in the average rate paid on
interest-bearing  liabilities  decreased of 0.26% from 4.99% for the fiscal year
ended March 31,  1998,  to 4.73% for the fiscal year ended March 31,  1999.  The
average  outstanding  balance of  interest-bearing  liabilities  increased  $0.6
million  from $85.1  million  for the fiscal  year ended March 31, 1998 to $85.7
million for the fiscal year ended March 31, 1999.. Interest on savings decreased
$84,000 or 2.9% to $2.8 million for the fiscal year ended March 31,  1999,  from
$2.9 million for the fiscal year ended March 31, 1998.  The decrease in interest
expense  was the  result  of a  decrease  of 0.16%  from  4.65%  in the  average
yield/rate  during the fiscal year ended  March 31,  1998,  to 4.49%  during the
fiscal year ended March 31, 1999.  The average  outstanding  balance of deposits
increased  $339,000 to $62.6  million for the fiscal year ended March 31,  1999,
from  $62.3  million  for the fiscal  year ended  March 31,  1998.  Interest  on
borrowings decreased $107,000 or 7.9% to $1.24 million for the fiscal year ended
March 31, 1999, from $1.35 million for the fiscal year ended March 31, 1998. The
decrease in interest on borrowings  was the result of an decrease in the average
rate on advances and other  borrowings  to 5.38% for the fiscal year ended March
31, 1999,  from 5.91% for the fiscal year ended March 31, 1998.  The decrease in
the  average  rate was the result of lower  interest  rates  offered by the FHLB
during the fiscal year.  The average  balance of advances  and other  borrowings
increased  $236,000 from $22.8 million for the fiscal year ended March 31, 1998,
to $23.1 million for the fiscal year ended March 31, 1999.

Provision for Loan Losses

         The  provision for loan losses  increased  $276,000 to $376,000 for the
fiscal year ended March 31, 1999, compared to $100,000 for the fiscal year ended
March 31, 1998.  The increase  provides for the settlement of a loan reported in
the Legal  Proceedings and Provision for Loan Losses sections of 10QSB and 10KSB
reports since September 30, 1996. The allowance for loan losses totaled $375,000
at March 31, 1999,  compared to $484,000 at March 31, 1998, and represented 0.50
% and  0.61% of gross  loans  and  157.6%  and  34.9% of  non-performing  loans,
respectively. The allowance for loan losses calculation is based on a three year
actual loss average,  and the current  allowance  calculation  incorporates  the
effect of the loan  provided  for in the  provision  for loan  losses  mentioned
above.

Other Income

                  Total other income increased $128,000 or 21.1% to $736,000 for
the fiscal year ended March 31,  1999,  from  $608,000 for the fiscal year ended
March 31, 1998.  The increase is primarily due to an increase in gain on sale of
mortgage  loans of $76,000  from  $130,000  for the fiscal  year ended March 31,
1998, to $206,000 for the fiscal year ended March 31, 1999. The increase in gain
on sale of  mortgage  loans is due to the general  decline of mortgage  interest
rates over the two  comparable  periods  which  enhances  the bank's  ability to
generate  gains on sale of  mortgages.  The  increase is also  partially  due to
absence  of a loss on sale of  investments  in the fiscal  year ended  March 31,
1999,  compared to ($24,000) for the fiscal year ended March 31, 1998.  Mortgage
servicing  fees  increased  $17,000 from $77,000 for the fiscal year ended March
31, 1998,  to $94,000 for the fiscal year ended March 31, 1999.  Again this is a
reflection  of the  general  decline  of  mortgage  interest  rates over the two
comparable periods, which encouraged  loan-refinancing activity into fixed rates
loans that are sold on the secondary market and thus increase mortgage-servicing
fees.  Other income  increased  $10,000 from  $174,000 for the fiscal year ended
March 31,1998, to $184,000 for the fiscal year ended March 31,1999. The increase
is  partially  due to an increase  of $17,000 in  brokerage  commissions  in the
bank's  subsidiary  to $71,000 for the fiscal year ended  March  31,1999,  from


                                       10
<PAGE>


$54,000 for the fiscal year ended March  31,1998.  This increase was offset by
a decrease  of  $11,000 in the profit on sale of real  estate  held in the
Bank's subsidiary  to $50,000 for the fiscal year ended March 31,1999, compared
to $61,000  for  the fiscal year ended  March 31, 1998.  With  the transaction
consummated in the quarter ending June 30, 1998, the Bank's subsidiary
divested all of its real estate holdings.

General and Administrative Expenses

                  General and administrative expenses increased $167,000 or 7.3%
to $2.5  million  for the fiscal  year ended  March  31,1999,  compared  to $2.3
million for the fiscal year ended March 31,1998.  The increase was primarily due
to an increase of $118,000 in salaries and employee  benefits  from $1.2 million
for the fiscal year ended  March  31,1998,  to $1.3  million for the fiscal year
ended March 31,1999. The increase was due to adjustments in employee salaries in
response to intense wage  competition  for  employees in the  marketplace.  Data
processing  expenses  increased  $33,000 from $135,000 for the fiscal year ended
March 31,1998, to $168,000 for the fiscal year ended March 31,1999. The increase
was due to a  scheduled  contractual  increase  in the fee based on  transaction
volumes and a $20,000 fee for testing the data  processing  system for Year 2000
compliance. Net occupancy expense increased $15,000 from $350,000 for the fiscal
year ended March  31,1998,  to $365,000 for the fiscal year ended March 31,1999,
and reflects some  extraordinary  maintenance items occurring during the current
period.

Income Tax Expense

         Income tax expense  decreased  $119,000 or 19.5% from  $610,000 for the
fiscal year ended  March  31,1998,  to $491,000  for the fiscal year ended March
31,1999.  The decrease in income tax expense is the direct  result of a decrease
in income  before taxes of $106,000  from  $1,730,000  for the fiscal year ended
March  31,1998,  to  $1,624,000  for the fiscal  year ended March  31,1999.  The
effective tax rate for the fiscal year ended March  31,1998,  was 35.3% compared
to 30.2% for the fiscal year ended March 31,1999.  The decrease is the effective
rate was due to tax accounting related to the restricted stock plan award.

Comparison  of  Operating  Results for the Fiscal Years Ended March 31, 1998 and
March 31, 1997

General

         Net income for the fiscal year ended March 31, 1998, increased $410,000
or 57.7% to $1.1 million from $710,000 for the fiscal year ended March 31, 1997.
Return on average assets  increased to 1.15% for the fiscal year ended March 31,
1998,  from 0.76% for the prior year and return on average  equity  increased to
9.85%  from  6.18% for the same  years.  The  increase  in the return on average
assets was primarily due to the $389,000 decrease in federal insurance  premiums
from $428,000 for the fiscal year ended March 31, 1997 to $39,000 for the fiscal
year ended March 31, 1998. The decrease resulted from the absence in the current
fiscal year of the one-time $350,000 special assessment to recapitalize the SAIF
insurance  fund paid to the FDIC in the quarter ended  September  30, 1997.  Net
interest income before provision for loan losses  increased  $100,000 or 2.9% to
$3.5 million for the fiscal year ended March 31, 1998, from $3.4 million for the
fiscal year ended March 31, 1997. This increase was primarily due to an increase
in  interest  income of  $271,000,  partially  offset by an increase in interest
expense of $171,000.  Provision for loan losses  increased 23.5% to $100,000 for
the fiscal year ended  March 31,  1998,  from  $81,000 for the fiscal year ended
March 31, 1997.  The increase  reflects a full fiscal  year's  provisions  for a
large  commercial  loan discussed  previously  under Asset Quality.  Total other
income  increased  by $77,000 to  $608,000  for the fiscal  year ended March 31,
1998, from $531,000 for the fiscal year ended March 31, 1997. This was primarily
due to an increase  gain on sale of mortgage  loans of $71,000  from $59,000 for
the fiscal year ended  March 31,  1997,  to  $130,000  for the fiscal year ended
March 31, 1998.  General and  administrative  expenses for the fiscal year ended
March 31,  1998,  decreased  $345,000 or 13.1% to $2.3 million from $2.6 million
for the prior fiscal year. The decrease was due to a $389,000  decrease  federal
insurance  premiums  that was offset by an increase  of $10,000 in salaries  and
employee benefits, and a $14,000 increase in net occupancy expense and a $16,000
increase in other expense.

Net Interest Income

         Net interest income for the fiscal year ended March 31, 1998, increased
$100,000 or 2.9% to $3.5  million  from $3.4  million  for the prior  year.  The
increase was due to an increase in interest income of $271,000, partially offset
by an increase in interest expense of $171,000.  The improvement in net interest
income  primarily  reflects an increase  in the average  outstanding  balance of
total  interest-earning  assets to $91.4 million for the fiscal year ended
March 31, 1998 compared to $88.1 million for the prior fiscal year.  The
increase in the Company's net earning asset

                                       11
<PAGE>


position  was  attributable primarily to an increase in the average outstanding
balance of total loans funded  by the increase in total deposits and advances
and other borrowings.

Interest Income

         Interest  income  increased  $271,000  or 3.6% to $7.8  million for the
fiscal  year ended  March 31,  1998 from $7.5  million for the fiscal year ended
March 31, 1997. The increase is partially due to a $267,000 increase in interest
income on loans from $6.7 million for the fiscal year ended March 31,  1997,  to
$7.0 million for the fiscal year ended March 31, 1998.  The increase in interest
income  on  loans  results  from an  increase  of $2.9  million  in the  average
outstanding balance of mortgage loans to $67.1 million for the fiscal year ended
March 31, 1998 from $64.2  million  for the fiscal  year ended  March 31,  1997.
Interest on commercial loans decreased $46,000 from $417,000 for the fiscal year
ended March 31, 1997, to $371,000 for the fiscal year ended March 31, 1998.  The
decrease is due to the non-accrual status of the large commercial loan discussed
under  Asset  Quality.  As a  result,  the  average  yield on  commercial  loans
decreased  from 9.19% for the fiscal year ended March 31, 1997, to 7.80% for the
fiscal year ended March 31, 1998.  Interest on consumer loans increased  $18,000
from  $731,000  for the fiscal year ended March 31,  1997,  to $749,000  for the
fiscal year ended March 31, 1998.  The increase  results from an increase in the
average  outstanding balance of consumer loans to $7.7 million during the fiscal
year ended March 31, 1998,  from $7.5 million during the fiscal year ended March
31, 1997. Interest on mortgage-backed  and related securities  decreased $62,000
to $494,000  for the fiscal year ended March 31,  1998,  from  $556,000  for the
prior  fiscal  year.  The  decrease is the result of the decrease in the average
balance of  mortgage-backed  and related  securities  from $7.6  million for the
fiscal  year ended  March 31,  1997,  to $6.9  million for the fiscal year ended
March 31, 1998. The decrease in mortgage-backed  securities was due to scheduled
principal  payments and  prepayments.  Interest on interest  bearing deposits in
other financial  institutions increased $52,000 from $23,000 for the fiscal year
ended March 31, 1997,  to $75,000 for the fiscal year ended March 31, 1998.  The
average  outstanding  balance of interest  bearing  deposits in other  financial
institutions increased from $461,000 during the fiscal year ended March 31, 1997
to $818,000  during the fiscal year ended March 31, 1998. The increase  reflects
the larger cash  balances  held as a result of the  establishment  of the Nevada
investment  subsidiary.  Interest and dividends on investments increased $66,000
to $300,000  for the fiscal year ended March 31,  1998,  from  $234,000  for the
fiscal year ended March 31, 1997.  The increase was  partially due to a increase
in the average yield of investment securities to 5.95% for the fiscal year ended
March 31,  1998 from  5.53% for the  fiscal  year  ended  March 31,  1997.  This
increase  resulted from the  restructuring  of the investment  portfolio,  which
created a $24,000  loss on the sale of  investments,  but acted to increase  the
current yield of the remaining investments.  Dividends on Federal Home Loan Bank
stock  increased  $14,000 to $68,000 for the fiscal  year ended March 31,  1998,
from $54,000 for the fiscal year ended March 31,  1997.  The increase was due to
an increase of the average  outstanding  balance of Federal Home Loan Bank stock
from $837,000  during the fiscal year ended March 31, 1997,  to $996,000  during
the fiscal year ended March 31, 1998.  The  increase in the stock  balance was a
requirement of the Federal Home Loan Bank due to the increase in advances during
the fiscal year ended March 31, 1998.  The average yield on all of the Company's
total interest-earning assets of 8.50% for the fiscal year ended March 31, 1998,
remained relatively unchanged from the 8.51% for the fiscal year ended March 31,
1997. The increase in average balances of loans and  mortgage-backed and related
securities  were  principally  funded by increases in deposits and advances from
the FHLB-Chicago.

Interest Expense

         Interest  expense  increased  $171,000 or 4.2% to $4.2  million for the
fiscal year ended March 31,  1998,  from $4.1  million for the fiscal year ended
March 31, 1997.  The increase is due to the increase in the average  outstanding
balance of  interest-bearing  liabilities of $3.7 million from $81.4 million for
the fiscal year ended March 31, 1997 to $85.1  million for the fiscal year ended
March 31, 1998. The average rate paid on interest-bearing  liabilities decreased
slightly  from 5.00% for the fiscal year ended March 31, 1997,  to 4.99% for the
fiscal year ended March 31, 1998.  Interest on savings increased $9,000 or 0.31%
to $2.9 million for the fiscal year ended March 31, 1998,  from $2.9 million for
the fiscal  year ended March 31,  1997.  The  increase  in  interest  expense on
deposits was the result of an increase in average  deposits to $62.3 million for
the fiscal year ended  March 31,  1998,  from $60.8  million for the fiscal year
ended March 31, 1997. The increase in interest on the increased savings balances
was  offset by an almost  identical  decrease  in  interest  expense  due to the
average yield during the fiscal year ended March 31, 1997, decreasing from 4.74%
to 4.65%  during the fiscal year ended March 31,  1998.  Interest on  borrowings
increased  $162,000 or 13.5% to $1.4 million for the fiscal year ended March 31,
1998,  from $1.2 million for the fiscal year ended March 31, 1997.  The increase
in interest on borrowings was the result of an increase in the average  balances
of advances  from $20.6  million for the fiscal  year ended March 31,  1997,  to
$22.8  million for the fiscal year ended March 31, 1998.  The increase was also
due to an increase in the average rate on advances and other borrowings to


                                       12
<PAGE>


5.91% for the fiscal year ended March 31, 1998,  from 5.78% for the fiscal year
ended March 31, 1997. The increase in the average rate was the result higher
interest rates offered by FHLB during the fiscal year.

Provision for Loan Losses

         The  provision for loan losses  increased  $19,000 or 23.5% to $100,000
for the fiscal year ended March 31, 1998, from $81,000 for the fiscal year ended
March 31, 1997.  The desired level of allowance for loan losses is determined by
the Company's historical loan loss experience,  the condition and composition of
the Company's  loan  portfolio  and general  conditions.  The higher  provisions
during the fiscal year ended March 31,  1998,  reflects  provisions  for a large
commercial loan discussed previously under Asset Quality. The allowance for loan
losses  totaled  $461,000 at March 31, 1997 and $484,000 at March 31, 1998,  and
represented 0.59% and 0.61% of gross loans and 43.0% and 34.9% of non-performing
loans, respectively. Management currently believes the allowance for loan losses
is at an  adequate  level to provide for  potential  loan losses and that future
provisions  for loan  losses  will be remain at $25,000  per  quarter  until the
status of the above-mentioned commercial loan is determined.

Other Income

         Total  other  income  increased  $77,000 or 14.5% to  $608,000  for the
fiscal year ended March 31, 1998,  from $531,000 for the fiscal year ended March
31,  1997.  The  increase  is  partially  due to an  increase in gain on sale of
mortgage loans of $71,000 from $59,000 for the fiscal year ended March 31, 1997,
to $130,000 for the fiscal year ended March 31, 1998. The decrease in the market
level of mortgage interest during the fiscal year acts to generate gains on sale
of mortgage  loans.  An increase in service  charges on deposits of $31,000 from
$220,000  for the fiscal year ended  March 31,  1997 to $251,000  for the fiscal
year ended March 31, 1998,  was offset by a $24,000  increase in loss on sale of
investments from $0 for the fiscal year ended March 31, 1997, to $24,000 for the
fiscal year ended March 31, 1998. The losses were incurred  while  restructuring
the investment portfolio to eliminate assets classified as  "available-for-sale"
to investments classified as "held-to-maturity".

General and Administrative Expenses

         General and administrative expenses decreased $345,000 or 13.3% to $2.3
million  for the fiscal  year ended March 31,  1998,  from $2.6  million for the
prior  fiscal  year.  The  decrease is due to an decrease of $389,000 in federal
insurance  premiums  from  $428,000 for the fiscal year ended March 31, 1997, to
$39,000 for the fiscal year ended March 31, 1998. The decrease resulted from the
absence in the current fiscal year of the one-time  $350,000 special  assessment
to  recapitalize  the SAIF  insurance fund paid to the FDIC in the quarter ended
September 30, 1997. The increase in salaries and employee benefit expense due to
cost of living salary increases,  additional personnel,  and the initiation of a
loan production  incentive  program to enhance loan officer  salaries.  This was
almost  exactly  offset by a decrease in expense from  accounting  for Company's
stock  incentive plan of $115,000 to $89,000 for the fiscal year ended March 31,
1998,  from  $204,000  for the fiscal  year  ended  March 31,  1997.  Applicable
accounting  standards required that 61.1% of the three-year cost be amortized in
the first  year,  27.8% in the  second  year and 11.1% in the  third  year.  The
accounting  for this  expense  began with the  approval of the  Company's  stock
incentive  plan in October 1995,  and will be fully  expensed the in the quarter
ending September 30, 1998. The expense associated with the Bank's Employee Stock
Ownership  Plan  (`ESOP')  increased  $28,000 from  $141,000 for the fiscal year
ended March 31, 1997, to $169,000 for the fiscal year ended March 31, 1998.  The
expense for the ESOP  reflects  the ESOP loan  payments  made by the Bank to the
Company,  which vary each year and also reflect the  application of dividends of
the ESOP stock to the balance of the note. Dividends on the ESOP stock increased
$0.14 per share from $0.40 per share for the fiscal year ended  March 31,  1997,
to $0.54 per share for the  fiscal  year ended  March 31,  1998.  Net  occupancy
expense  increased $14,000 or 4.2% from $336,000 for the fiscal year ended March
31, 1997,  to $350,000 for the fiscal year ended March 31, 1998.  Other  expense
increased  $16,000 or 2.8% to $581,000 for the fiscal year ended March 31, 1998,
from   $565,000  for  the  fiscal  year  ended  March  31,  1997.   General  and
administrative  expenses as a ratio of average assets decreased to 2.36% for the
fiscal  year ended March 31,  1998,  compared to 2.84% for the fiscal year ended
March 31,  1997,  due to the  decrease in Federal  insurance  premiums  over the
period.

Income Tax Expense

         Income  tax  expense  increased  $93,000 or 18.0% to  $610,000  for the
fiscal year ended March 31, 1998,  from $517,000 for the fiscal year ended March
31, 1997. The increase  reflects the increase in income before taxes of $503,000
from $1.2 million for the fiscal year ended March 31, 1997,  to $1.7 million for
the fiscal year ended March 31, 1998. The effective tax rates were 35.3% and
42.1% for the fiscal years ended March 31, 1998, and 1997,


                                       13
<PAGE>


respectively. The decrease in effective rate is due to the establishment of a
Nevada investment subsidiary of the Bank,  which  acts to eliminate the
Wisconsin state income tax obligation of 7.9% of net income.  Because  state
income tax is  deductible  for federal  income tax purposes, the state income
tax savings is reduced by about the federal tax rate of 34% or an effective
state tax rate savings of 5.2%



Financial Condition

        The  following  table  summarizes  certain  information  relating to the
Company's consolidated balance sheets at the dates indicated.
                                                   At March 31,
                                             1999               1998
                                             ----               ----
                                              (dollars in thousands)
Assets
Cash and cash equivalents                   10,470              6,047
Mortgage-backed securities                   6,037              6,398
FHLB stock                                     850              1,159
Loans receivable, net                       73,347             78,297

Liabilities
Deposits                                    62,003             62,278
Advances and other borrowings               22,615             24,320

Equity, substantially restricted            12,361             11,514

        Cash and cash  equivalents  increased  $4.5 million to $10.5  million at
March 31, 1999 from $6.0  million at March 31, 1998.  The increase  reflects the
general trend of lower long-term mortgage interest rates over the two comparable
periods than  encourages the Bank's loan customers to refinance  adjustable rate
mortgages  which  are held in house to fixed  rate  loan  which  are sold on the
secondary  market.  This trend then acts to increase  cash balances and decrease
mortgage loan receivable balances.

        Securities  held-to-maturity remained at $9.4 million at March 31, 1999,
and at March 31,  1998.  Some  mortgage-backed  securities  are used to  provide
collateral  for deposits in excess of the $100,000  insurance  limit through the
retail repurchase agreements program found under Other Borrowed Money and others
are used meet the DFI's liquidity requirements for savings banks.

        Net loans receivable  decreased $5.0 million from $78.3 million at March
31, 1998,  to $73.3  million at March 31,  1999.  One to four family real estate
loans  decreased  $0.9  million from $55.6  million at March 31, 1998,  to $54.1
million at March 31, 1999.  Consumer loans decreased to $7.1million at March 31,
1999, from $7.8 million at March 31, 1998.

        Deposits  were $62.0  million  and $62.3  million at March 31,  1999 and
1998,  respectively.  Deposits are the  Company's  primary  source of externally
generated funds. The level of deposits is heavily  influenced by factors such as
the general level of short- and long-term  interest rates as well as alternative
yields that  investors may obtain on competing  investment  instruments  such as
money  market  mutual  funds.  Non-certificate  of deposit  average  outstanding
balances  totaled $  23.7million  and $21.1  million at March 31, 1999 and 1998,
respectively  and  reflect the  Company's  marketing  efforts to build  multiple
relationships with its customers through an emphasis on checking  accounts.  The
average  outstanding  balance of certificates of deposit  balances totaled $38.9
million and $41.2 million, at March 31, 1999 and 1998, respectively. The Company
attempts to maintain  relationships with customers  withdrawing  certificates of
deposit by providing brokerage services for alternative  investments through its
subsidiary.

        Advances from the Federal Home Loan Bank and other borrowings  decreased
to $22.6 million at March 31, 1999 from $24.3 million at March 31, 1998, and the
average rate decreased 53 basis points to 5.38% at March 31, 1999, from 5.91% at
March 31, 1998.  The Company uses  FHLB-Chicago  advances as a funding source in
periods when market rates on certificates of deposit exceed those offered by the
FHLB-Chicago or when the growth in the loan portfolio exceeds the ability of the
Bank to attract  deposits.  FHLB-Chicago  advances  generally are fixed-rate and
short-term  with  maturities  of less  than 10  years.  The Open  Line of Credit
Program at the  FHLB-Chicago adjusts

                                       14
<PAGE>



the rate on a daily basis,  so in a rising interest rate environment such
borrowings may present the risk that the interest rates of these  borrowings
will increase.  The Company also uses borrowings from the FHLB-Chicago to manage
the total  asset/liability  portfolio of the Company.  In future periods,  the
Company intends to continue to leverage its capital base by using  the  proceeds
from  additional  FHLB-Chicago  advances  to  originate additional loans.

        Shareholders'  equity  increased  to $12.4  million  at March 31,  1999,
compared to $11.5 million at March 31, 1998. The increase from March 31, 1998 to
March 31, 1999 results from net income of $1.1 million for the fiscal year ended
March 31,  1999.  This  increase  was  offset by the  payment  of  dividends  to
shareholders  of $552,000 for the fiscal year ended March 31, 1999.  The balance
of the unearned  restricted stock plan award increased $26,000 from $(26,000) as
of March 31,  1998,  to $0 as of March 31,  1999.  The  balance of the  unearned
Employee Stock Ownership Plan compensation increased $234,000 from $(389,000) as
of March 31, 1998, to $(155,000) as of March 31, 1999.

Liquidity, Capital Resources and Regulatory Capital

        The  Company's  primary  sources of funds are  deposits,  proceeds  from
principal and interest  payments on loans,  principal  and interest  payments on
mortgage-backed  and related  securities  and  FHLB-Chicago  advances.  Although
maturity and scheduled  amortization of loans are predictable  sources of funds,
deposit flows,  mortgage  prepayments  and  prepayments on  mortgage-backed  and
related  securities  are influenced  significantly  by general  interest  rates,
economic conditions and competition.  Principal collected on long-term loans for
the fiscal year ended  March 31,  1999  increased  to $45.2  million  from $28.0
million  for the fiscal  year  ended  March 31,  1998.  Principal  collected  on
mortgage-backed  securities  for the year  ended  March 31,  1999  increased  to
$3.0million from $1.0 million for the fiscal year ended March 31, 1998.

        The primary  investing  activity of the  Company is the  origination  of
mortgage loans.  For the fiscal years ended March 31, 1999 and 1998, the Company
originated or acquired  long-term loans in the amount of $48.3 million and $29.6
million,  respectively.  The Company  purchased $2.6 million of  mortgage-backed
securities  and $0 during  the  fiscal  years  ended  March  31,  1999 and 1998,
respectively.  For the  fiscal  years  ended  March  31,  1999 and  1998,  these
activities were funded primarily by principal  repayments on long-term loans and
mortgage backed securities of $48.2 million and $29.1 million, respectively.

        The  Company is required to  maintain  minimum  levels of liquid  assets
under the DFI's regulations for  state-chartered  mutual savings banks.  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  withdrawal  accounts  plus
short-term borrowings. These assets include cash, certain time deposits, certain
bankers'  acceptances,  certain  corporate  debt  securities  and  highly  rated
commercial paper, securities of certain mutual funds and specified United States
government,  state or federal agency obligations. The Company's liquidity ratios
were  22.7% and 15.2 % at March 31,  1999 and 1998,  respectively.  The  Company
adjusts its liquidity levels to meet various funding needs and to meet its asset
and liability management objectives.

        The Company's  most liquid assets are cash and cash  equivalents,  which
include  investments in highly  liquid,  short-term  investments.  The levels of
these assets are dependent on the Company's  operating,  financing,  lending and
investing  activities  during any given period. At March 31, 1999 and 1998, cash
and cash  equivalents  were $10.5  million and $6.0 million,  respectively.  The
increase in cash and cash  equivalents  was due to general  interest rate market
conditions  that  encouraged  the Bank's loan  customers to refinance into fixed
rate loans that are sold on the secondary market from adjustable rate loans that
are held in the Bank's portfolio.  This acts to increase cash and decrease loans
receivable.

        Liquidity  management  for the Company is both an ongoing and  long-term
function of the Company's asset/liability  management strategy. Excess funds are
generally  invested in short-term  investments such as a cash management account
or overnight  deposits at the FHLB-Chicago.  Whenever the Company requires funds
beyond its ability to generate them internally,  additional sources of funds are
available  and  obtained  from  borrowings  from the  FHLB-Chicago.  The Company
utilizes  its  borrowing  capabilities  on a regular  basis.  At March 31, 1999,
FHLB-Chicago  advances were $17.0 million or 19.9% of total  liabilities  and at
March 31,  1998,  FHLB-Chicago  advances  were  $19.1  million or 21.9% of total
liabilities.  The Company also had other  borrowings  consisting  of  repurchase
agreements  amounting  to $5.6  million  and $5.3  million at March 31, 1999 and
1998,  respectively.  The Company did not have any reverse repurchase agreements
outstanding  at any of the  aforementioned  periods.  In a rising  interest


                                       15
<PAGE>


rate environment, such short-term borrowings present the risk that upon
maturity, the borrowings will have to be replaced with higher rate borrowings.

        At March 31, 1999, the Company had outstanding  loan commitments of $5.7
million. The Company had no commitments to purchase  mortgage-backed and related
securities at that date. The Company  anticipates it will have sufficient funds
available  to meet its current loan  commitments,  including loan applications
received and in process prior to the issuance of firm commitments. Certificates
of deposit that are scheduled to mature in one year or less at March 31, 1999
are $28.5 million. Based on its historical experience, management believes that
a significant portion of such deposits will remain with the Company.

        Effective  June 30,  1993,  the Bank,  as a Wisconsin  chartered  mutual
savings bank, is subject to regulation by the FDIC and the DFI.  Applicable FDIC
regulations  require  institutions to meet three capital standards:  (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.  Wisconsin chartered savings
banks also are required to maintain a minimum capital to assets ratio of 6%. The
percentage of assets for Wisconsin regulatory capital purposes is based on total
unconsolidated   assets.   Note  15  of  the  Notes  to  the  Company's  Audited
Consolidated  Financial  Statements  contains a summary of the Bank's compliance
with its regulatory capital standards at March 31, 1999.

Impact of Inflation and Changing Prices

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

Current Accounting Developments

  In June 1998, the Financial  Accounting Standards Board issued Statement
of Financial  Standards  No. 133,  Accounting  for  Derivative  Instruments  and
Hedging Activities. The Statement establishes accounting and reporting standards
requiring  that  every  derivative   instrument  (including  certain  derivative
instruments embedded in contracts) be recorded in the balance sheet as either an
asset or  liability  measured at its fair value.  The  Statement  requires  that
changes in the  derivative's  fair value be  recognized  currently  in  earnings
unless  specific  hedge  accounting  criteria are met. A special  accounting for
qualifying  hedges  typically  allows a derivative's  gains and losses to offset
related results on the hedged item in the income statement,  and requires that a
company must  formally  document,  designate,  and assess the  effectiveness  of
transactions that receive hedge accounting treatment.

Statement  133 is effective  for fiscal years  beginning  after June 15, 2000. A
company may also  implement  the  Statement  as of the  beginning of any quarter
after  issuance.  Statement 133 cannot be applied  retroactively.  Statement 133
must  be  applied  to (a)  derivative  instruments  and (b)  certain  derivative
instruments  embedded  in  hybrid  contracts  that  were  issued,  acquired,  or
substantially  modified after December 31, 1997 (and, at the company's election,
before January 1, 1998).

The statement  could  increase  volatility  in earnings and other  comprehensive
income.   The  Company   believes  that  based  on  their  existing   derivative
instruments,  the impact of adopting  Statement 133 on its financial  statements
will not be  material.  The Company has not  determined  the timing or method of
adoption.



Forward-Looking Statements

        The discussion in this Annual Report may include certain forward-looking
statements based on current management  expectations.  Factors which could cause
future results to differ from these expectations include the following:  general
economic conditions; legislative and regulatory initiatives; monetary and fiscal
policies of the federal  government;  deposit flows; the cost of funds;  general
market rates of interest;  interest rates on competing  investments;  demand for
loan products; demand for financial services;  changes in accounting policies or
guidelines;


                                       16
<PAGE>


and changes in the quality or composition of the Company's loan and
investment  portfolios.  Additional factors are described in the Company's other
reports filed with the Securities and Exchange Commission.

Disclosures Involving Year 2000 Issues

        Issues  related to the  century  date  change and the impact on computer
systems and business operations are receiving prominent publicity and attention.
Depositors,   business   partners,   investors,   and  the  general  public  are
specifically  interested  in the  effect  on the  financial  condition  of  each
depository  institution.  The FDIC has advised state savings banks that safe and
sound banking practices require them to address Year 2000 issues. The Securities
and Exchange  Commission  (SEC) issued a revised  Staff Legal  Bulletin NO. 5 to
provide  specific  guidance on disclosure  associated with Year 2000 obligations
for companies registered under federal securities laws.

        Computer programs generally abbreviated dates by eliminating the century
digits of the year.  Many  resources,  such as software;  hardware;  telephones;
voicemail;  heating; ventilating and air conditioning;  alarms, etc. ("Systems")
are  affected.  These Systems were designed to assume a century value of "19" to
save memory and disk space within their programs. In addition,  many Systems use
a value of "99" in a year or  "99/99/99"  in a date to indicate "no date"or "any
date" or even a  default  expiration  date.  As the year 2000  approaches,  this
abbreviated date mechanism  within Systems  threatens to disrupt the function of
computer  software at nearly every  business  which  relies  heavily on computer
systems for account and other recordkeeping  functions.  If the millennium issue
is ignored,  system failures or miscalculations could occur, causing disruptions
of operations and a temporary inability to process business transactions.


        The Bank has an  inventory  of  personal  computers  that  access a data
processing system provided by EDS in Des Moines, Iowa. If the personal computers
and data  processing  systems fail to process the century  date  change,  it may
impair the Bank's ability to process loan payments, accept deposits, and address
other operational  issues. The Bank's customers,  suppliers,  other constituents
may also be impaired to meet their  contractual  obligations  with the Bank. The
Bank has  developed a Year 2000 Plan (the  "Plan").  The Bank's Plan attempts to
identify the systems,  assess the risk, and conduct  inventories as necessary to
assure  compliance  with the Plan. The Plan calls for identifying all systems in
need of  remediation  by June 30,  1999,  and  remedying  all systems in need of
remediation  by September 30, 1999. As of March 31, 1999,  the Bank estimates it
will have to purchase  hardware and equipment in the amount of $17,000 (pre-tax)
to address the Y2K issues.  The  expenditures  would be amortized  over a 5-year
period, and would add approximately  $3,400 in furniture and fixture expense per
year for the next 5 years.  In  addition,  the Bank  paid in the  quarter  ended
December  31,  1998,  a one-time  fee of $20,000 by EDS to support  the  FFIEC's
testing  guidance  regarding  Year 2000  efforts of  financial  institutions  as
outlined in the April 10, 1998,  Interagency  Statement.  These  amounts are not
considered to be material.

        On February 24, 1998,  the FDIC  conducted an on-site  visitation of the
Bank's Year 2000 process.  The examiner followed  guidelines and recommendations
contained in the FFIEC  Interagency  Statement  on Year 2000 Project  Management
Awareness,  dated May 5, 1997,  and subsequent  publications.  In a letter dated
March  17,  1998,  the FDIC  stated  that the  Bank's  Year  2000  Committee  is
adequately monitoring Year 2000 compliance. In a letter dated September 8, 1998,
The FDIC  reported to the Board of  Directors  that the Federal  Reserve Bank of
Dallas had  conducted an  examination  of Electronic  Data  Systems,  Inc.,(EDS)
Plano,  Texas,  the Bank's data processor.  The Board of Directors  reviewed the
Exam at its  September  18,  1998,  meeting  and the  record of this  action was
entered  into the  minutes.  The  results  of the  examination  are deemed to be
confidential by the FDIC. On October 9, 1998, the Bank received an extensive Y2k
Contingency  Plan from EDS. On February 4, 1999,  the FDIC  conducted an on-site
Year 2000 readiness  examination.  Again,  the FDIC mandates that the results of
that  examination  be held  confidential.  In a letter dated April 30, 1999, EDS
reported that the overall product line remediation was now 100% complete.


Asset/Liability Management

        The Company's  profitability,  like that of most financial institutions,
depends to a large extent upon its net interest income,  which is the difference
between  interest  earned  on   interest-earning   assets,  such  as  loans  and
investments, and interest paid on interest-bearing liabilities, such as deposits
and  borrowings.  Net interest  income is  significantly  affected by changes in
market interest rates.  During periods of rising interest rates,  the Company is
required to pay higher rates to attract  deposits.  That can result in a decline
in net  interest  income if the Company is



                                       17
<PAGE>


unable to  increase  the yield on its interest-earning  assets sufficiently to
compensate for the increase in its cost of funds.  Conversely,  during periods
of declining  interest rates, the Company may  experience  prepayments  of its
fixed  rate  earning  assets  and  downward adjustments on its adjustable rate
assets.  That can result in a decrease in net interest income if the Company is
unable to lower its cost of funds sufficiently to compensate for the decrease
in its asset yields.

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

        In  an  attempt  to  manage  vulnerability  to  interest  rate  changes,
management  closely  monitors the Company's  interest rate risk. The Company has
established  an  investment  strategy  through  its  Asset/Liability  Committee.
Management  continually  reviews  the  Company's  interest  rate risk  position,
maturing  securities  and  borrowings,  interest  rates and programs for raising
deposits and originating  loans, and develops  policies  regarding these issues.
The  Board  of  Directors  reviews  quarterly  asset/liability   management  and
investment strategy reports prepared by management.


        The  Company  utilizes  basic  strategies  in  managing  its  assets and
liabilities  by managing or  maximizing  the net interest  income under  various
interest rate scenarios. More complex techniques such as hedging through the use
of options,  financial  futures,  and interest rate swaps are not  utilized.  In
addition to  monitoring  interest  rate risk on a continual  basis,  the Company
reviews  deposit  rates  weekly.  The  emphasis  has been on prudent  pricing as
opposed to  increasing  market  share,  and the  Company  has  supplemented  and
substituted  deposits using  FHLB-Chicago  advances in past periods when advance
rates are more attractive than those obtainable on retail deposits.

        Generally,  the Company utilizes the following  strategies to manage its
interest rate risk:  (i) the Company sells  substantially  all of its fixed rate
loans  originated;  (ii) the Company seeks to originate and retain ARM loans and
mortgage-backed  and related  securities  with short- to medium-term  periods to
re-pricing; (iii) the Company attempts to extend the maturities of deposits when
deemed cost  effective  through the pricing and  promotion  of  certificates  of
deposit with longer terms, and periodically  utilizes deposit marketing programs
offering maturity and repricing terms structured to complement the repricing and
maturity  characteristics  of the  existing  asset/liability  mix;  and (iv) the
Company  utilizes  longer-term  borrowings  from the  FHLB-Chicago to manage its
assets  and   liabilities   and   enhance   earnings.   One  of  the   Company's
asset/liability  management  techniques involves borrowing from the FHLB-Chicago
and utilizing  proceeds thereof to invest in assets that mature at the same time
or close to the same  time as the  advances  are due.  This use of  FHLB-Chicago
advances is part of the overall  interest rate risk  management  strategy of the
company. At March 31, 1999, FHLB-Chicago advances were $17.0 million or 17.4% of
total  assets,  compared to $19.1 million or 19.3 % of total assets at March 31,
1997.

        Originating   ARM  rate   loans   and   investing   in   adjustable-rate
mortgage-backed  and related security has enabled the Company to reduce interest
rate risk by more closely  matching the terms and repricing  characteristics  of
its assets and liabilities.  In addition,  because of the relative  liquidity of
mortgage-backed  and  related  securities,   the  Company  can  restructure  its
interest-earning  asset  portfolios  more quickly and  effectively in a changing
interest rate environment.  The Company's ARM loans and ARM  mortgage-backed and
related  securities  typically have annual and lifetime  interest rate caps that
reduce their ability to protect the Company  against a prolonged and significant
increase in interest rates. Further,  mortgage-backed and related securities are
subject to reinvestment risk. For example, during periods of decreasing interest
rates, mortgage-backed and related securities are more likely to prepay, and the
Company may not be able to reinvest the proceeds from  prepayments in securities
or other assets with yields  similar to those of the  prepaying  mortgage-backed
and related securities. However, mortgage-backed and related securities also are
subject to extension risk, which is the risk that the effective  maturity of the
security may increase in a rising interest rate environment. The market value of
a security  with a longer  maturity  typically  is more

                                       18
<PAGE>


sensitive to changes in market rates of interest,  and rising  interest rates
may have a more pronounced adverse  effect on the market value of
mortgage-backed  and related  securities than on other types of investment
securities.

        At March 31, 1999, total  interest-bearing  liabilities repricing within
one year exceeded total interest-bearing  assets repricing in the same period by
$4.4million,   representing  a  negative   cumulative   one-year  interest  rate
sensitivity  gap  equal to  4.48% of total  assets.  During  periods  of  rising
interest  rates,  a  positive  interest  rate  sensitivity  gap  would  tend  to
positively affect net interest income while a negative interest rate sensitivity
gap would tend to negatively  affect net interest  income.  Notwithstanding  the
negative  effect on net  interest  income  anticipated  as a result  of  falling
interest  rates due to the Company's  one-year gap  position,  the Company could
experience  substantial  prepayments  of its fixed rate  mortgage  loans  during
periods of falling  interest rates.  That may result in the reinvestment of such
proceeds at market rates that are lower than current rates.



                                       19
<PAGE>




        The  following  table  sets  forth at March  31,  1999  the  amounts  of
interest-earning  assets and interest-bearing  liabilities maturing or repricing
within the time periods indicated,  based on the information and assumptions set
forth in the notes thereto.

<TABLE>

                                                                Amount Maturing or Repricing as of March 31, 1999
                                              -------------------------------------------------------------------------------------
                                                                              More Than       More Than
                                              Within          Four to         One Year       Three years
                                              Three            Twelve         to Three         to Five        Over five
                                              Months           Months           Years           Years            Years       Total

<CAPTION>
<S>                                       <C>              <C>              <C>               <C>              <C>        <C>
                                                                           (Dollars in thousands)
Interest-earning assets(1)
Mortgage loans:
    Fixed rate                                 $159             $489           $1,726           $1,762           $2,716     $6,852
    Adjustable rate                           9,694           21,408           22,755            2,036                0     55,893
Consumer loans                                  635              488            2,509            3,277              200      7,109
Commercial loans                              1,442            1,118              419               52              868      3,899
Mortgage-backed securities:
    Fixed rate                                    -                -                -                -            5,587      5,587
    Adjustable rate                             285              165                -                -                -        450
Interest bearing deposits                     5,721                -                -                -                -      5,721
Investment securities                             -                -                -            3,398              850      4,248
                                             -------         --------         --------          -------         --------    -------
    Total interest-earning assets           $17,936          $23,668          $27,409          $10,525          $10,221    $89,759
                                            ========         ========         ========         ========         ========   ========
Interest-bearing liabilities:
Deposits(2):
    Certificates of deposit                   9,486           19,001            8,878            1,137              146     38,648
    Money  market                               686            2,057            1,645            1,950              518      6,856
    NOW accounts                                994            2,980            2,385            2,826              751      9,936
    Passbook savings                            591            2,034            1,575            1,867              496      6,563
Borrowings(3)                                 5,584            2,562            2,346            7,000            5,121     22,613
                                             -------          -------         --------         --------         --------   --------
     Total interest-bearing liabilities     $17,341          $28,634          $16,829          $14,780           $7,032    $84,616
                                            ========         ========         ========         ========         ========   ========
Excess (deficiency) of interest-earning
  assets over interest-bearing liabilities     $595          $(4,966)         $10,580          $(4,255)          $3,189     $5,143
                                            ========         ========         ========         ========         ========   ========
Cumulative excess (deficiency) of interest-
  earning assets over interest-bearing
  liabilities                                  $595          $(4,371)          $6,209           $1,954           $5,143     $5,143
                                            ========         ========         ========         ========         ========   ========
Cumulative excess (deficiency) of interest-
  earning assets over interest-bearing
  liabilities as a percent of total assets     0.61%           -4.48%            6.36%            2.00%            5.27%      5.27%
                                            ========         ========         ========         ========          =======   ========

<FN>

        (1)  Adjustable  and floating  rate assets are included in the period in
     which interest rates are next scheduled to adjust rather than in the period
     in which they are due, and fixed rate assets are included in the periods in
     which they are scheduled to be repaid based on scheduled amortization.
        (2)  Although  the  Company's  negotiable  order of  withdrawal  ("NOW")
     accounts and passbook savings  accounts  generally are subject to immediate
     withdrawal,  management  considers  a  certain  historical  amount  of such
     accounts to be core  deposits.  These  deposits have  significantly  longer
     effective  maturities  and  times  to  repricing  based  on  the  Company's
     historical   retention  of  such   deposits  in  changing   interest   rate
     environments. Money market, NOW accounts, and passbook savings accounts are
     assumed to be withdrawn at annual rates of 40%, 40% and 79%,  respectively,
     of the  declining  balance of such accounts  during the period  shown.  The
     withdrawal  rates used are higher than the Company's  historical  rates but
     are considered by management to be more  indicative of expected  withdrawal
     rates  currently.  Much of the recent growth in these  deposit  accounts is
     assumed to be the result of low  interest  rates and it is assumed that the
     accounts are more susceptible to withdrawal than in the past. If all of the
     Company's NOW accounts,  passbook savings accounts and money market deposit
     accounts had been assumed to be subject to repricing  within one year,  the
     one-year   cumulative   deficiency   of   interest-earning    assets   over
     interest-bearing  liabilities  would  have been  $13.4  million or 13.6% of
     total assets.
        (3) Adjustable  and floating rate  borrowings are included in the period
     in which their  interest  rates are next scheduled to adjust rather than in
     the period in which they are due.
</FN>
</TABLE>



                                       20
<PAGE>




Certain  shortcomings  are  inherent in the method of analysis  presented in the
foregoing table.  For example,  although certain assets and liabilities may have
similar maturities or periods to repricing,  they may react in different degrees
to changes in market  interest  rates.  The interest  rates on certain  types of
assets and  liabilities  may fluctuate in advance of changes in market  interest
rates,  while  interest  rates on other  types may lag behind  changes in market
rates.  Additionally,  certain assets, such as ARM loans and mortgage-backed and
related  securities,  have features that restrict changes in interest rates on a
short-term basis and over the life of the asset. In addition,  the proportion of
ARM loans and mortgage-backed and related securities in the Company's portfolios
could decrease in future periods if market  interest rates remain at or decrease
below  current  levels due to  refinance  activity.  Further,  in the event of a
change in interest rates,  prepayment and early  withdrawal  levels would likely
deviate  significantly from those assumed in the table.  Finally, the ability of
many borrowers to service their  adjustable  rate debt may decrease in the event
of an interest rate increase.

Average Balance Sheet

      The  following  table  sets  forth  certain  information  relating  to the
Company's consolidated average balance sheets and the consolidated statements of
operations  at and for the fiscal years ended March 31, 1999,  1998 and 1997. It
reflects  the average  yields on  interest-earning  assets and average  rates on
interest-bearing  liabilities  for the  periods  indicated.  Dividing  income or
expense  derives  yields and rates by the  average  balance of  interest-earning
assets or  interest-bearing  liabilities,  respectively,  for the periods shown.
Average  balances  are derived  principally  from average  monthly  balances and
include non-accruing loans. Interest income on non-accrual loans is reflected in
the period it is collected and not in the period it is earned.  Such amounts are
not material to net interest  income or net change in net interest income in any
period.  Non-accruing loans are included in the average balances and do not have
a material effect on the average yield.



                                       21
<PAGE>



<TABLE>


MANAGEMENT' S DISCUSSION(CONT.)
                                                                          Fiscal Years Ended March 31,
                                            ---------------------------------------------------------------------------------------
                                            ---------------------------------------------------------------------------------------
                                                         1999                         1998                         1997
                                            ---------------------------------------------------------------------------------------
<CAPTION>

                                             Average   Interest  Average  Average   Interest  Average  Average   Interest  Average
                                            Outstanding Earned/  Yield/  Outstanding Earned/  Yield/  Outstanding Earned/   Yield/
                                             Balance     Paid     Rate    Balance     Paid     Rate    Balance     Paid     Rate
<S>                                        <C>        <C>       <C>     <C>        <C>       <C>     <C>        <C>       <C>

Assets
Interest-earning assets:
 Mortgage loans                              $66,333    $5,837    8.80%   $67,052    $5,849    8.72%   $64,208    $5,554    8.65%
 Commercial loans                              4,331       370    8.54      4,754       371    7.80      4,539       417    9.19
 Consumer loans                                7,677       751    9.78      7,665       749    9.77      7,493       731    9.76
                                             --------   -------  ------   --------   -------  ------   --------   -------  ------
   Total loans                                78,341     6,957    8.88     79,471     6,969    8.77%    76,240     6,702    8.79%
 Mortgage-backed securities                    6,164       430    6.98      6,938       494    7.12      7,603       556    7.31
 Interest bearing deposits in other
     financial institutions                    3,058       153    5.02      1,377        76    5.52        461        23    5.06
 Investment securities                         2,950       180    6.10      2,665       156    5.87      2,938       157    5.33
 Federal Home Loan Bank stock                    937        61    6.51        996        68    6.77        837        54    6.46
                                            ---------   -------  ------   --------   -------  ------   --------   -------  ------
  Total interest-earning assets               91,450     7,781    8.51%    91,448    $7,763    8.49%    88,079    $7,492    8.51%
 Non-interest earning assets                   6,765                        5,681                        4,976
                                            ---------                     --------                     --------
   Total assets                              $98,215                      $97,128                      $93,055
                                            =========                     ========                     ========
Liabilities and retained earnings:
 Deposits:
  NOW accounts(1)                             10,592       140    1.32%     9,491       138    1.45%    $8,934      $149    1.66%
  Money market deposit accounts                6,823       313    4.59      5,552       260    4.68      4,109       194    4.72
   Passbook                                    6,252       134    2.15      6,013       129    2.15      6,440       147    2.28
   Certificates of deposit                    38,922     2,222    5.71     41,194     2,366    5.74     41,314     2,395    5.80
                                            ---------   -------  ------   --------   -------  ------   --------   -------  ------
     Total deposits                           62,589     2,809    4.49     62,250     2,893    4.65     60,797     2,884    4.74
  Advances and other borrowings               23,084     1,243    5.38     22,849     1,350    5.91     20,559     1,188    5.78
                                            ---------   -------  ------   --------   -------  ------   --------   -------  ------
   Total interest-bearing liabilities         85,673     4,052    4.73%    85,099     4,243    4.99%    81,356     4,072    5.00%
  Non-interest bearing liabilities               615                          655                          202
 Equity                                       11,927                       11,374                       11,497
                                            ---------                     --------                     --------
  Total liabilities and retained earnings    $98,215                      $97,128                      $93,055
                                            =========                     ========                     ========
Net interest income/interest rate spread(2)             $3,729    3.50%              $3,520    3.50%              $3,420    3.51%
                                                        =======  ======              =======  ======              =======  ======
Net earning assets/net interest margin(3)     $5,777              4.08%    $6,348              3.85%    $6,723              3.88%
                                            =========            ======   ========            ======    =======            =======
Average interest-earning assets to
  average interest-bearing liabilities          1.07                         1.07                         1.08
                                            =========                     ========                      =======
<FN>
________________________
(1)  Includes non-interest bearing NOW accounts.

(2)  Interest rate spread represents the difference between the average yield
     on interest-earning assets and the average rate on interest-bearing
     liabilities.

(3)  Net interest margin represents net interest income divided by average
     interest-earning assets.
</FN>
</TABLE>




                                       22
<PAGE>



Rate/Volume Analysis

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


                                        Fiscal Year Ended March 31, 1999                    Fiscal Year Ended March 31, 1998
                                                  Compared to                                         Compared to
                                        Fiscal Year Ended March 31, 1998                    Fiscal Year Ended March 31, 1997
                                               Increase(Decrease)                                 Increase(Decrease)
                                                     Due to                                             Due to
                                        ---------------------------------                   --------------------------------
                                        ---------------------------------                   --------------------------------
                                          Rate     Volume      Total                           Rate      Volume     Total
                                        ---------------------------------                   --------------------------------
<CAPTION>

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

Interest-earning assets:
    Loans                                  $87       (99)      $(12)                          $(15)        282      $267
    Mortgage-backed  securities            (10)      (54)       (64)                           (14)        (48)      (62)
    Deposits                                (7)       84         77                              2          51        53
    Securities                               6        18         24                             16         (17)       (1)
    FHLB stock                              (3)       (4)        (7)                             3          11        14
                                          -----     -----      ------                         ------      -----     -----
       Total                                73       (55)        18                             (8)        279       271
                                          -----     -----      ------                         ------      -----     -----
Interest-bearing liabilities:
    Deposits                              (100)       16        (84)                           (57)         66         9
    Borrowings                            (121)       14       (107)                            27         135       162
                                          -----     -----      ------                         ------      -----     -----
      Total                               (221)       30       (191)                           (30)        201       171
                                          ------    -----      ------                         ------      -----     -----
       Net change in net interest income  $294      $(85)      $209                            $22         $78      $100
                                          ======    =====      ======                         ======      =====     =====

</TABLE>





                                       23
<PAGE>



                          INDEPENDENT AUDITORS' REPORT


Board of
Directors
Northwest Equity Corp.


We have audited the accompanying consolidated balance sheets of Northwest Equity
Corp. and Subsidiary as of March 31, 1999 and 1998, and the related consolidated
statements of  operations,  stockholders'  equity and cash flows for each of the
three years in the period ended March 31, 1999.  These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Northwest  Equity  Corp.  and  Subsidiary  at March 31,  1999 and 1998,  and the
consolidated  results of their  operations  and their cash flows for each of the
three  years  ended  March  31,  1999  in  conformity  with  generally  accepted
accounting principles.




                                           __/s/Wipfli Ullrich Bertelson LlP__
                                           Wipfli Ullrich Bertelson LLP

Wisconsin Rapids, Wisconsin
April 30,
1999


                                       24
<PAGE>

<TABLE>

                                         NORTHWEST EQUITY CORP. AND SUBSIDIARY
                                              CONSOLIDATED BALANCE SHEETS
                                                March 31, 1999 and 1998
                                                    (In Thousands)

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

                                                        ASSETS
<CAPTION>

                                                                                              1999               1998
                                                                                          -------------      -------------
<S>                                                                                       <C>                <C>

Cash and due from banks                                                                     $4,749             $2,642
Interest-bearing deposits with financial institutions                                        5,721              3,405
Securities held to maturity                                                                  9,435              9,398
Investment in Federal Home Loan Bank stock                                                     850              1,159
Loans held for sale                                                                            143                142
Loans receivable - net of allowance for loan losses of
      $375 and $484 in 1999 and 1998, respectively                                          73,347             78,297
Foreclosed properties and properties subject to foreclosure                                     63                159
Accrued interest receivable                                                                    556                578
Premises and equipment                                                                       2,176              2,250
Prepaid expenses and other assets                                                              545                709
                                                                                          ---------          ---------
TOTAL ASSETS                                                                               $97,585            $98,739
                                                                                          =========          =========

                                         LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                              1999               1998
                                                                                          -------------      -------------
Liabilities:
      Deposits:
          Demand and NOW deposits                                                           $9,936             $9,733
          Savings and money market deposits                                                 13,419             12,117
          Certificates of deposit                                                           38,648             40,428
                                                                                          ----------         ---------
             Total deposits                                                                 62,003             62,278
      Advances from Federal Home Loan Bank                                                  16,990             19,062
      Borrowed funds                                                                         5,625              5,258
      Accounts payable and accrued expenses                                                    606                627
                                                                                          ---------          ---------
                 Total liabilities                                                          85,224             87,225
                                                                                          ---------          ---------

Stockholders' equity:
      Preferred stock - $1 par value; 2,000,000 shares
          authorized; none issued                                                              - -                - -
      Common stock - $1 par value; 4,000,000 shares authorized;
          1,032,517 shares issued; 825,301 shares outstanding at March 31, 1999
          and 824,654 shares outstanding at March 31, 1998                                   1,033              1,033
      Additional paid-in capital                                                             6,582              6,584
      Less unearned restricted stock plan award                                                - -                (26)
      Less unearned Employee Stock Ownership Plan                                             (155)              (389)
      Less treasury stock - at cost                                                         (2,549)            (2,557)
      Retained earnings - substantially restricted                                           7,450              6,869
                                                                                          ---------          ---------
                 Total stockholders' equity                                                 12,361             11,514
                                                                                          ---------          ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                 $97,585            $98,739
                                                                                          =========          =========

See accompanying Notes to Consolidated Financial Statements
</TABLE>



                                       25
<PAGE>

<TABLE>


                                         NORTHWEST EQUITY CORP. AND SUBSIDIARY
                                         CONSOLIDATED STATEMENTS OF OPERATIONS
                                       Years Ended March 31, 1999, 1998 and 1997
                                      (In Thousands except for per share amounts)

-----------------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                               1999              1998               1997
                                                                           -------------     -------------      -------------
<S>                                                                         <C>               <C>                <C>

Interest income:
      Interest and fees on loans                                              $6,957            $6,969             $6,702
      Interest on mortgage-backed and related securities                         430               494                556
      Interest and dividends on investments                                      394               300                234
                                                                           -------------     -------------      -------------
          Total interest income                                                7,781             7,763              7,492
                                                                           -------------     -------------      -------------

Interest expense:
      Interest on deposits                                                     2,809             2,893              2,884
      Interest on borrowings                                                   1,243             1,350              1,188
                                                                           -------------     -------------      -------------
          Total interest expense                                               4,052             4,243              4,072
                                                                           -------------     -------------      -------------
                 Net interest income                                           3,729             3,520              3,420
Provision for loan losses                                                        376               100                 81
                                                                           -------------     -------------      -------------

Net interest income after provision for loan losses                            3,353             3,420              3,339
                                                                           -------------      -------------     -------------

Noninterest income (deductions):
      Mortgage servicing fees                                                     94                77                 77
      Service charges on deposits                                                252               251                220
      Loss on sale of investments                                                - -               (24)               - -
      Gain on sale of mortgage loans                                             206               130                 59
      Other                                                                      184               174                175
                                                                           -------------      -------------     -------------
          Total noninterest income                                               736               608                531
                                                                           -------------      -------------     -------------

General and administrative expenses:
      Salaries and employee benefits                                           1,311             1,193              1,183
      Net occupancy expense                                                      365               350                336
      Data processing                                                            168               135                131
      Federal insurance premiums                                                  38                39                428
      Other                                                                      583               581                565
                                                                           -------------      -------------     -------------
          Total general and administrative expense                             2,465             2,298              2,643
                                                                           -------------      -------------     -------------

Income before provision for income taxes                                       1,624             1,730              1,227

          Provision for income taxes                                             491               610                517
                                                                           -------------      -------------     -------------


Net income                                                                    $1,133            $1,120               $710
                                                                           =============      =============     =============

      Basic earnings per share                                                 $1.45             $1.44              $0.84
                                                                           =============      =============     =============

      Diluted earnings per share                                               $1.37             $1.37              $0.83
                                                                           =============      =============     =============

See accompanying Notes to Consolidated Financial Statements

</TABLE>


                                       26
<PAGE>

<TABLE>


                                                              NORTHWEST EQUITY CORP. AND SUBSIDIARY
                                                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                                             Years Ended March 31, 1999, 1998 and 1997
                                                                          (In Thousands)
<CAPTION>

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

                                                                                     Unearned                    Accumulated
                                                              Additional  Unearned   ESOP                           Other
                                                       Common  Paid-In   Restricted Compen-  Treasury Retained  Comprehensive
                                                       Stock   Capital      Stock    sation   Stock    Earnings     Income   Total
                                                      -----------------------------------------------------------------------------
<S>                                                  <C>      <C>          <C>        <C>      <C>      <C>       <C>     <C>

Balance - March 31, 1996                               $1,033   $6,584      $(319)   $(699)   $(561)    $5,860      $(34)   $11,864
 Comprehensive income:
  Net income                                              - -      - -        - -      - -      - -        710       - -        710
  Other comprehensive income-unrealized
   gain on securities available for sale net of
   deferred taxes of $48                                  - -      - -        - -      - -      - -        - -         5          5

  Total comprehensive income                                                                                                    715
 Amortization of unearned ESOP and restriced stock
  award                                                   - -      - -        204      141      - -        - -       - -        345
 Purchase of treasury stock - 51,625 shares               - -      - -        - -      - -   (1,695)       - -       - -     (1,695)
 Cash dividends - $.33 per share                          - -      - -        - -      - -      - -       (370)      - -       (370)
                                                      --------  -------    -------   ------  -------    -------     ------  --------
Balance - March 31, 1997                                1,033    6,584       (115)    (558)  (2,256)     6,200       (29)    10,859
 Comprehensive income:
  Net income                                              - -      - -        - -      - -      - -      1,120       - -      1,120
  Other comprehensive income - unrealized
   gain on securities available for sale, net of
   deferred taxes of $2                                   - -      - -        - -      - -      - -        - -        29         29

   Total comprehensive income                                                                                                 1,149
 Amortization of unearned ESOP and restricted stock
  award                                                   - -      - -         89      169      - -        - -       - -        258
 Purchase of treasury stock - 142,138 shares              - -      - -        - -      - -     (301)       - -       - -       (301)
 Cash dividends - $.40 per share                          - -      - -        - -      - -      - -       (451)      - -       (451)
                                                      --------  -------    -------   ------  -------    -------    ------   --------
Balance - March 31, 1998                                1,033    6,584        (26)    (389)  (2,557)     6,869       - -     11,514

 Comprehensive income:
  Net income                                              - -      - -        - -      - -      - -      1,133       - -      1,133
 Amortization of unearned ESOP and restricted stock
  award                                                   - -      - -         26      234      - -        - -       - -        260
 Exercise of incentive stock options - 647 shares         - -       (2)       - -      - -        8        - -       - -          6
 Cash dividends - $.67 per share                          - -      - -        - -      - -      - -       (552)      - -       (552)
                                                      --------  -------    -------   ------  -------    -------    ------   --------
Balance - March 31, 1999                               $1,033   $6,582       $- -    $(155) $(2,549)    $7,450      $- -    $12,361
                                                      ========  =======    =======   ======  =======    =======    ======   ========

See accompanying Notes to Consolidated Financial Statements
</TABLE>


                                       27
<PAGE>

<TABLE>

                                                 NORTHWEST EQUITY CORP. AND SUBSIDIARY
                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                Years Ended March 31, 1999, 1998 and 1997
                                                             (In Thousands)

------------------------------------------------------------------------------------------------------------------------
<CAPTION>


                                                                               1999           1998           1997
                                                                           -------------  -------------  -------------
<S>                                                                         <C>            <C>             <C>

      Cash flows from operating activities:
          Net income                                                          $1,133         $1,120          $710
          Adjustments to reconcile net income to net cash
             provided by operating activities:
                 Provision for depreciation                                      143            145           152
                 Provision for loan losses                                       376            100            81
                 Loss on sale of investments                                     - -             24           - -
                 Provision for deferred income taxes                             109             68           (43)
                 Amortization of ESOP and restricted stock awards                260            258           345
                 Proceeds from sales of mortgage loans                        19,131         11,216         4,533
                 Loans originated for sale                                   (19,132)       (10,813)       (4,172)
                 Changes in operating assets and liabilities:
                     Accrued interest receivable                                  22             78           (54)
                     Prepaid expenses and other assets                           211           (329)          (80)
                     Accrued interest payable                                    (86)            83           (92)
                     Accrued income taxes payable                               (101)          (112)           97
                     Other accrued liabilities                                    10             53           256
                                                                           -------------  -------------  -------------

          Net cash provided by operating activities                            2,076          1,891         1,733
                                                                           -------------  -------------  -------------

Cash flows from investing activities:
      Net (increase) decrease in interest-bearing deposits with
          financial institutions                                              (2,316)        (1,684)          744
      Proceeds from sales of available for sale securities                       - -          2,776           - -
      Proceeds from sales of Federal Home Loan Bank stock                        309            - -           - -
      Proceeds from maturities of held to maturity securities                  1,699            - -           114
      Proceeds from sale of foreclosed property                                  350            - -           - -
      Purchase of held to maturity securities                                 (2,098)        (3,286)         (127)
      Purchase of mortgage backed securities                                  (2,601)           - -        (2,772)
      Principle collected on mortgage-backed securities                        2,963          1,023           724
      Net (increase) decrease in loans                                         4,320         (1,475)       (7,231)
      Purchase of office properties and equipment                                (69)           (54)         (294)
                                                                           -------------  -------------  -------------

          Net cash (used in) investing activities                              2,557         (2,700)       (8,842)
                                                                           =============  =============  =============


See accompanying Notes to Consolidated Financial Statements

</TABLE>



                                       28
<PAGE>

<TABLE>


                                         NORTHWEST EQUITY CORP. AND SUBSIDIARY
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                                       Years Ended March 31, 1999, 1998 and 1997
                                                    (In Thousands)

--------------------------------------------------------------------------------------------------------------------------
<CAPTION>


                                                                               1999             1998             1997
                                                                           -------------    -------------    -------------

<S>                                                                         <C>              <C>               <C>

Cash flows from financing activities:
      Net increase (decrease) in deposits                                      (275)             721             4,301
      Net increase (decrease) in short-term borrowings                       (1,853)             795            (1,543)
      Net increase in long-term borrowings                                      148            1,428             6,728
      Purchases of treasury stock                                               - -             (301)           (1,695)
      Proceeds from exercise of stock options                                     6              - -               - -
      Dividends paid                                                           (552)            (451)             (370)
                                                                           -------------    -------------    -------------

          Net cash provided by financing activities                          (2,526)           2,192             7,421
                                                                           -------------    -------------    -------------

Increase in cash and due from banks                                           2,107            1,383               312
      Cash and due from banks at beginning                                    2,642            1,259               947
                                                                           -------------    -------------    -------------

      Cash and due from banks at end                                         $4,749           $2,642            $1,259
                                                                           =============    =============    =============




Supplemental disclosures of cash flow information:

      Loans receivable transferred to foreclosed properties
          and properties subject to foreclosure                                $254            $159                $72

      Loans charged off                                                         500              87                 62

      Interest paid                                                           4,138           4,160              4,164

      Income taxes paid                                                         578             739                517



See accompanying Notes to Consolidated Financial Statements
</TABLE>


                                       29
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
Note 1.      Summary of Significant Accounting Policies:


The accounting policies of Northwest Equity Corp. and Subsidiary (the Company)
conform to generally accepted accounting principles and prevailing practices
within the banking industry.  A summary of the more significant accounting
policies follows:

Nature of Operations

Northwest Equity Corp. is the holding company for Northwest Savings Bank
(the "Bank"), a Wisconsin state-chartered savings bank.  The Company provides a
wide range of financial services to individual customers through the Bank with
Wisconsin locations in Polk, St. Croix and Burnett Counties. The Bank is subject
to the regulations of certain federal and state agencies and undergoes periodic
examinations by those regulatory authorities.  The Bank holds a variety of
securities through it's wholly owned Subsidiary, Northwest Investments, Inc.,
a Nevada investment corporation.

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and include the accounts of the Company
and its wholly- owned subsidiary, Northwest Savings Bank, and its wholly-owned
subsidiaries, Amery Service Agency, Inc. and  Northwest Investments, Inc.
Significant intercompany accounts and transactions have been eliminated.

Use of Estimates in Preparation of Financial Statements:

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

Cash and Cash Equivalents:

Cash and cash equivalents consist of cash and investments with initial
maturities of three months or less.  For the purpose of presentation in the
statements of cash flows, cash and cash equivalents are defined as those amounts
included in the statement of financial condition caption "cash and due from
banks."


                                       30
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1.      Summary of Significant Accounting Policies - Continued:

Securities:

Investment securities are assigned an appropriate classification at the time of
purchase in accordance with management's intent.  Securities held to maturity
represent those securities for which the Bank has the positive intent and
ability to hold to maturity.  Accordingly, these securities are carried at cost
adjusted for amortization of premium and accretion of discount calculated using
the effective yield method. Unrealized gains and losses on securities held to
maturity are not recognized in the financial statements.

Trading securities include those securities bought and held principally for the
purpose of selling them in the near future.  The Bank has no trading securities.

Securities not classified either as securities held to maturity or trading
securities are considered available for sale and reported at fair value
determined from estimates of brokers or other sources.  Unrealized gains and
losses are excluded from earnings but are reported as a separate component of
net worth, net of income tax effects.

Any gains and losses on sales of securities are recognized at the time of sale
using the specific identification method.

Loans Held for Sale:

Loans held for sale in the secondary market are recorded at lower of aggregate
cost or market and generally consist of current production of fixed-rate
mortgage loans.  Fees received from the borrower are deferred and recorded as an
adjustment of the sales price.  A gain or loss is recognized at the time of sale
reflecting the present value of the difference between the contractual interest
rate of the loans sold and the yield to the investor.

Loans Receivable:

Loans receivable are stated at unpaid principal balances, less the allowance for
loan losses, and net of deferred loan origination fees and discounts.

Interest income is recognized using methods which approximate a level yield on
principal amounts outstanding.  Accrual of interest is discontinued either when
reasonable doubt exists as to the full, timely collection of interest or
principal or when a loan becomes contractually past due by 90 days or more with
respect to interest or principal.  At that time, any accrued but uncollected
interest is reversed, and additional income is recorded only to the extent that
payments are received and the collection of principal is reasonably assured.


                                       31
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1.      Summary of Significant Accounting Policies - Continued:

Allowance for Loan Losses:

The allowance for credit losses is maintained at a level which management
believes is adequate to provide for possible credit losses.  Management
periodically evaluates the adequacy of the allowance using the Company's past
loan loss experience, known and inherent risks in the portfolio, composition
of the portfolio, current economic conditions, and other relevant factors.
This evaluation is inherently subjective since it requires material estimates
that may be susceptible to significant change.

Foreclosed Properties and Properties Subject to Foreclosure:

Real estate owned which was acquired by foreclosure or by deed in lieu of
foreclosure is initially recorded at the lower of cost or fair value less
estimated costs to sell at date of foreclosure. Costs related to the development
and improvement of property are capitalized, whereas costs related to holding
property are expensed. Valuations are periodically performed by management, and
an allowance for losses is established by a charge to operations if the
carrying value of a property exceeds its fair value less estimated costs to
sell.  Real estate in judgment and subject to redemption is carried at cost less
an allowance for estimated losses.

Loan Fees:

Certain loan origination fees, commitment fees and direct loan origination costs
are being deferred and the net amounts amortized as an adjustment of the related
loan's yield.  The Bank is amortizing these amounts into interest income, using
the level yield method, over the contractual life of the related loan.

The other origination and commitment fees not required to be recognized as a
yield adjustment are included in loan fees and service charges.

Premises and Equipment:

Premises and equipment are stated at cost.  Maintenance and repair costs are
charged to expense as incurred. Gains or losses on disposition of premises and
equipment are reflected in income.  Depreciation is computed on the
straight-line method and is based on the estimated useful lives of the assets
which range from three to thirty-five years.


                                       32
<PAGE>


                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1.      Summary of Significant Accounting Policies - Continued:

Income Taxes:

The Company and its subsidiary file a consolidated federal income tax return and
separate state income tax returns.  Financial statement provisions are made in
the income tax expense accounts for deferred taxes applicable to income and
expense items reported in different periods than for income tax purposes.  The
Company accounts for income taxes on the liability method.  Deferred income
tax assets and liabilities are adjusted regularly to amounts estimated to be
receivable or payable based on current tax law.

Advertising:

The Company expenses advertising costs as incurred.

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income.
Other comprehensive income includes unrealized gains and losses on securitites
available for sale which are recognized as a seperate component of equity,
accumulated other comprehensive income.


Change In Accounting Principles:

In February 1997, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards (SFAS) No. 128, which became
effective for the Company for reporting periods ending after December 15, 1998.
Under the provisions of SFAS No. 128, primary and fully-diluted earnings per
share were replaced with basic and diluted earnings per share in an effort to
simplify the computation of these measures and align them more closely with the
methodology used internationally. Basic earnings per share is arrived at by
dividing net income available to common stockholders by the weighted-average
number of common shares outstanding and does not include the impact of any
potentially dilutive common stock equivalents. The diluted earnings per share
calculation method is arrived at by dividing net income by the weighted-average
number of shares outstanding, adjusted for the dilutive effect of outstanding
stock options. For purposes of comparability, all prior-period earnings per
share data have been restated.


                                       33
<PAGE>


Note 1.   Summary of Significant Accounting Policies - Continued:

Change In Accounting Principles - Continued:

In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income."  This statement establishes standards for reporting and display of
comprehensive income in a full set of general-purpose financial statements.
This statement requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. This statement requires that an enterprise display an
amount representing total comprehensive income for the period in a financial
statement, but does not require a specific format for that financial statement.
This statement also requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of the
consolidated balance sheet. The statement is effective for fiscal years
beginning after December 15, 1997. Reclassification of consolidated financial
statements for earlier periods provided for comparative purposes is required.
The adoption of SFAS No. 130 did not have an impact on the Company's financial
position or results of operations.


In June 1998, the FASB issued SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information." This statement establishes standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to stockholders. This statement supersedes SFAS No. 14, Financial
Reporting for Segments of a Business Enterprise," but retains the requirement to
report information about major customers. It also amends SFAS No. 94,
"Consolidation of All Majority-Owned Subsidiaries," to remove the special
disclosure requirements for previously unconsolidated subsidiaries. The
statement is effective for fiscal years beginning after December 15, 1998. In
the initial year of application, comparative information for earlier years is to
be restated. The adoption of SFAS No. 131 did not have an impact on the
Company's financial position or results of operations.


Reclassifications:

Certain amounts in the 1998 and 1997 consolidated financial statements have been
reclassified to conform to the 1999 reporting classification.


                                       34
<PAGE>





                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 2.      Securities Held to Maturity:


Securities held to maturity consist of the following at March 31:
<TABLE>


                                                                              Gross          Gross
                                                             Amortized      Unrealized     Unrealized        Fair
                                                                Cost          Gains          Losses         Value
                                                            -------------  -------------  -------------  -------------
<CAPTION>

                                                                                  (In Thousands)
                            1999
                 ----------------------------
<S>                                                          <C>              <C>           <C>          <C>

                 U.S. Treasury and agency obligations          $3,398           $3            $15          $3,386
                                                              --------         ----          -----        --------
                 Mortgage backed securities:
                     FNMA certificates                          3,189           35            - -           3,224
                     GNMA certificates                          1,634           64            - -           1,698
                     FHLMC certificates                         1,214            6             12           1,208
                                                              --------         ----          -----        --------

                 Total mortgage backed securities               6,037          105             12           6,130
                                                              --------         ----          -----        --------

                     Total securities held to maturity         $9,435         $108            $27          $9,516
                                                              ========         ====          =====        ========


                            1998
                 ----------------------------

                 U.S. Treasury and agency obligations          $3,000         $- -             $1          $2,999
                                                              --------        -----          ------       --------
                 Mortgage backed securities:
                     FNMA certificates                          3,868           59              1           3,926
                     GNMA certificates                          2,153           83            - -           2,236
                     FHLMC certificates                           377            7            - -             384
                                                              --------        -----          ------       --------

                 Total mortgage backed securities               6,398          149              1           6,546
                                                              --------        -----          ------       --------

                     Total securities held to maturity         $9,398         $149             $2          $9,545
                                                              ========        =====          ======       ========
</TABLE>

There were no sales of securities held to maturity during the years ended March
31, 1999 and 1998.

Investment securities with an amortized cost of $4,898,000 and estimated fair
value of $4,959,000 were pledged to secure other borrowing as of March 31, 1999

During the year ended March 31, 1998, the Company sold securities available for
sale for total proceeds of $2,776,000 resulting in realized gains of $2,000 and
realized losses of $26,000. There were no sales of securities available for sale
during the years ended March 31, 1999.



                                       35
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 2.      Securities Held to Maturity - Continued:

The amortized cost and estimated fair value of securities held to maturity at
March 31, 1999 by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

                                                     Amortized        Fair
                                                       Cost           Value
                                                    ------------   -----------
 Investment securities:
   Due in one year or less                            $1,100         $1,103
   Due after one year through five years               2,298          2,283
                                                    ------------   -----------

    Total investment securities                        3,398          3,386

  Mortgage backed securities                           6,037          6,130
                                                    ------------   -----------

    Totals                                            $9,435         $9,516
                                                    ============   ===========

Note 3.      Investment in Federal Home Loan Bank Stock:

As a member of the Federal Home Loan Bank (FHLB) system, the Bank is required to
hold stock in the FHLB based on asset size. The stock is recorded at cost which
approximates fair value. Transfer of the stock is substantially restricted.

Note 4.      Loans Receivable:

Loans receivable are summarized as follows as of March 31:

                                                       1999           1998
                                                   -------------  -------------
   Real estate mortgage loans:                            (In Thousands)
    One to four families                              $54,049        $57,975
    Other                                               8,665          8,582
    Commercial loans                                    3,899          4,397
    Consumer loans                                      7,109          7,827
                                                   -------------  -------------
      Totals                                           73,722         78,781
    Less: Allowance for losses                           (375)          (484)
                                                   -------------  -------------
      Total loans receivable                          $73,347        $78,297
                                                   =============  =============

The following is an analysis of the allowance for loan losses for the years
ended March 31:

                                            1999           1998          1997
                                           -------        ------        -------
                                                      (In Thousands)
Balance at beginning                       $484           $461           $433
 Provision charged to income                376            100             81
 Loans charged off - Net of recoveries     (485)           (77)           (53)
                                           -----         ------          -----
Balance at end                             $375           $484           $461
                                           ======        ======          =====



                                       36
<PAGE>




                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 4.      Loans Receivable - Continued:

Loans serviced for others are not included in the above amounts. They totaled
$46,290,000, $30,691,000 and $25,250,000 at March 31, 1999, 1998 and 1997,
respectively.

The allowance for loan losses includes specific allowances related to loans
which have been judged to be impaired and which fall within the scope of SFAS
No. 114. A loan is impaired when, based on current information, it is probable
that the Bank will not collect all amounts due in accordance with the
contractual terms of the loan agreement. These specific allowances are based on
discounted cash flows of expected future payments using the loan's initial
effective interest rate or the fair value of the collateral if the loan is
collateral dependent.

There were no loans considered impaired as of March 31, 1999. Impaired loans at
March 31, 1998 consisted of:

  Impaired loans - nonaccrual                  $685,000
  Less - allowance for credit losses             90,000
                                             -------------
   Net investment in impaired loans            $595,000
                                             =============

The average recorded investment in impaired loans during 1999 and 1998 was
$397,000 and $595,000, respectively.  There was no interest income recognized
on the impaired loans during the years ended March 31, 1999, 1998 and 1997.

The Bank, in the ordinary course of business, grants loans to the Company's
executive officers and directors, including their families at terms comparable
to transactions with other customers. In the opinion of management, such loans
do not involve more than the normal risk of collectibility or present other
unfavorable features.

Activity in related party loans during the years ended March 31, 1999 and 1998
is summarized below:

                                                     1999             1998
                                                 ------------    -------------
 Loans outstanding at beginning                    $39,485          $132,915
   New loans                                        99,000               - -
   Repayments                                      (28,583)          (93,430)
                                                -------------    -------------
 Loans outstanding at end                         $109,902           $39,485
                                                =============    =============




                                       37
<PAGE>




                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 5.      Premises and Equipment:

Premises and equipment are summarized by major classification as follows at
March 31:

                                                      1999           1998
                                                  -------------  -------------
                                                         (In Thousands)
Land and improvements                                 $569           $569
Buildings and improvements                           1,543          1,543
Furniture, fixtures and equipment                    1,090          1,043
                                                  -------------  -------------
  Total                                              3,202          3,155
Less - Accumulated depreciation                      1,026            905
                                                  -------------  -------------
                                                    $2,176         $2,250
                                                  =============  =============

Depreciation charged to operations totaled $143,000, $145,000 and $152,000 for
the years ended March 31, 1999, 1998 and 1997, respectively.

Note 6.      Foreclosed Properties and Properties Subject to Foreclosure:

Properties subject to foreclosure were $63,000 and $159,000 at March 31, 1999
and 1998, respectively. There were no foreclosed properties at March 31, 1999
and 1998.

Note 7.      Accrued Interest Receivable:

Accrued interest receivable is comprised of the following at March 31:

                                                      1999           1998
                                                  -------------  -------------
                                                         (In Thousands)
Loans receivable                                      $456           $493
Mortgage backed obligations                             34             39
Investments                                             66             46
                                                  -------------  -------------
 Totals                                               $556           $578
                                                  =============  =============

The Bank has provided an allowance for uncollected interest on loans at March
31, 1999 and 1998 of $6,000 and $17,000, respectively.


                                       38
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 8.      Savings Accounts:

Savings accounts are summarized as follows at March 31:

<TABLE>

                                                             1999                              1998
                                                  ----------------------------      ----------------------------
                                                                  Weighted                          Weighted
                                                                   Average                           Average
                                                     Amount          Rate              Amount          Rate
                                                  -------------  -------------      -------------  -------------
                                                                          (In Thousands)
<CAPTION>
<S>                                                <C>             <C>               <C>            <C>

Noninterest bearing demand deposit                   $3,590                            $3,823
                                                  -------------                     -------------
 Interest bearing deposits
  NOW accounts                                        6,346          2.17%              5,910         2.31%
  Passbook rates                                      6,563          2.13%              6,091         2.15%
  Money market accounts                               6,856          4.48%              6,026         4.87%
  Certificates of deposit                            38,648          5.71%             40,428         5.73%
                                                  -------------  -------------      -------------  -------------

 Total interest bearing deposits                     58,413          4.79%             58,455         4.95%
                                                  -------------  =============      -------------  =============

 Total deposits                                     $62,003                           $62,278
                                                  =============                     =============
</TABLE>


Certificates of deposit have scheduled maturity dates as follows at March 31,
1999 (in thousands):

                      2000                           $28,487
                      2001                             7,167
                      2002                             1,711
                      2003                               775
                      2004 and thereafter                508

The total amount of certificates of deposits with balances in excess of
$100,000 was $3,560,000 and $3,243,000 at March 31, 1999 and 1998, respectively.

Deposits from Company directors, executive officers, and related firms in which
they are principal owners totaled $358,000 and $302,000 at March 31, 1999 and
1998, respectively.

Interest on savings deposits is summarized as follows for the years ended
March 31:

                                        1999           1998           1997
                                    -------------  -------------  -------------

                                                   (In Thousands)
MMDA and NOW accounts                   $454           $398           $343
Savings deposits                         133            130            132
Certificates of deposit                2,222          2,365          2,409
                                    -------------  -------------  -------------
  Total                               $2,809         $2,893         $2,884
                                    =============  =============  =============



                                       39
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 9.      Advances From Federal Home Loan Bank:

Pursuant to collateral agreements with the Federal Home Loan Bank ("FHLB"),
advances are secured by all stock in the FHLB and qualifying first mortgage
loans aggregating 170% of the amount of outstanding advances. The following is
a summary of these advances at March 31:

                                                        1999           1998
                                                   -------------  -------------
                                                          (In Thousands)
Advances due in the following years
with rates from 4.00% to 8.31%                 1999   $2,750         $5,050
                                               2000    1,700          4,450
                                               2001      419            419
                                               2003    7,000          7,000
                                               2005    2,121          2,143
                                               2008    3,000            - -
                                                    -------------  ------------
                                                     $16,990        $19,062
                                                    =============  ============

The Bank can borrow up to 35 percent of total assets through FHLB advances. At
March 31, 1999 and 1998, the amount of unused credit available to the Bank was
approximately $19,648,000 and $16,631,000, respectively.

Note 10.     Other Borrowed Money:

Other borrowed money is summarized as follows at March 31:
                                                        1999           1998
                                                   -------------  -------------
                                                          (In Thousands)
Retail security repurchase agreements with
weighted-average interest rates of 5.57%
and  6.08% at March 31, 1999 and
1998, respectively.                                    $5,625        $5,258


The retail repurchase agreements are generally for terms of less than one year
and are collateralized by investments and loans with carrying values of
$8,056,000 and $6,780,000 at March 31, 1999 and 1998, respectively.

The following information relates to securities sold under repurchase agreements
for the years ended March 31:
                                       1999           1998           1997
                                   -------------  -------------  -------------
                                                 (In Thousands)
For the year:
 Highest month-end balance           $6,473         $6,501         $5,761
 Daily average balance               $5,597         $4,937         $4,808
 Weighted average rate                 5.19%          6.00%          5.74%




                                       40
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 11.     Income Taxes:

The provision for income taxes differs from that computed at the federal and
state statutory corporate rates as follows for the years ended March 31:

                                              1999        1998        1997
                                            --------    --------    --------
                                                     (In Thousands)
Tax at federal statutory rate (34%)           $552        $588        $417

Increases (decreases) in taxes:
 State income taxes net of federal benefit       4          25          68
 Tax benefit of incentive stock options        (90)        (63)
 Other                                          25          60         125
                                            --------    --------    --------
    Federal and state income taxes            $491        $610        $517
                                            ========    ========    ========


The provision for income taxes consists of the following for the years ended
March 31:

                                              1999        1998        1997
                                            --------    --------    --------
                                                      (In Thousands)
                 Current                      $382        $542        $560
                 Deferred                      109          68         (43)
                                            --------    --------    --------
                                              $491        $610        $517
                                            ========    ========    ========



For income tax purposes, the Company has state net operating loss carryforwards
of $392,000 which expire in 2014.

The tax effects of temporary differences that give rise to deferred tax assets
and deferred tax liabilities are summarized as follows at March 31:

                                           1999           1998
                                          ------         ------
                                             (In Thousands)
Allowance for loan losses                   $88           $102
Accrued compensation                         18             22
Deferred compensation                        24             56
Stock incentive plan                        - -             43
State net operating loss carryforward        31            - -
                                          ------          ------
 Total deferred tax assets                  161            223
                                          ------          ------
Premises and equipment                     (152)          (137)
Dividends on ESOP Plan                      (84)           (52)
FHLB common stock dividends                 (17)           (17)
                                          ------          ------
 Total deferred tax liabilities            (253)          (206)
                                          ------          ------

                                           $(92)           $17
                                          =======         ======


                                       41
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 12.     Financial Instruments With Off-Balance Sheet Risk:

The Company is party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments consist of commitments to extend credit. Commitments to
extend credit involve, to varying degrees, elements of credit and interest rate
risk in excess of the amount recognized in the balance sheet. The contract
amount reflects the extent of involvement the Company has in this particular
financial instrument.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and generally
require payment of a fee. As some commitments expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Company evaluates the creditworthiness of each customer on a
case by case basis.  The Company's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for commitments
to extend credit is represented by the contractual amount of those instruments.

The Company generally extends credit only on a secured basis. Collateral
obtained varies, but consists primarily of one-to-four family residences located
in Northwestern Wisconsin. Commitments to sell mortgage loans represent
commitments to sell mortgage loans to other entities at a future date and at a
specified price. Commitments to sell mortgage loans and commitments to extend
credit are generally exercised and fulfilled within ninety days. The fair value
of mortgage loans held for sale plus the commitments to extend credit generally
offset the commitments to sell mortgage loans. Both the commitments to extend
credit and the commitments to sell mortgage loans are at current market rates.

At March 31, 1999, the Company was committed to originate approximately
$1,069,000 of first mortgage loans. In addition, the undisbursed portion of
other credit lines were $4,665,000 at March 31, 1999.

The Company originates and holds adjustable rate loans with variable rates of
interest.  The rate of interest on these loans is capped over the life of the
loan.  At March 31, 1999, none of the approximately $55,351,000 of variable
rate loans had reached the interest rate cap.


Note 13.     Employee Benefit Plans:

The Company has a qualified defined contribution plan covering substantially all
full-time employees who have completed one year of service and are at least 21
years old. During the years ended March 31, 1999, 1998 and 1997, the Bank
contributed $25,000, $53,000 and $39,000, respectively, to this plan.




                                       42
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 13.     Employee Benefit Plans - Continued:


On April 1, 1994, the Company established an Employee Stock Ownership Plan
("ESOP") for substantially all of its full-time employees. As part of the stock
conversion, the ESOP borrowed $826,000 from the Company and purchased 103,250
shares of the Company's common stock. The debt bears interest at 8% and is
collateralized by the shares of common stock held by the ESOP. The Bank is
committed to make cash payments to the ESOP in amounts sufficient for it to meet
the debt service requirements over a seven year term. Cash dividends on common
stock held by the ESOP are applied to debt principal and interest. The unpaid
balance of the ESOP loan has been eliminated in consolidation and the amount of
unearned ESOP compensation expense is shown as a reduction of stockholders'
equity.  ESOP expense for the year ended March 31, 1999 , 1998 and 1997 totaled
$208,000, $163,000 and $160,000, respectively. At March 31, 1999 the number of
shares allocated, committed to be released and suspense shares were 44,250,
14,750 and 44,250, respectively. The fair value of unearned shares at March 31,
1999 was $1,313,000.

The Bank established an employee stock incentive plan on October 10, 1995. The
Bank purchased 41,300 shares for $459,000 and awarded them to officers and
employees of the Bank. The shares awarded vest 33.33% per year commencing
October, 1997. The aggregate purchase price of the shares is being amortized to
compensation expense as the participants become vested. The unamortized cost is
being reflected as a reduction of shareholders' equity as unearned restricted
stock. Compensation expense of $25,000, $89,000 and $204,000 was recognized for
the years ended March 31, 1999, 1998 and 1997, respectively.

During the year ended March 31, 1997, the Bank established a deferred
compensation agreement with it's President to defer the amounts due until his
retirement. Amounts deferred under the deferred compensation plan were $79,000
for the year ended March 31, 1997.


Note 14.     Stock Options:

On October 10, 1995, the Company adopted a Stock Option Plan and granted options
for 103,251 shares of common stock for a non-qualified stock option plan for
directors and a qualified incentive stock option plan for employees. All such
options are currently exercisable at $10.44 per share and expire in October
2005.

A summary of the status of the stock option plan as of March 31, 1999 and 1998
is as follows:

                                                       1999           1998
                                                   -------------  -------------

Options outstanding - April 1,                        101,627        103,251
   Granted                                                - -            - -
   Exercised                                             (647)          (542)
   Forfeited                                              - -          (1,082)
                                                   -------------  -------------
Options outstanding - March 31,                        100,980        101,627
                                                   =============  =============




                                       43
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 14.     Stock Options - Continued:

The Company applies Accounting Principles Board (APB) Opinion No. 25 and related
interpretations in accounting for its plans. Accordingly, no compensation cost
has been recognized for its stock option plans. Had compensation cost for the
Company's stock option plans been determined based on the fair value at the
grant dates for awards under those plans consistent with the method of Statement
of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation, the Company's net income and earnings per share would have been
reduced to the pro forma amounts indicated below:

                                          1998           1997
                                      -------------  -------------

Net income (In Thousands)                $1,066          $656
Basic earnings per share                  $1.38         $0.77
Diluted earnings per share                $1.31         $0.76

The stock option plans were fully vested in 1999, and accordingly, there is no
pro forma effect on the Company's net income and earnings per share.

Note 15.     Capital Requirements:

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

Quantitative measures established by regulation to ensure capital adequacy
require the Company to maintain amounts and ratios (set forth in the table
below) of total and Tier 1 capital (as defined in regulations) to risk-weighted
assets (as defined), and of Tier 1 captial (as defined) to average assets (as
defined).  Management believes, as of September 30, 1998 and 1997, the Company
meets all capital adequacy requirements to which it is subject.

As of March 31, 1999, the most recent notification from the Federal Deposit
Insurance Corporation categorized the Company as well capitalized under the
regulatory framework for prompt corrective action.  To be categorized as well
capitalized, the Company must maintain minimum total risk-based, Tier 1 risk-
based, and Tier 1 leverage ratios as set forth in the table.  There are no
conditions or events since notification that management believes have changed
the institution's category.



                                       44
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 15.     Capital Requirements - Continued:

The Company's and Bank's actual capital amounts and ratios are presented in
the following tables:

<TABLE>
                                                                                         To Be Well
                                                                                       Capitalized Under
                                                                For Capital            Prompt Corrective
                                     Actual                  Adequacy Purposes         Action Provisions
                              -----------------------      ---------------------    ----------------------
                               Amount          Ratio        Amount        Ratio      Amount          Ratio
                              --------        -------      --------      -------    --------        -------
<CAPTION>
<S>                         <C>             <C>          <C>       <C>   <C>      <C>       <C>    <C>

As of March 31, 1999:

 Total capital (to risk
  weighted assets)
   Consolidated               $14,407          22.84%       $5,047    >    8.00%       N/A
                                                                      -
   Subsidiary Bank            $10,161          16.71%       $4,864    >    8.00%    $6,080     >     10.00%
                                                                      -                        -
 Tier 1 capital (to risk
  weighted assets)
   Consolidated               $14,032          22.24%       $2,524    >    4.00%       N/A
                                                                      -
   Subsidiary Bank             $9,786          16.09%       $2,432    >    4.00%    $3,648     >      6.00%
                                                                      -                        -
 Tier 1 capital (to
  average assets)
   Consolidated               $14,032          14.29%       $3,926    >    4.00%       N/A
                                                                      -
   Subsidiary Bank             $9,786          10.07%       $3,888    >    4.00%    $4,861     >      5.00%
                                                                      -                        -

As of March 31, 1998:

 Total captial (to risk
  weighted assets)
   Consolidated               $13,937          22.12%       $5,041    >    8.00%       N/A
                                                                      -
   Subsidiary Bank             $9,236          14.74%       $5,012    >    8.00%    $6,264     >     10.00%
                                                                      -                        -
 Tier 1 capital (to risk
  weighted assets)
   Consolidated               $13,453          21.35%       $2,521    >    4.00%       N/A
                                                                      -
   Subsidiary Bank             $8,752          13.97%       $2,506    >    4.00%    $3,759     >      6.00%
                                                                      -                        -
 Tier 1 capital (to
  average assets)
   Consolidated               $13,453          13.88%       $3,877    >    4.00%       N/A
                                                                      -
   Subsidiary Bank             $8,752           9.21%       $3,803    >    4.00%    $4,753     >      5.00%
                                                                      -                        -
</TABLE>

                                       45
<PAGE>


                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 15.     Capital Requirements - Continued:

As a state chartered savings bank, the Company is also subject to the
minimum regulatory captial requirements of the state of Wisconsin.  At March 31,
1999, the Company's regulatory capital exceeded the state regulatory capital
requirement of $6,281,000.

Note 16.     Restrictions on Retained Earnings:

The Company has qualified under the provisions of the Internal Revenue Code
which permit as a deduction from taxable income an allowance for bad debts which
differs from the provision for such losses charged to income.  Accordingly,
retained earning at March 31, 1999, includes approximately $1,295,000
representing the Company's federal bad debt deduction in excess of actual losses
for which no provision for income taxes has been made.  If in the future this
portion of retained earnings is used for any purpose other than to absorb bad
debt losses, federal income taxes may be imposed at the then applicable rates.


Note 17.     Fair Values of Financial Instruments:

The following methods and assumptions were used by the Bank in estimating its
fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts reported in the balance sheet
for cash and short-term instruments approximate those assets fair values.

Securities: Fair values for investments and mortgage-backed securities are based
on quoted market prices, where available. If quoted market prices are not
available, fair values are based on quoted market prices of comparable
instruments.

Loans receivable: For variable-rate mortgage loans that reprice frequently and
with no significant change in credit risk, fair values are based on carrying
values. The fair values for residential mortgage loans are based on quoted
market prices of similar loans sold in conjunction with securitization
transactions, adjusted for differences in loan characteristics.

The fair values for commercial real estate loans, rental property mortgage loans
and consumer and other loans are estimated using discounted cash flow analysis,
using interest rates currently being offered for loans with similar terms to
borrowers of similar credit quality. The carrying amount of accrued interest
approximates its fair value.




                                       46
<PAGE>



                     NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 17.     Fair Values of Financial Instruments - Continued:

Deposits: The fair values disclosed for interest and noninterest checking
accounts, passbook accounts and money market accounts are, by definition, equal
to the amount payable on demand at the reporting date. The fair values of
fixed-rate certificates of deposit are estimated using a discounted cash flow
calculation that applies interest rates currently being offered on certificates
to a schedule of aggregated expected monthly maturities of the outstanding
certificates of deposit.

Federal Home Loan Bank Advances: The Bank's long-term borrowings are estimated
using the discounted cash flow analysis, based on the Bank's current incremental
borrowing rates for similar types of borrowing arrangements.

The carrying amounts and fair values of the Bank's financial instruments
consisted of the following at March 31:
<TABLE>
                                                                        1999                          1998
                                                            ----------------------------  ----------------------------
                                                              Carrying         Fair         Carrying         Fair
                                                               Value          Value          Value          Value
                                                            -------------  -------------  -------------  -------------
<CAPTION>
<S>                                                            <C>            <C>            <C>            <C>
             Financial assets:
                Cash and cash equivalents                        $10,470        $10,470        $ 6,047        $ 6,047
                Securities                                         4,248          4,236          4,159          4,158
                Mortgage-backed securities                         6,037          6,130          6,398          6,546
                Loans receivable:
                  Real estate - one-to-four family                54,192         54,441         58,117         58,617
                  Real estate - other                              8,665          8,705          8,582          8,656
                  Other loans                                     11,008         11,064         12,224         12,228
                                                            -------------  -------------  -------------  -------------
                                                                 $84,150        $84,576        $89,480        $90,205
                                                            =============  =============  =============  =============

                                                                        1999                          1998
                                                            ----------------------------  ----------------------------
                                                              Carrying         Fair         Carrying         Fair
                                                               Value          Value          Value          Value
                                                            -------------  -------------  -------------  -------------
             Financial liabilities:
                Savings deposits and checking accounts           $19,765        $19,765        $18,027        $18,027
                Certificates of deposit                           38,648         38,259         40,428         40,395
                Federal Home Loan Bank Advances                   16,990         16,511         19,062         18,616
                Other borrowed money                               5,625          5,620          5,258          5,251
                                                            -------------  -------------  -------------  -------------
                                                                 $81,028        $80,155        $82,775        $82,289
                                                            =============  =============  =============  =============

</TABLE>



                                       47
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 18.     Earnings Per Share:

Earnings per share are based upon the weighted average number of shares
outstanding. The following shows the computation of the basic and diluted
earnings per share.
                                                         Weighted
                                                          Average     Earnings
                                               Net       Number of      Per
                                              Income      Shares       Share
                                            ---------   -----------  ----------
Year Ended March 31, 1999:

 Earnings Per Share - Basic                  $1,133       779,731      $1.45
                                                                     ==========
 Effect of Stock Options                        - -        48,119
                                            ---------   -----------

 Earnings Per Share - Diluted                $1,133       827,850      $1.37
                                            =========   ===========  ==========

Year Ended March 31, 1998:

 Earnings Per Share - Basic                  $1,120       775,112      $1.44
                                                                     ==========
 Effect of Stock Options                        - -        39,603
                                            ---------   -----------

 Earnings Per Share - Diluted                $1,120       814,715      $1.37
                                            =========   ===========  ==========

Year Ended March 31, 1997:

 Earnings Per Share - Basic                    $710       847,090      $0.84
                                                                     ==========
 Effect of Stock Options                        - -        11,198
                                            ---------   -----------

 Earnings Per Share - Diluted                  $710       858,288     $ 0.83
                                            =========   ===========  ==========

Note 19.     Condensed Parent Company Only Financial Information:


Balance Sheets - at March 31:                         1999           1998
                                                  -------------  -------------
                                                         (In Thousands)
Assets:
 Cash and cash equivalents                           $2,414         $2,653
 Investment in subsidiary                             9,787          8,752
 Deferred income tax assets                              32             93
 Other current assets                                   281            161
                                                  -------------  -------------
                                                    $12,514        $11,659
                                                  =============  =============

Liabilities                                           $ 153          $ 145
Stockholders' Equity                                 12,361         11,514
                                                   ------------  -------------
                                                    $12,514        $11,659
                                                   ============  =============


                                       48
<PAGE>



                     NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 19.     Condensed Parent Company Only Financial Information - Continued:

Statements of Operations - for the years ended March 31:
<TABLE>

                                                           1999              1998              1997
                                                          ------            ------            ------
                                                                        (In Thousands)
<CAPTION>
<S>                                                     <C>                <C>               <C>

Income:
Interest from affiliate                                    $155              $197              $271

Expense:
Compensation                                                 25                89               204
Other expense                                                57                59                69
                                                         -------           -------           ------
 Total expense                                               82               148               273

Income (loss) before for income taxes and equity in
 undistributed net income of affiliates                      73                49                (2)
Provision for income taxes                                  (26)               21               - -
                                                         --------          -------           -------

Income (loss) before equity in undistributed net
 income of affiliates                                        99                28                (2)
Equity is undistributed net income of affiliate           1,034             1,092               712
                                                         --------          -------           -------

  Net income                                             $1,133            $1,120              $710
                                                         ========          =======           =======
</TABLE>


Statements of Cash Flows - for the years ended March 31:
<TABLE>

                                                           1999              1998              1997
                                                         --------           ------           -------
                                                                        (In Thousands)
<CAPTION>
<S>                                                    <C>               <C>                 <C>

Cash flows from operating activities:
 Net income                                              $1,133            $1,120              $710
                                                        --------            ------           -------
Adjustments to reconcile net income to net cash
 provided by operating activities:
 Equity in net income of subsidiary                      (1,034)           (1,092)             (712)
 Deferred income taxes                                       61                19               (57)
 Amortization of ESOP and restricted stock awards           260               258               345
 Change in operating assets and liabilities:
  Other current assets                                     (121)              (79)              (74)
  Other liabilities                                           8                 3               120
                                                         --------           ------           -------
   Net cash provided by operating activities                307               229               332
                                                         --------           ------           -------

Cash flows from investment activities:
 Cash dividends from subsidiary                             - -               - -             2,670
                                                         --------           ------           -------
   Net cash provided by investment activities               - -               - -             2,670
                                                         --------           ------           -------

Cash flows from financing activities:
 Purchase of common stock for the treasury                  - -              (301)           (1,695)
 Proceeds from exercise of stock options                      6               - -               - -
 Cash dividends                                            (552)             (451)             (370)
                                                         --------           ------           -------
  Net cash used in financing activities                    (546)             (752)           (2,065)
                                                         --------           ------           -------
  Net increase (decrease) in cash                          (239)             (523)              937
Cash and cash equivalents at beginning                    2,653             3,176             2,239
                                                         --------           ------           -------

Cash and cash equivalents at end                         $2,414            $2,653            $3,176
                                                         ========           ======           =======
</TABLE>



                                       49
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 20.     Quarterly Consolidated Financial Information (Unaudited):
<TABLE>

                                                                              1998                           1999
                                                            -------------------------------------------  -------------
                                                              June 30,       Sept. 30,      Dec. 31,       March 31,
                                                            -------------  -------------  -------------  -------------
                                                                                 (In Thousands)
<CAPTION>
<S>                                                          <C>             <C>           <C>             <C>

Interest and dividend income                                   $1,957          $1,969        $1,957          $1,898
Interest expense                                                1,046           1,034         1,008             964
                                                            -------------  -------------  -------------  -------------
 Net interest income                                              911             935           949             934
Provision for loan losses                                          25              25           323               3
                                                            -------------  -------------  -------------  -------------
 Net interest income after provision
  for loan losses                                                 886             910           626             931
Non-interest income                                               204             184           198             150
Non-interest expense                                              601             617           615             632
                                                            -------------  -------------  -------------  -------------
 Income before income taxes                                       489             477           209             449
Income taxes                                                      167             167            60              97
                                                            -------------  -------------  -------------  -------------
  Net income                                                     $322            $310          $149            $352
                                                            =============  =============  =============  =============

Earnings per share                                              $0.42           $0.40         $0.19           $0.45
Dividends                                                       $0.16           $0.17         $0.17           $0.17
Market information:
 Trading range - high                                          $22.00          $20.50        $25.00          $23.00
                  low                                          $19.50          $15.63        $15.75          $18.50
                close                                          $20.25          $18.75        $22.00          $22.25


                                                                                1997                         1998
                                                            -------------------------------------------  -------------
                                                              June 30,       Sept. 30,      Dec. 31,       March 31,
                                                            -------------  -------------  -------------  -------------
                                                                                   (In Thousands)
Interest and dividend income                                   $1,911          $1,928        $1,959          $1,965
Interest expense                                                1,050           1,066         1,075           1,052
                                                            -------------  -------------  -------------  -------------
 Net interest income                                              861             862           884             913
Provision for loan losses                                          25              25            25              25
                                                            -------------  -------------  -------------  -------------
Net interest income after provision
    for loan losses                                               836             837           859             888
Non-interest income                                               130             136           135             207
Non-interest expense                                              561             582           560             595
                                                            -------------  -------------  -------------  -------------
 Income before income taxes                                       405             391           434             500
Income taxes                                                      153             135           149             173
                                                            -------------  -------------  -------------  -------------
 Net income                                                      $252            $256          $285            $327
                                                            =============  =============  =============  =============

</TABLE>



                                       50
<PAGE>



                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


Note 20.     Quarterly Consolidated Financial Information (Unaudited) -
             Continued:

<TABLE>
                                                                                1997                         1998
                                                            -------------------------------------------  -------------
                                                              June 30,       Sept. 30,       Dec. 31,      March 31,
                                                            -------------  -------------  -------------  -------------
                                                                                  (In Thousands)
<CAPTION>
<S>                                                           <C>             <C>            <C>            <C>

Earnings per share                                              $0.33           $0.33          $0.37          $0.42
Dividends                                                       $0.12           $0.13          $0.14          $0.15
Market information:
Trading range - high                                           $13.63          $16.75         $20.75         $22.25
                 low                                           $15.00          $14.63         $16.13         $20.75
               close                                           $15.00          $16.13         $20.75         $21.13


                                                                                1996                         1997
                                                            -------------------------------------------  -------------
                                                              June 30,       Sept. 30,       Dec. 31,      March 31,
                                                            -------------  -------------  -------------  -------------
                                                                                 (In Thousands)
Interest and dividend income                                   $1,802          $1,868         $1,903         $1,919
Interest expense                                                  972           1,010          1,052          1,038
                                                            -------------  -------------  -------------  -------------
 Net interest income                                              830             858            851            881
Provision for loan losses                                           6              25             25             25
                                                            -------------  -------------  -------------  -------------
 Net interest income after provision
  for loan losses                                                 824             833            826            856
Non-interest income                                               140             141            146            104
Non-interest expense                                              577             954            547            565
                                                            -------------  -------------  -------------  -------------
 Income before income taxes                                       387              20            425            395
Income taxes                                                      164               8            177            168
                                                            -------------  -------------  -------------  -------------
 Net income                                                      $223             $12           $248           $227
                                                            =============  =============  =============  =============

Earnings per share                                              $0.25           $0.01          $0.29          $0.29
Dividends                                                       $0.09           $0.10          $0.10          $0.11
Market information:
 Trading range - high                                          $10.38          $11.25         $12.50         $14.50
                  low                                          $10.25          $10.25         $11.25         $13.50
                close                                          $10.38          $11.25         $12.13         $14.13


</TABLE>



                                       51
<PAGE>


                      NORTHWEST EQUITY CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 21.    Concentration of Credit Risk:

The Bank grants residential, commercial and consumer loan primarily in
Northwestern Wisconsin.  The ability of its debtors to honor their contracts
is dependent on the performance of the local economy.

Note 22.    Contingencies:

In the normal course of business, various legal proceedings involving the
Company are pending.  Management, based upon advice from legal counsel, does
not anticipate any significant losses as a result of these actions.


Note 23.    Pending Transaction:

On February 17, 1999, the board announced that it had entered into a definitive
agreement and plan of merger with Bremer Financial Corporation ("Bremer"), for
Bremer to acquire Northwest Equity Corp. in a stock transaction.  The
agreement is subject to final regulatory and shareholder approval.


                                       52
<PAGE>






SHAREHOLDER INFORMATION



Board of Directors of Northwest Equity Corp. and Northwest Savings Bank

Brian L. Beadle
President,  Chief Executive Officer, Chief Financial Officer and Director of the
Company;  President,  Chief  Executive  Officer,  Chief  Financial  Officer  and
Director of the Bank since 1976.

Gerald J. Ahlin
Director  of the  Company;  Director  of  the  Bank  since  1985;  prior  to his
retirement  in 1992,  business and  economics  teacher at Amery Public  Schools,
Amery, Wisconsin.

Vern E. Albrecht
Director  of the  Company;  Director  of  the  Bank  since  1989;  prior  to his
retirement in 1991,  President and principal owner of Nova Tran Corporation,  an
electronics and medical manufacturing company, Clear Lake, Wisconsin.

Michael D. Jensen
Director of the  Company;  Director of the Bank since 1986;  President  of Amery
Telcom, Inc., a communications company.

Donald M. Michels
Director  of the  Company;  Director  of  the  Bank  since  1987;  prior  to his
retirement in 1991, President of Holy Family Hospital, New Richmond, Wisconsin
 .
Norman M. Osero
Director  of the  Company;  Director  of  the  Bank  since  1992;  President  of
Dynatronix,  Inc., Amery,  Wisconsin,  an electronic  manufacturing company, and
Vice  President  of  Amery  Technical  Products,   Inc.,  Amery,   Wisconsin,  a
subcontractor manufacturing company.

Executive Officers of Northwest Equity Corp. and Northwest Savings Bank

Brian L. Beadle
President,  Chief Executive Officer, Chief Financial Officer and Director of the
Company;  President,  Chief  Executive  Officer,  Chief  Financial  Officer  and
Director of the Bank since 1976.  James L. Moore Vice President and Secretary of
the Company; Senior Vice President and Secretary of the Bank since 1990.


Headquarters

Northwest Equity Corp.
234 Keller Avenue South
Amery, Wisconsin 54001
(715) 268-7105

Northwest Savings Bank
234 Keller Avenue South
Amery, Wisconsin 54001
(715) 268-7105

Northwest Savings Bank-
Bank Office Locations

Home Office:
234 Keller Avenue South
Amery, Wisconsin 54001
(715) 268-7105

Branch Offices:

New Richmond Office
532 Knowles Avenue South
New Richmond, Wisconsin 54017

Siren Office
24082 Highway 35 North
Siren, Wisconsin 54872

Shareholder/Media Relations

Shareholders,  investors,  analysts,  the news  media and others  interested  in
additional  information  may  contact  Brian  L.  Beadle,  President  and  Chief
Executive Officer of the Company, at the Company's headquarters.

Annual Report on Form 10-KSB

A copy of Northwest  Equity  Corp.'s Form 10-KSB filed with the  Securities  and
Exchange Commission is available without charge by writing:
    Brian L. Beadle, President
    Northwest Equity Corp.
    234 Keller Avenue South
    Amery, Wisconsin 54001

Annual Meeting

The fifth  annual  meeting of  shareholders  of Northwest  Equity  Corp.  will
be held at 2:00 p.m.,  Amery time,  August 17, 1999,  at Centennial Hall, 608
Harriman Ave. South, Amery, Wisconsin 54001

Auditors

Wipfli Ullrich Bertelson LLP
400 Daly Avenue, Suite 200
Wisconsin Rapids, WI 54495

Legal Counsel

Mallery & Zimmerman, S.C.
731 North Jackson Street, Suite 804
Milwaukee, Wisconsin 53202-4601

Transfer Agent

Firstar Trust Co.
615 East Michigan Avenue
Milwaukee, Wisconsin 53201
Telephone:        (414) 276-3737
Toll-Free:        (800) 637-7549

Stock Listing Information

Northwest  Savings Bank  converted from a mutual to a stock company,  effective
October 7, 1994, at which time Northwest Equity Corp. consummated the sale of
1,032,517  shares of its Common Stock to the public.  The shares of Common Stock
of Northwest  Equity Corp. are publicly  traded in the National  Association of
Securities  Dealers,  Inc.  Automated  Quotation  "Small-Cap"  Market under the
symbol "NWEQ."

Stock Price Information
                                       Share Pricing
                                1999                   1998
Quarter Ended               Low     High           Low     High

  March 31                  18.50   23.00         20.63    22.25
  June 30                                         19.50    22.00
  September 30                                    15.63    20.50
  December 31                                     15.75    25.00

NWEQ completed its initial public offering of shares in October 1994

Shareholders and Shares Outstanding

As of May 31, 1999,  there were 163  registered  shareholders  of record and 286
estimated  additional  beneficial  shareholders for an approximate total of 449.
Shares outstanding at May 31, 1999 were 825,301.



                                       53
<PAGE>