<PAGE>
                                                                      Exhibit 13


                                  [ L O G O ]




                           ROCKY FORD FINANCIAL, INC.


                                ANNUAL REPORT FOR

                                 THE YEAR ENDED

                               SEPTEMBER 30, 1997
<PAGE>
 
                     [ROCKY FORD FINANCIAL, INC. LETTERHEAD]


To Our Stockholders:

     With successful completion of the stock conversion of Rocky Ford Federal
Savings and Loan Association, we are delighted to present this first annual
report to the stockholders of its holding company, Rocky Ford Financial, Inc.

     The Company is positioned to begin a new era of service to the community
with the additional capital obtained through the stock offering. We plan to take
advantage of the opportunities afforded us in this vary competitive marketplace.

     Most of the 1997's financial results were as a mutual institution as the
stock conversion was completed May 21, 1997. As a result of the conversion,
assets grew 13.5% to $23.2 million and stockholders' equity increased to $6.5
million or 27.83% of assets. The loan portfolio increased by 10% to $13.5
million, while our savings decreased 6.25% to $16.1 million.

     The Directors Management and Employees of Rocky Ford Financial, Inc. are
looking forward to our first full year as a stock company and the opportunity to
serve our community. We are committed to meeting the challenges of the financial
services industry while maintaining our tradition of first class service to our
customers. Thank you for your trust and support as we move forward to a new and
exciting era in the history of your company.

                                            Sincerely,


                                            Keith E. Waggoner
                                            President & Chief Executive Officer
<PAGE>
 
                             FINANCIAL HIGHLIGHTS

<TABLE> 
<CAPTION> 



                                                                At September 30,                      Change
                                                              ---------------------          -----------------------
                                                              1997             1996          Amount          Percent
                                                              ----             ----          ------          -------
                                                                           (Dollars in thousands)
<S>                                                       <C>              <C>             <C>             <C> 
Financial Position:
  Total assets..........................................  $   23,165       $  20,388       $  2,777           13.62%
  Loans receivable, net.................................      13,530          12,287          1,243           10.12
  Mortgage-backed and related securities................       2,421           2,617           (196)          (7.49)
  Investment securities.................................       1,482           1,085            397           36.59
  Deposits..............................................      16,139          17,145         (1,006)          (5.87)
  Stockholders' equity..................................       6,448           2,778          3,670          132.11
                                                                                                       
  Number of common shares outstanding...................     423,200              --             --              --
</TABLE> 

<TABLE> 
<CAPTION> 

                                                               For the Year Ended
                                                                  September 30,                      Change
                                                              ---------------------          -----------------------
                                                              1997             1996          Amount          Percent
                                                              ----             ----          ------          -------
                                                                            (Dollars in thousands)
<S>                                                       <C>              <C>             <C>             <C> 
Results of Operations:
  Interest income......................................   $    1,647       $   1,525       $    122            8.00%
  Interest expense.....................................          827             820              7            0.85
  Net interest income..................................          820             705            115           16.31
  Provision for loan losses............................           --              --             --              --
  Net interest income after provision                                                                  
    for loan losses....................................          820             705            115           16.31
  Non-interest income..................................           31              21             10           47.62
  Non-interest expense.................................          728             539            189           35.06
  Earnings before cumulative effect                                                                    
    of accounting change...............................           --              --             --              --
  Net earnings.........................................           93             129            (36)         (27.91)
</TABLE> 

                                       1
<PAGE>
 
                SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA


SUMMARY OF FINANCIAL CONDITION

<TABLE> 
<CAPTION> 
                                                                       At September 30,
                                                  --------------------------------------------------------
                                                   1997         1996         1995         1994        1993
                                                  ------       ------       ------       ------      -----
                                                                       (Dollars in thousands)
<S>                                             <C>         <C>           <C>          <C>         <C> 
Total amount of:
Total assets.................................   $  23,165   $  20,388     $ 19,653     $ 19,621    $  19,667
Cash.........................................         305         221          160          123          321
Interest-bearing deposits....................       2,900       2,000        1,100          600          600
Certificates of deposit......................       1,999       1,897        2,583        2,780        3,570
Securities available for sale
     FHLB stock..............................         323         303          284          284          284
     FHLMC stock.............................         409         282          121           11           11
                                                ---------   ---------     --------     --------    ---------
        Total................................         732         585          445          295          295
                                                ---------   ---------     --------     --------    ---------
Securities-held to maturity
     GNMA's..................................       2,421       2,617        1,373        1,568        2,049
     U.S. agencies...........................         749         500        2,700        3,573        2,004
                                                ---------   ---------     --------     --------    ---------
        Total................................       3,170       3,117        4,073        5,141        4,053
                                                ---------   ---------     --------     --------    ---------
Loans receivable, net........................      13,530      12,287       10,984       10,361       10,491
Savings deposits.............................      16,139      17,145       16,702       17,137       17,420
Equity substantially restricted..............       6,448       2,778        2,573        2,192        1,962

Number of:
   Real estate loans outstanding.............         408         403          401          401          425
   Savings accounts..........................       1,617       1,652        1,675        1,709        1,815
   Offices open..............................           1           1            1            1            1
</TABLE> 

SUMMARY OF OPERATIONS

<TABLE> 
<CAPTION> 
                                                                   Year Ended September 30,
                                                  --------------------------------------------------------
                                                   1997         1996         1995         1994        1993
                                                  ------       ------       ------       ------      -----
                                                                    (Dollars in thousands)
<S>                                             <C>          <C>          <C>          <C>         <C> 
Interest  income.............................   $   1,647    $  1,525     $  1,471     $  1,479    $   1,583
Interest expense.............................         827         820          734          684          763
                                                ---------    --------     --------     --------    ---------
     Net interest income ....................         820         705          737          795          820
Provision for loan losses (recovery).........          --          --           69          (18)         (24)
                                                ---------    --------     --------     --------    ---------
     Net interest income after
     provision for loan losses...............         820         705          806          777          796
                                                ---------    --------     --------     --------    ---------
Noninterest income...........................          31          21           26           18           33
                                                ---------    --------     --------     --------    ---------
     Subtotal................................         851         726          832          795          829
                                                ---------    --------     --------     --------    ---------

Noninterest expense:
     Compensation and benefits...............         526         232          230          217          203
     Other (1)...............................         202         307          197          191          210
                                                ---------    --------     --------     --------    ---------
        Total noninterest expense............         728         539          427          408          413
                                                ---------    --------     --------     --------    ---------
        Income before taxes..................         123         187          405          387          416
Income tax expense...........................          30          58          118          157          143
                                                ---------    --------     --------     --------    ---------
        Net income...........................   $      93    $    129     $    287     $    230    $     273
                                                =========    ========     ========     ========    =========
</TABLE> 

                                       2
<PAGE>
 
KEY OPERATING RATIOS

<TABLE> 
<CAPTION> 
                                                                      Year Ended September 30,
                                                   ------------------------------------------------------------
                                                    1997           1996         1995         1994          1993
                                                   ------         ------       ------       ------        -----
<S>                                                <C>            <C>         <C>          <C>          <C>   
Performance Ratios:
   Return on assets (ratio of net earnings
      to average total assets)...................     0.43%        0.64%        1.50%        1.14%        1.38%
   Return on equity (ratio of net earnings
      to average equity).........................     2.57         4.81        12.24        10.69        14.45
   Ratio of average interest-earning assets
      to average interest-bearing liabilities....   119.91       116.14       114.83       111.93       110.39
   Ratio of net interest income, after provision
      for loan losses, to noninterest expense....   112.75       130.85       188.60       190.25       192.74
   Net interest rate spread......................     3.13         2.90         3.33         3.60         3.81
   Net yield on average interest-earning
      assets.....................................     3.92         3.57         3.91         4.02         4.23

Quality Ratios:
   Non-performing loans to total loans at
      end of period..............................     0.00         0.00         0.00         0.05         0.00
   Non-performing loans to total assets..........     0.00         0.00         0.00         0.03         0.00
   Non-performing assets to total assets
      at end of period...........................     0.00         0.00         0.00         0.15         0.41
   Allowance for loan losses to non-
      performing loans at end of period..........     0.00         0.00         0.00      2560.00         0.00
   Allowance for loan losses to total
      loans, net.................................     0.44         0.49         0.55         1.24         1.12

Capital Ratios:
   Equity to total assets at end of period.......    27.83        13.63        13.09        11.17         9.98
   Average equity to average assets..............    16.82        13.27        12.24        10.70         9.56
</TABLE> 
------------------
(a)      Annualized.

                                       3
<PAGE>
 
                   BUSINESS OF THE COMPANY AND THE ASSOCIATION

ROCKY FORD FINANCIAL, INC.

         Rocky Ford Financial, Inc. (the "Company") was incorporated under the
laws of the State of Delaware in March 1997 for the purpose of becoming a
savings and loan holding company for Rocky Ford Federal Savings and Loan
Association ("Rocky Ford" or the "Association"). On May 21, 1997, the
Association consummated its conversion from mutual to stock form (the
"Conversion") and the Company completed its offering of Common Stock through the
sale and issuance of 423,400 shares of Common Stock at a price of $10.00 per
share, realizing gross proceeds of $4.23 million and net proceeds of $3.83
million. The Company purchased all of the stock of the Association with a
portion of the offering proceeds. Prior to the Conversion, the Company did not
engage in any material operations. Currently, the Company's principal business
is the business of the Association. The Company has no significant assets other
than the outstanding capital stock of the Association, $1.6 million of cash and
cash equivalents and a note receivable from the Company's Employee Stock
Ownership Plan ("ESOP"), therefore, substantially all of the discussion in this
Annual Report relates to the operations of the Association.

ROCKY FORD FEDERAL SAVINGS AND LOAN ASSOCIATION

         The Association is a federal mutual savings and loan association
operating through a single office located in Rocky Ford, Colorado and serving
Otero County, Colorado. The Association was chartered as a federal mutual
savings and loan association and received federal insurance of its deposit
accounts in 1934, under its current name of Rocky Ford Federal Savings and Loan
Association. Effective May 21, 1997, the Association became a stock savings and
loan association. At September 30, 1997, the Association had total assets of
$21.6 million, total deposits of $16.1 million and equity of $4.9 million.

         The principal business of the Association consists of attracting
deposits from the general public and investing these deposits in loans secured
by first mortgages on single-family residences in the Association's market area.
The Association derives its income principally from interest earned on loans
and, to a lesser extent, interest earned on mortgage-backed securities and
investment securities and noninterest income. Funds for these activities are
provided principally by operating revenues, deposits and repayments of
outstanding loans and investment securities and mortgage-backed securities.

         The Association is subject to examination and comprehensive regulation
by the Office of Thrift Supervision ("OTS"), and the Association's savings
deposits are insured up to applicable limits by the Savings Association
Insurance Fund ("SAIF"), which is administered by the Federal Deposit Insurance
Corporation ("FDIC"). The Association is a member of, and owns capital stock in
the FHLB of Topeka, which is one of 12 regional banks in the FHLB System. The
Association is further subject to regulations of the Board of Governors of the
Federal Reserve System governing reserves to be maintained and certain other
matters.

         The Association's executive offices are located at 801 Swink Avenue,
Rocky Ford, Colorado 81067-0032, and its main telephone number is (719)
254-7642.


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

GENERAL

         The principal business of the Association consists of accepting
deposits from the general public and investing these funds primarily in loans
and in investment securities and mortgage-backed securities. The Association's
loan portfolio consists primarily of loans secured by residential real estate
located in its market area, with terms of 15 to 20 years.

                                        4
<PAGE>
 
         The Association's net income is dependent primarily on its net interest
income, which is the difference between interest income earned on its loan,
investment securities and mortgage-backed securities portfolio and interest paid
on interest-bearing liabilities. Net interest income is determined by (i) the
difference between yields earned on interest-earning assets and rates paid on
interest-bearing liabilities ("interest rate spread") and (ii) the relative
amounts of interest-earning assets and interest-bearing liabilities. The
Association's interest rate spread is affected by regulatory, economic and
competitive factors that influence interest rates, loan demand and deposit
flows. To a lesser extent, the Association's net income also is affected by the
level of noninterest expenses such as compensation and employee benefits and
FDIC insurance premiums.

         The operations of the Association are significantly affected by
prevailing economic conditions, competition and the monetary, fiscal and
regulatory policies of governmental agencies. Lending activities are influenced
by the demand for and supply of housing, competition among lenders, the level of
interest rates and the availability of funds. Deposit flows and costs of funds
are influenced by prevailing market rates of interest, primarily on competing
investments, account maturities and the levels of personal income and savings in
the Association's market area.

ASSET/LIABILITY MANAGEMENT

         The Association seeks to reduce its exposure to changes in interest
rates by originating fixed-rate loans with maturities of no more than 15 years
and by maintaining a relatively high level of liquid assets. The matching of the
Association's assets and liabilities may be analyzed by examining the extent to
which its assets and liabilities are interest rate sensitive and by monitoring
the expected effects of interest rate changes on the Association's net interest
income.

         An asset or liability is interest rate sensitive within a specific time
period if it will mature or reprice within that time period. If the
Association's assets mature or reprice more quickly or to a greater extent than
its liabilities, the Association's net portfolio value and net interest income
would tend to increase during periods of rising interest rates but decrease
during periods of falling interest rates. If the Association's assets mature or
reprice more slowly or to a lesser extent than its liabilities, the
Association's net portfolio value and net interest income would tend to decrease
during periods of rising interest rates but increase during periods of falling
interest rates. As a result of the interest rate risk inherent in the historical
savings institution business of originating long-term loans funded by short-term
deposits, the Association has pursued certain strategies designed to decrease
the vulnerability of its earnings to material and prolonged changes in interest
rates.

         In accordance with the Association's interest rate risk policy, the
Association emphasizes the origination of fixed rate loans with maturities of no
more than 15 years and maintains a relatively high level of liquid assets.
Maintaining a high level of liquid assets tends to reduce potential net income
because liquid assets usually provide a lower yield than longer term (less
liquid) assets. At September 30, 1997, the average weighted term to maturity of
the Association's loan portfolio was 13 years.

INTEREST RATE SENSITIVITY ANALYSIS

         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 period if it
will mature or reprice within that period. The interest rate sensitivity gap is
defined as the difference between the amount of interest-earning assets maturing
or repricing within a specific time period and the amount of interest-bearing
liabilities maturing or repricing within that time period. A gap is considered
positive when the amount of interest rate sensitive assets exceeds the amount of
interest rate sensitive liabilities, and is considered negative when the amount
of interest rate sensitive liabilities exceeds the amount of interest rate
sensitive assets. At September 30, 1997, the Association had an excess of
interest-bearing liabilities over interest-earning assets maturing or repricing
within one year of approximately $6.8 million, resulting in a negative one-year
interest rate sensitivity gap of 30.31%. Generally, during a period of rising
interest rates, a negative gap would be expected to adversely affect net
interest income while a positive gap would be expected to result in an increase
in net interest income, while conversely during a period of declining interest
rates, a negative gap would be

                                        5
<PAGE>
 
      expected to result in an increase in net interest income and a positive
      gap would be expected to adversely affect net interest income. The
      Association's current one-year gap is within the guidelines established by
      management and approved by the Board of Directors. Management considers
      numerous factors when establishing these guidelines, including current
      interest rate margins, capital levels, and any guidelines provided by the
      OTS.

          The following table sets forth the amounts of interest-earning assets
      and interest-bearing liabilities outstanding at September 30, 1997 which
      are expected to mature or reprice in each of the time periods shown.
<TABLE> 
<CAPTION> 
                                                                 Three     Over One    Over Three   Over Five     Over
                                                 Three Months  Months to    Through      Through     Through       Ten
                                                    or Less    One Year   Three Years  Five Years   Ten Years     Years       Total
                                                    -------    --------   -----------  ----------   ---------     -----       -----
                                                                                (Dollars in thousands)
<S>                                               <C>         <C>         <C>          <C>         <C>         <C>         <C> 
Interest-earning assets:
-----------------------

Mortgage loans..................................  $     160   $   1,144   $   2,482    $   2,316   $   4,888   $   2,540   $  13,530
Share loans.....................................         24          48          34           --          --          --         106
Interest-bearing deposits.......................      3,398       1,301         200           --          --          --       4,899
U.S. government agency securities...............         --         500          --          249          --          --         749
Mortgage-backed securities......................          8         146         289          265         577       1,136       2,421
Equity securities...............................         --          --          --           --          --         733         733
                                                  ---------   ---------   ---------    ---------   ---------   ---------   ---------
Total interest-earning assets...................  $   3,590   $   3,139   $   3,005    $   2,830   $   5,465   $   4,409   $  22,438
                                                  =========   =========   =========    =========   =========   =========   =========

Interest-bearing liabilities
----------------------------

Certificate accounts............................  $   3,050   $   6,648   $   2,609    $      --   $      --   $      --   $  12,307
Money market deposit accounts...................      2,801          --          --           --          --          --       2,801
Passbook accounts...............................      1,032          --          --           --          --          --       1,032
                                                  ---------   ---------   ---------    ---------   ---------   ---------   ---------
Total interest-bearing liabilities..............  $   6,883   $   6,648   $   2,609    $      --   $      --   $      --   $  16,140
                                                  =========   =========   =========    =========   =========   =========   =========

Interest-earning assets less interest-bearing
  liabilities...................................  $  (3,293)  $  (3,509)  $     396    $   2,830   $   5,465   $   4,409   $   6,298
                                                  =========   =========   =========    =========   =========   =========   =========

Cumulative interest-rate sensitivity gap........  $  (3,293)  $  (6,802)  $  (6,406)   $  (3,576)  $   1,889   $   6,298
                                                  =========   =========   =========    =========   =========   =========
Cumulative ratio of interest-earning assets
  to interest-bearing liabilities...............      52.16%      49.73%      60.31%       77.84%     111.70%     139.02%
                                                  =========   =========   =========    =========   =========   =========
Cumulative interest-rate sensitivity gap as
  a percentage of assets........................     (14.68)%    (30.31)%    (28.55)%     (15.94)%      8.42%      28.07%
                                                  =========   =========   =========    =========   =========   =========
</TABLE> 

          Share loans, interest-bearing deposits, and U.S. government agency
      securities are included in the period in which they mature. Equity
      securities, which have no specified maturity, are included in the over ten
      years period. Mortgage loans and mortgage-backed securities, all of which
      are fixed rate, are based on normal amortization plus estimated annual
      prepayments of 5%. Deposit certificate accounts are scheduled according to
      contractual maturities. Money market and passbook deposit accounts are
      included in the earliest period.

          Net Portfolio Value. In recent years, the Association has measured its
      interest rate sensitivity by computing the "gap" between the assets and
      liabilities which were expected to mature or reprice within certain
      periods, based on assumptions regarding loan prepayment and deposit decay
      rates formerly provided by the OTS. However, the OTS now requires the
      computation of amounts by which the net present value of an institution's
      cash flows from assets, liabilities and off balance sheet items (the
      institution's net portfolio value, or "NPV") would change in the event of
      a range of assumed changes in market interest rates. These computations
      estimate the effect on an institution's NPV from instantaneous and
      permanent 1% to 4% increases and decreases in market interest rates. In
      the Association's interest rate sensitive policy, the Board of Directors
      has established a maximum decrease in net interest income and maximum
      decreases in NPV given these instantaneous changes in interest rates.

                                       6
<PAGE>
 
     The following table sets forth the interest rate sensitivity of the
Association's net portfolio value as of September 30, 1997 in the event of 1%,
2%, 3% and 4% instantaneous and permanent increases and decreases in market
interest rates, respectively. These changes are set forth below as basis points,
where 100 basis points equals one percentage point.
<TABLE> 
<CAPTION> 

                             Net Portfolio Value                         NPV as % of Portfolio Value of Assets
 Change            ---------------------------------------               -------------------------------------
in Rates           $ Amount        $ Change       % Change               NPV Ratio       Basis Point Change
--------           --------        --------       --------               ---------       ------------------
                           (Dollars in thousands)
<S>                <C>             <C>            <C>                    <C>             <C> 
+ 400 bp               4,016        (1,832)            (31)%                19.91%             (625)
+ 300 bp               4,502        (1,346)            (23)                 21.70              (446)
+ 200 bp               4,999          (849)            (15)                 23.44              (272)
+ 100 bp               5,474          (374)             (6)                 25.00              (116)
    0 bp               5,848            --              --                  26.16                --
- 100 bp               6,014           166               3                  26.60                44
- 200 bp               6,043           195               3                  26.58                42
- 300 bp               6,119           271               5                  26.72                56
- 400 bp               6,262           414               7                  27.06                90
</TABLE> 

     The following table sets forth the interest rate risk capital component for
the Association at September 30, 1997 given a hypothetical 200 basis point rate
change in market interest rates.
<TABLE> 
<CAPTION> 
                                                                                September 30, 1997
                                                                                ------------------
<S>                                                                             <C> 
Pre-shock NPV Ratio: NPV as % of Portfolio Value of Assets...................           26.16%

Exposure Measure: Post-Shock NPV Ratio.......................................           23.44%

Sensitivity Measure: Change in NPV Ratio.....................................            (272) bp

Interest Rate Risk Capital Component ($000)..................................                  (1)
</TABLE> 
---------------------
(1)  Although this calculation is not applicable to the Association, the
     Association has a negative interest rate sensitivity gap which would
     adversely affect net interest income during a period of rising interest
     rates. The Association believes its high level of liquid assets would,
     however, allow the Association to address this negative impact.

     Computations of prospective effects of hypothetical interest rate changes
are based on numerous assumptions, including relative levels of market interest
rates and loan prepayments, and should not be relied upon as indicative of
actual results. Further, the computations do not contemplate any actions the
Association may undertake in response to changes in interest rates.

     Certain shortcomings are inherent in the method of analysis presented in
both the computation of NPV and in the analysis presented in prior tables
setting forth the maturing and repricing of interest-earning assets and 
interest-bearing liabilities. For example, although certain assets and
liabilities may have similar maturities or periods to repricing, they may react
in differing degrees to changes in market interest rates. The interest rates on
certain of assets and liabilities may fluctuate in advance of changes in market
interest rates, while interest rates on other assets and liabilities may lag
behind changes in market rates. Based on the above, net interest income should
decline with instantaneous increases in interest rates while net interest income
should increase with instantaneous declines in interest rates. Further, in the
event of a change in interest rates, prepayment and early withdrawal levels
would likely deviate significantly from those assumed in the tables.

                                       7
<PAGE>
 
     Rocky Ford Federal originates only fixed-rate real estate loans and holds
them in portfolio until maturity. Because Rocky Ford Federal's interest-bearing
liabilities which mature or reprice within short periods substantially exceed
its earning assets with similar characteristics, material and prolonged
increases in interest rates generally would adversely affect net interest
income, while material and prolonged decreases in interest rates generally, but
to a lesser extent because of their historically low levels, would have the
opposite effect. The Association's high level of liquid assets and investments
"available for sale" provides management with the flexibility to address this
interest rate sensitivity gap position.

AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES

     The following table sets forth certain information relating to the
Association's average interest-earning assets and interest-bearing liabilities
and reflects the average yield on assets and average cost of liabilities for the
periods and at the date indicated. Such yields and costs are derived by dividing
income or expense by the average monthly balance of assets or liabilities,
respectively, for the periods presented. Management does not believe that the
use of month-end balances instead of daily balances has caused any material
difference in the information presented.

     The table also presents information for the periods and at the date
indicated with respect to the difference between the average yield earned on
interest-earning assets and average rate paid on interest-bearing liabilities,
or "interest rate spread," which savings institutions have traditionally used as
an indicator of profitability. Another indicator of an institution's net
interest income is its "net yield on interest-earning assets," which is its net
interest income divided by the average balance of interest-earning assets. Net
interest income is affected by the interest rate spread and by the relative
amounts of interest-earning assets and interest-bearing liabilities. When
interest-earning assets approximate or exceed interest-bearing liabilities, any
positive interest rate spread will generate net interest income.

                                       8
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                 At September 30,     
                                                      1997        
                                               -------------------
                                                            Yield/    
                                               Balance       Cost     
                                               -------       ----
                                             (Dollars in thousands)
<S>                                          <C>          <C> 
Interest/dividend-earning assets:
  Interest-bearing deposits................  $    4,899     5.35%     
   Investments.............................       3,903     6.94      
   Loans...................................      13,530     8.23      
                                             ----------   ------      
Total interest-earning assets..............      22,332     7.38      
                                                                      
Non-interest-earning assets................         833               
                                             ----------               
Total assets...............................  $   23,165               
                                             ==========               

Interest-bearing liabilities:
   Passbook - money market accounts........  $    3,833     3.91      
   Certificates of deposit.................      12,307     5.50      
                                             ----------   ------      
Total interest-bearing liabilities.........      16,140     5.12      
                                                                      
Non-interest-bearing liabilities...........         577               
                                             ----------               
Total liabilities..........................      16,717               
                                                                      
Equity.....................................       6,448               
                                             ----------               
Total liabilities and equity...............  $   23,165               
                                             ==========               

Net interest/dividend income...............                           
                                                                      
Interest/dividend rate spread (1)..........                 2.25%     
                                                          ======      
Net interest/dividend-earning assets.......  $    6,192               
                                             ==========               
Net interest/dividend margin (2)...........                 3.67%     
                                                          ======      
Average interest/dividend-earning assets
  to average interest-bearing liabilities..      138.36%              
                                             ==========               
<CAPTION> 
                                                                        Year Ended September 30,
                                                ---------------------------------------------------------------------------
                                                                1997                                   1996
                                                -----------------------------------       ---------------------------------
                                                                            Average                                 Average
                                                Average                     Yield/        Average                   Yield/
                                                Balance       Interest       Cost         Balance     Interest       Cost
                                                -------       --------       ----         -------     --------       ----
                                                                         (Dollars in thousands)
<S>                                            <C>            <C>          <C>           <C>          <C>           <C> 
Interest/dividend-earning assets:
  Interest-bearing deposits................    $    4,251     $      262     6.16%       $   4,330    $      247     5.70%
   Investments.............................         3,846            271     7.05            3,676           248     6.75
   Loans...................................        12,847          1,114     8.67           11,730         1,030     8.78
                                               ----------     ----------   ------        ---------    ----------   ------
Total interest-earning assets..............        20,944          1,647     7.86           19,736         1,525     7.73
                                                              ==========   ======                     ==========   ======
Non-interest-earning assets................           635                                      405
                                               ----------                                ---------
Total assets...............................    $   21,579                                $  20,141
                                               ==========                                =========

Interest-bearing liabilities:
   Passbook - money market accounts........    $    4,932            150     3.04        $   4,120           143     3.47
   Certificates of deposit.................        12,535            677     5.40           12,873           677     5.26
                                               ----------     ----------   ------        ---------    ----------   ------
Total interest-bearing liabilities.........        17,467            827     4.73           16,993           820     4.83
                                                              ==========   ======                     ==========   ======
Non-interest-bearing liabilities...........           483                                      476
                                               ----------                                ---------
Total liabilities..........................        17,950                                   17,469
                                               ----------                                ---------
Equity.....................................         3,629                                    2,672
                                               ----------                                ---------
Total liabilities and equity...............    $   21,579                                $  20,141
                                               ==========                                =========
Net interest/dividend income...............                   $      820                              $      705
                                                              ==========                              ==========
Interest/dividend rate spread (1)..........                                  3.13%                                   2.90%
                                                                           ======                                  ======
Net interest/dividend-earning assets.......    $    3,477                                $   2,743
                                               ==========                                =========
Net interest/dividend margin (2)...........                                  3.92%                                   3.57%
                                                                           ======                                  ======
Average interest/dividend-earning assets
  to average interest-bearing liabilities..        119.91%                                  116.14%
                                               ==========                                =========
</TABLE> 
--------------
(1)  Includes nonaccrual loans.

                                       9
<PAGE>
 
RATE/VOLUME ANALYSIS

     The following table sets forth certain information regarding changes in
interest income and interest expense of the Association for the periods
indicated. For each category of interest-earning asset and interest-bearing
liability, information is provided on changes attributable to: (i) changes in
volume (changes in volume multiplied by old rate); (ii) changes in rate (changes
in rate multiplied by old volume); and (iii) changes in rate/volume (changes in
rate multiplied by changes in volume).
<TABLE> 
<CAPTION> 
                                                                      Year Ended June 30,
                                                      -------------------------------------------------
                                                                1997          vs.         1996
                                                      -------------------------------------------------
                                                                   Increase (Decrease) Due to
                                                      -------------------------------------------------
                                                                                Rate/
                                                      Volume         Rate      Volume           Total
                                                      ------         ----      ------           -----
                                                                          (In thousands)
<S>                                                   <C>          <C>         <C>            <C> 
Interest income:
  Interest-bearing deposits.........................  $    (5)     $    20     $     --       $    15
  Investments.......................................       11           11            1            23
  Loans.............................................       98          (13)          (1)           84
                                                      -------      -------     --------       -------
    Total interest-earning assets...................      104           18           --           122
                                                      -------      -------     --------       -------
Interest-bearing liabilities:
  Deposits..........................................       23          (17)           1             7
                                                      -------      -------     --------       -------

  Increase (decrease) in net interest income........  $    81      $    35     $     (1)      $   115
                                                      =======      =======     ========       =======
</TABLE> 

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 1997 AND 1996

     The Association's total assets increased by $2,777,000 from September 30,
1996 to September 30, 1997, with the majority of the increase reported in loans
receivable and cash accounts.

     The Association's loan portfolio increased by $1,200,000 during the year
ended September 30, 1997. Net loans totaled $13.5 million and $12.4 million at
September 30, 1997 and 1996, respectively. The increase in the loan activity
during the year ended September 30, 1997 is due to increased loan demand in the
Association's market area. The allowance for loan losses totaled $60,000 at
September 30, 1997 and 1996. As of those dates, the Association had no non-
performing loans in its portfolio. There were no loans charged off or recoveries
of previous loan losses during the year ended September 30, 1997 and 1996. At
September 30, 1996, the ratio of the allowance for loan losses to net loans was
 .49% as compared to .44% at September 30, 1997. The decrease in the ratio is
attributable to loan growth.

     At September 30, 1997, the Association's investment portfolio included
mortgage-backed and government securities classified as "held to maturity"
carried at amortized cost of $3.2 million and estimated fair value of $3.3
million, and equity securities classified as "available for sale" with an
estimated fair value of $409,000. The balance of the Association's investment
portfolio at September 30, 1997 consisted of interest-bearing deposits totaling
$4.9 million.

     At September 30, 1997 deposits decreased to $16.1 million from $17.1
million at September 30, 1996, or a net decrease of 5.86%. Certificates of
deposit at September 30, 1997 and 1996 included approximately $2.1 million and
$1.5 million, respectively, of deposits with balances of $100,000 or more.

                                      10
<PAGE>
 
     The allowance for loan losses totaled $60,000 at September 30, 1997 and
1996. As of those dates the Association did not have any non-performing loans in
its portfolio. There were no loans charged off or recoveries of previous loan
losses during the year ended September 30, 1997 and 1996. The determination of
the allowance for loan losses is based on management's analysis, performed on a
quarterly basis. Various factors are considered, including the market value of
the underlying collateral, growth and composition of the loan portfolio, the
relationship of the allowance for loan losses to outstanding loans, historical
loss experience, delinquency trends and prevailing economic conditions. Although
management believes its allowance for loan losses is adequate, there can be no
assurance that additional allowances will not be required or that losses on
loans will not be incurred. The Association has had minimal losses on loans in
prior years. At September 30, 1997, the ratio of the allowance for loan losses
to net loans was .44% as compared to .49% at September 30, 1996. The decrease in
the ratio is attributed to loan growth for the year ended September 30, 1997.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED SEPTEMBER 30, 1997 AND 1996

     Net Income.  The consolidated net income for the year ended September 30,
1997 was $93,345 compared to $128,542 for the year ended September 30, 1996. The
decrease in net income is attributed to the recognition or retirement expense of
approximately $249,000, less the effect of increased interest earnings and not
having the SAIF special assessment of $106,000.

     Net Interest Income.  Net interest income for 1997 was $820,486 compared to
$704,906 for 1996. The increase is attributed to the increase in the net
interest rate spread of 3.92% for the year ended September 30, 1997 from 2.90%
for the year ended September 30, 1996.

     Interest Income.  Interest income for 1997 was $1,647,073 compared to
$1,525,337 for 1996. The increase is attributed to the additional funds
available from the issuance of stock, increased loans receivable and the
increase in the net yield on average interest-earning assets from 3.57% to
3.92%. Interest-earning assets increased from $19.9 million to $22.3 million.

     Interest Expense.  Interest expense increased to $826,587 from $820,431.
The average interest cost on certificates of deposit as of September 30, 1997
was 5.40% compared to 5.26% for 1996. The decrease in savings accounts was
approximately $516,000 in money market accounts, and $489,000 in certificate of
deposit accounts.

     Provision for Loan Losses.  The Company determined that a provision for
loan losses was not required for the year ended September 30, 1997, based on
management's evaluation of the risk inherent in its loan portfolio, the lack of
non-performing loans and the general economy of the area.

     Non-Interest Expense.  The increase in non-interest expense of $189,000 is
primarily attributed to $249,000 retirement expenses recognized in accordance
with the retirement plan adopted by the board in the current year less the
special SAIF assessment incurred in 1996 in the amount of $106,000.

LIQUIDITY AND CAPITAL RESOURCES

     The Company initially has no business other than that of the Association
and investing the net proceeds retained by it. The Association is subject to
certain regulatory limitations with respect to the payment of dividends to the
Company. The Company intends to lend a portion of the net proceeds retained from
the Conversion to the ESOP to permit its purchase of Common Stock in the
Conversion.

     At September 30, 1997, the Association exceeded all regulatory minimum
capital requirements.

     The Association's primary sources of funds consists of deposits, repayment
of loans and mortgage-backed securities, maturities of investments and interest-
bearing deposits, and funds provided from operations. While scheduled repayments
of loans and mortgage-backed securities and maturities of investment securities
are predicable sources of

                                      11
<PAGE>
 
funds, deposit flows and loan prepayments are greatly influenced by the general
level of interest rates, economic conditions and competition. The Association
uses its liquidity resources principally to fund existing and future loan
commitments, to fund maturing certificates of deposit and demand deposit
withdrawals, to invest in other interest-earning assets, to maintain liquidity,
and to meeting operating expenses. Management believes that loan repayments and
other sources of funds will be adequate to meet the Association's liquidity
needs for the immediate future.

     The Association is required to maintain minimum levels of liquid assets as
defined by OTS regulations. This requirement, which may be varied at the
direction of the OTS depending upon economic conditions and deposit flows, is
based upon a percentage of deposits and short-term borrowings. The required
minimum ratio is currently 5%. The Association has historically maintained a
level of liquid assets in excess of regulatory requirements. The Association's
liquidity ratios at September 30, 1997 and 1996 were 20% and 27%, respectively.
The Association's relatively high liquidity ratios at September 30, 1997 and
1996 were reflective of accelerated loan prepayments, and management's
determination to refrain from investing excess liquidity in assets with longer
terms.

     A major portion of the Association's liquidity consists of cash and cash
equivalents, which include investments in highly liquid, short-term deposits.

     The level of these assets is dependent on the Association's operating,
investing, lending and financing activities during any given period. At
September 30, 1997, cash and cash equivalents totaled $5.2 million.

     The primary investing activities of the Association include origination of
loans and purchase of investment securities. During the year ended September 30,
1997, purchases of investment securities and mortgage-backed securities totaled
$248,000, while loan originations totaled $3.9 million. These investments were
funded in part by loan and mortgage-backed securities prepayments of $2.7
million.

     Liquidity management is both a daily and long-term function of business
management. If the Association requires funds beyond its ability to generate
them internally, the Association believes that it could borrow funds from the
FHLB. At September 30, 1997, the Association had no outstanding advances from
the FHLB.

     At September 30, 1997, the Association had $194,400 in outstanding
commitments to originate fixed-rate loans. The interest rate on the commitments
ranged from 7.65% to 8.50%, and are held open for ninety days. The Association
anticipates that it will have sufficient funds available to meet its current
loan origination commitments. Certificates of deposit which are scheduled to
mature in one year or less totaled $9.7 million at September 30, 1997. Based on
historical experience, management believes that a significant portion of such
deposits will remain with the Association.

IMPACT OF INFLATION AND CHANGING PRICES

     The Consolidated Financial Statements and Notes thereto presented herein
have been prepared in accordance with generally accepted accounting principles,
which require the measurement of financial position and operating results in
terms of historical dollars without considering the change in the relative
purchasing power of money over time and due to inflation. The impact of
inflation is reflected in the increased cost of the Association's operations.
Unlike most industrial companies, nearly all the assets and liabilities of the
Company are monetary. 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.

IMPACT OF NEW ACCOUNTING STANDARDS

     See Financial Statements Note 15.

                                      12
<PAGE>
 
                       CONSOLIDATED FINANCIAL STATEMENTS
                  ROCKY FORD FINANCIAL, INC. AND SUBSIDIARIES
<TABLE> 
<CAPTION> 
                                                                                Page
<S>                                                                             <C> 
Independent Auditors' Report                                                      14

Statements of Financial Condition September 30, 1997 and 1996                     15

Statements of Income for the Years Ended September 30, 1997 and 1996              16

Statements of Equity for the Years Ended September 30, 1997 and 1996              17

Statements of Cash Flows for the Years Ended September 30, 1997 and 1996          18

Notes to Consolidated Financial Statements                                        19
</TABLE> 


                                      13
<PAGE>
 
                          INDEPENDENT AUDITORS' REPORT


Board of Directors
Rocky Ford Financial, Inc.
Rocky Ford, Colorado

We have audited the accompanying consolidated statements of financial condition
of Rocky Ford Financial, Inc. And Subsidiary as of September 30, 1997 and 1996,
and the related consolidated statements of income, equity, and cash flows for
the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated 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 financial position of Rocky Ford
Financial, Inc. And Subsidiary as of September 30, 1997 and 1996, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.









                                     GRIMSLEY, WHITE & COMPANY





November 21, 1997

                                      14
<PAGE>
 
                    ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

                           SEPTEMBER 30, 1997 AND 1996
<TABLE> 
<CAPTION> 

                            ASSETS                                                       1997              1996
                                                                                  ------------------------------------
<S>                                                                                   <C>               <C> 
Cash and cash equivalents
   Interest - bearing                                                                 $  2,900,000      $  2,000,000
   Non - interest bearing                                                                  305,382           221,416
Certificates of deposit                                                                  1,999,312         1,897,000
Securities available for sale
     Equity securities (amortized cost of $11,327)                                         409,218           282,300
Securities held to maturity
     Mortgage-backed securities (estimated market value of $2,537,400
         and $2,660,700)                                                                 2,421,308         2,616,767
     U.S. agencies (estimated market value of $748,000 and $488,600)                       748,965           500,000
Loans receivable - net                                                                  13,529,566        12,286,909
Federal Home Loan Bank stock, at cost                                                      323,500           302,400
Retirement trust assets                                                                    251,687                 -
Accrued interest receivable                                                                146,769           125,018
Premises and equipment                                                                      83,270            98,672
Prepaids                                                                                    45,910            57,611
                                                                                  -----------------  ----------------

            TOTAL ASSETS                                                              $ 23,164,887      $ 20,388,093
                                                                                  =================  ================
                    LIABILITIES AND EQUITY
Deposits                                                                              $ 16,139,404      $ 17,144,638
Advances from borrowers for taxes and insurance                                             35,562            41,778
Accounts payable and accrued expenses                                                      372,700           273,217
Deferred income taxes                                                                      169,400           150,200
                                                                                  -----------------  ----------------

            TOTAL LIABILITIES                                                           16,717,066        17,609,833
                                                                                  -----------------  ----------------
Commitments and contingencies

Preferred stock- $.01 par value; authorized 1,000,000
   shares; no shares issued or outstanding                                                       -                 -
Common stock-$.01 par value; authorized 3,000,000 shares;
   issued and outstanding 423,200 shares                                                     4,232                 -
Paid-in capital                                                                          3,830,582                 -
Retained earnings - substantially restricted                                             2,700,923         2,607,578
Net unrealized gain on securities available for sale,
   net of tax of $147,250 and $100,300                                                     250,644           170,682
Note receivable from ESOP Trust                                                           (338,560)                -
                                                                                  -----------------  ----------------

            TOTAL EQUITY                                                                 6,447,821         2,778,260
                                                                                  -----------------  ----------------

            TOTAL LIABILITIES AND EQUITY                                              $ 23,164,887      $ 20,388,093
                                                                                  =================  ================
</TABLE> 

                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      15
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME

                    YEARS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE> 
<CAPTION> 
                                                                            1997             1996
                                                                    --------------- ----------------
<S>                                                                    <C>              <C> 
INTEREST INCOME                                                    
      Loans receivable                                                 $ 1,113,803      $ 1,030,195
      Securities available for sale                                         25,679           23,499
      Securities held to maturity                                          246,067          224,192
      Other interest-bearing assets                                        261,524          247,451
                                                                      -------------    -------------
                                                                   
                  TOTAL INTEREST INCOME                                  1,647,073        1,525,337
                                                                   
INTEREST ON DEPOSITS                                                       826,587          820,431
                                                                      -------------    -------------
                                                                   
                  NET INTEREST INCOME                                      820,486          704,906
                                                                   
PROVISION FOR LOAN LOSSES                                                        -                -
                                                                      -------------    -------------
                  NET INTEREST INCOME AFTER                        
                        PROVISION FOR LOAN LOSSES                          820,486          704,906
                                                                      -------------    -------------
NON-INTEREST INCOME                                                
      Other charges                                                         31,151           16,585
      Gain on sale of foreclosed real estate                                     -            4,157
                                                                      -------------    -------------
                                                                   
                  TOTAL NON-INTEREST INCOME                                 31,151           20,742
                                                                      -------------    -------------
NON-INTEREST EXPENSE                                               
      GENERAL AND ADMINISTRATIVE                                   
            Compensation and benefits                                      525,646          231,849
            Occupancy and equipment                                         35,905           38,703
            Computer services                                               33,510           30,202
            SAIF deposit insurance                                          23,132           45,026
            Other                                                          109,533           87,022
            Special SAIF assessment                                              -          105,929
                                                                      -------------    -------------
                                                                   
                  TOTAL NON-INTEREST EXPENSE                               727,726          538,731
                                                                      -------------    -------------
                                                                   
                  INCOME BEFORE TAXES                                      123,911          186,917
                                                                   
PROVISION FOR INCOME TAXES                                                  30,566           58,375
                                                                      -------------    -------------
                                                                   
                  NET INCOME                                           $    93,345      $   128,542
                                                                      =============    =============
                                                                   
EARNINGS PER COMMON SHARE                                              $      0.26
                                                                      =============    
</TABLE> 
Based on income allocated from May 21, 1997

                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      16
<PAGE>

                          ROCKY FORD FINANCIAL, INC.

                       CONSOLIDATED STATEMENTS OF EQUITY

                    YEARS ENDED SEPTEMBER 30, 1997 AND 1996

<TABLE> 
<CAPTION> 

                                                                                                           NET
                                                                                                        UNREALIZED
                                                                                                           GAIN
                                                                                                            ON
                                                                            NOTE                        SECURITIES
                                            COMMON         PAID-IN       RECEIVABLE       RETAINED      AVAILABLE-
                                             STOCK         CAPITAL          ESOP          EARNINGS       FOR-SALE
                                         -------------- --------------- --------------- --------------- --------------
<S>                                      <C>             <C>             <C>             <C>             <C> 
BALANCES, OCTOBER 1, 1995                $          -    $           -   $          -     $ 2,479,036    $    94,261

      Net income for the year                                                                 128,542              -

     Change in net unrealized gain on
         securities available-for-sale, net
         of taxes of $47,000                                                        -                -        76,421
                                         -------------- --------------- --------------- --------------- --------------

BALANCES, SEPTEMBER 30, 1996                        -                -              -       2,607,578        170,682

      Net income for the year                                                                  93,345

     Change in net unrealized gain on
         securities available-for-sale, net
         of taxes of $46,900                                                                                  79,962

     Proceeds from issuance of stock,
         net of conversion costs
         of $410,186                             4,232       3,479,022

     Purchase of common stock by ESOP                          338,560       (338,560)

     ESOP contribution                                          13,000
                                         -------------- --------------- --------------- --------------- --------------

BALANCES, SEPTEMBER 30, 1997             $       4,232   $   3,830,582   $   (338,560)    $ 2,700,923    $   250,644
                                         ============== =============== =============== =============== ==============


</TABLE> 










                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      17
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                    YEARS ENDED SEPTEMBER 30, 1997 AND 1996

<TABLE> 
<CAPTION> 
                                                                                             1997           1996
                                                                                       --------------  --------------
<S>                                                                                    <C>             <C>  
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                                                            $ 93,345       $ 128,542
                                                                                       --------------  --------------
      Adjustments to reconcile net income to net cash provided 
            by operating activities:
      Amortization of:
            Deferred loan origination fees                                                   (15,149)        (16,803)
            Discounts on investments                                                          (2,221)        (16,965)
      Stock dividend received from FHLB                                                      (21,100)        (18,600)
      Gain on foreclosed real estate                                                               -          (1,966)
      ESOP market value expense                                                               13,000               -
      Depreciation                                                                            20,032          21,341
      Change in assets and liabilities:
            Accrued interest receivable                                                      (21,751)         33,850
            Prepaids                                                                          11,701         (14,284)
            Accounts payable and accrued expenses                                             99,483          81,976
            Current income taxes                                                                   -          (6,182)
            Deferred income                                                                        -          (2,191)
            Deferred income taxes                                                            (27,756)        (23,091)
                                                                                       --------------  --------------

            TOTAL ADJUSTMENTS                                                                 56,239          37,085
                                                                                       --------------  --------------

            NET CASH PROVIDED BY OPERATING ACTIVITIES                                        149,584         165,627
                                                                                       --------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Net change in certificates of deposit                                                 (102,312)        686,000
      Loan originations and principal payments on loans                                   (1,227,508)     (1,329,596)
      Purchase of investment securities held to maturity                                    (248,828)       (584,269)
      Proceeds from maturities of investment securities held to maturity                           -       2,800,000
      Purchase of mortgage-backed securities                                                       -      (1,488,125)
      Principal payments on mortgage-backed securities                                       197,543         245,760
      Capital purchases                                                                       (4,630)        (32,468)
      Proceeds from sale of foreclosed real estate                                                 -          63,123
      Establishing retirement plan trust                                                    (251,687)              -
                                                                                       --------------  --------------

            NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES                              (1,637,422)        360,425
                                                                                       --------------  --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Issuance of common stock                                                             3,483,254               -
      Net change in deposits                                                              (1,005,234)        442,513
      Net change in mortgage escrow funds                                                     (6,216)         (7,512)
                                                                                       --------------  --------------

            NET CASH PROVIDED BY FINANCING ACTIVITIES                                      2,471,804         435,001
                                                                                       --------------  --------------
            NET INCREASE IN CASH AND CASH EQUIVALENTS                                        983,966         961,053

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                             2,221,416       1,260,363
                                                                                       --------------  --------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                                 $ 3,205,382     $ 2,221,416
                                                                                       ==============  ==============


SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
Cash paid for:
     Taxes                                                                                  $ 41,472       $ 103,319
     Interest                                                                                158,527         148,188

</TABLE> 
                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      18
<PAGE>
 
                    ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE - 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              The following is a description of the more significant accounting
              policies which Rocky Ford Financial, Inc. (the Company) and its
              wholly owned subsidiary, Rocky Ford Federal Savings and Loan
              Association (the Association) follow in preparing and presenting
              the consolidated financial statements.

              Basis of Presentation
              The consolidated financial statements include the accounts of the
              Company and its wholly owned subsidiary Rocky Ford Federal Savings
              and Loan Association. All significant intercompany accounts and
              transactions have been eliminated.

              Organization
              Rocky Ford Federal Savings and Loan Association (the Association)
              is a federally chartered mutual association which conducts its
              operations in Southeastern Colorado. The Association provides a
              variety of financial services to the area it serves. Its primary
              deposit products are certificates of deposit and its primary
              lending products are real estate mortgages.

              The Company's purpose is to act as a holding company with the
              Association as its sole subsidiary. The Company's principal
              business is the business of the Association and holding
              investments.

              Savings deposits of the Association are insured by the Federal
              Deposit Insurance Corporation ("FDIC") up to certain limitations.
              The Association pays a premium to the FDIC for the insurance of
              such savings.

              Use of Estimates
              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 revenues and expenses during the reporting
              period. Actual results could differ from those estimates.

              Cash Equivalents
              Cash equivalents consist of overnight deposits and funds due from
              banks. For purposes of the statements of cash flows, the
              Association considers all highly liquid debt instruments with
              original maturities, when purchased, of three months or less to be
              cash equivalents.

              Certificates of Deposit
              The Association maintains certificates of deposit with financial
              institutions across the United States. It is the policy of the
              Association to limit deposits to insurable accounts.





                                      19
<PAGE>
 
                    ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE - 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
              Securities Held-to-Maturity
              Mortgage-backed securities and related debt investments for which
              the Association has the positive intent and ability to hold to
              maturity are reported at cost, adjusted for amortization of
              premiums and accretion of discounts which are recognized in
              interest income using the interest method over the period to
              maturity.

              Securities Available-for-Sale
              Securities available-for-sale consist of equity securities, not
              classified as trading securities, which are carried at fair value.

              Unrealized holding gains and losses, net of tax, on securities
              available-for-sale are reported as a net amount in a separate
              component of equity until realized.

              Gains and losses on the sale of securities available-for-sale are
              determined using the specific-identification method.

              Declines in the fair value of individual held-to-maturity and
              available-for-sale securities below their cost, that are other
              than temporary, would result in write-downs of the individual
              securities to their fair value. Should the Association incur
              write-downs, they will be included in earnings as realized losses.

              Premiums and discounts are recognized in interest income using the
              interest method over the period to maturity.

              Federal Home Loan Bank (FHLB) stock is an equity interest in the
              FHLB of Topeka. The Association, as a member of the FHLB, is
              required to maintain an investment in the capital stock of the
              FHLB. The stock is carried at cost, as its cost is assumed to
              equal its market value, since if the Association withdraws
              membership in the FHLB, the stock must be redeemed for face value.
              The FHLB declares cash and stock dividends. The stock dividends
              are recognized as income due to the fact they are redeemable at
              par value ($100 per share).

              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.

              Loan origination and commitment fees, as well as certain direct
              origination costs, are deferred and amortized as a yield
              adjustment over the lives of the related loans using the interest
              method. Amortization of deferred loan fees is discontinued when a
              loan is placed on nonaccrual status.

              Loans are placed on nonaccrual status when the principal and
              interest is delinquent for 90 days or more. Uncollectible interest
              on these loans is charged off, or an allowance is established,
              based on management's periodic evaluation, by a charge to interest
              income equal to all interest previously accrued. Income is
              subsequently recognized only to the extent that cash payments are
              received.

                                      20
<PAGE>
 
                    ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE - 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
              Allowance for Loan Losses
              The allowance for loan losses is maintained at a level which, in
              management's judgment, is adequate to absorb potential losses
              inherent in the loan portfolio. The amount of the allowance is
              based on management's evaluation of the collectibility of the loan
              portfolio, including the nature of the portfolio, credit
              concentrations, specific impaired loans, and economic conditions.
              The allowance is increased by a provision for loan losses, which
              is charged to expense, and reduced by charge-offs, net of
              recoveries. Such provisions are based on management's estimate of
              net realizable value or fair value of the collateral, as
              applicable. These estimates are susceptible to economic changes
              that could result in a material adjustment to results of
              operations in the near term. Recovery of the carrying value of
              such loans is dependent, to a great extent, on the economic,
              operational, and other conditions that may be beyond the
              Association's control.

              Real Estate Held for Investment and Foreclosed Real Estate
              Direct investments in real estate properties held for investment
              are carried at lower of cost, including cost of improvements and
              amenities subsequent to acquisition, or net realizable value.

              Foreclosed real estate held for sale is carried at the lower of
              fair value minus estimated costs to sell or cost (the fair value
              of the foreclosed asset at the time of foreclosure). Costs of
              holding foreclosed property are charged to expense in the current
              period, except for significant property improvements, which are
              capitalized to the extent that carrying value does not exceed
              estimated fair market value.

              Income Taxes
              Income taxes are recognized under SFAS No. 109 Accounting for
              Income Taxes. Under the provisions of SFAS No. 109, deferred tax
              assets and liabilities are recorded based on the differences
              between the financial statement and the tax basis of assets and
              liabilities and the tax rates which will be in effect when these
              differences are expected to reverse. If appropriate, deferred tax
              assets are reduced by a valuation allowance which reflects the
              extent to which such assets will be realized.

              Premises and Equipment
              Land is carried at cost. Building, furniture, fixtures, and
              equipment are carried at cost, less accumulated depreciation.
              Building, furniture, fixtures, and equipment are depreciated using
              the straight-line method over the estimated useful lives of the
              assets.

              Fair Values of Financial Instruments
              The following methods and assumptions were used in estimating fair
              values of financial instruments as disclosed herein:

              Cash and short-term instruments. The carrying amounts of cash and
              short-term instruments approximate fair values.




                                      21
<PAGE>
 
                    ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE - 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
              Fair Values of Financial Instruments (Continued)
              Available-for-sale and held-to-maturity securities. Fair values
              for securities, excluding restricted equity securities, are based
              on quoted market prices. The carrying values of restricted equity
              securities approximate fair values.

              Loans receivable. Fair values for mortgage loans is estimated
              using discounted cash flow analysis, using interest rates
              currently being offered for loans with similar terms to borrowers
              of similar credit quality. Fair values for impaired loans are
              estimated using discounted cash flow analysis or underlying
              collateral values, where applicable.

              Deposit liabilities. The carrying amounts of passbook savings and
              money-market accounts approximate their fair values at the
              reporting date. Fair values for fixed-rate CDs 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 on time deposits.

NOTE - 2      INVESTMENT SECURITIES

              Investment securities are summarized as follows:

              Held-to-Maturity Securities
              The amortized cost and estimated fair value of held-to-maturity
              securities at September 30, 1997 and 1996 are as follows:


<TABLE> 
<CAPTION> 
                                                                           Gross            Gross
                                                       Amortized        Unrealized        Unrealized            Fair
                 1997                                    Cost              Gains            Losses             Value
              -----------                           --------------    --------------    --------------    --------------
              <S>                                   <C>               <C>               <C>               <C> 
              Mortgage-backed securities
                GNMA certificates                   $    2,421,308    $      116,059    $            0    $    2,537,367
              U.S. Government Agencies                     748,965                 0              (997)          747,968
                                                    --------------    --------------    --------------    --------------

                                                    $    3,170,273    $      116,059    $         (997)   $    3,285,335
                                                    ==============    ==============    ==============    ==============

<CAPTION> 

                 1996
              ----------- 
              <S>                                   <C>               <C>               <C>               <C> 
              Mortgage-backed securities
                GNMA certificates                   $    2,616,767    $       67,099    $      (23,161)   $    2,660,705
              U.S. Government Agencies                     500,000                 0           (11,406)          488,594
                                                    --------------    --------------    --------------    --------------

                                                    $    3,116,767    $       67,099    $      (34,567)   $    3,149,299
                                                    ==============    ==============    ==============    ==============
</TABLE> 





                                      22
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  - 2     INVESTMENT SECURITIES (Continued)


              Available-for-Sale Securities
              The amortized cost and estimated fair value of available-for-sale
              securities at September 30, 1997 and 1996 were as follows:

<TABLE> 
<CAPTION> 

                                                                           Gross            Gross
                                                       Amortized        Unrealized        Unrealized            Fair
                 1997                                    Cost              Gains            Losses             Value
              -----------                           --------------    --------------    --------------    --------------
              <S>                                   <C>               <C>               <C>               <C> 
              Equity securities

                FHLMC stock                         $       11,327    $      397,891    $            0    $      409,218
                                                    ==============    ==============    ==============    ==============


                 1996
              -----------
              Equity securities

                FHLMC stock                         $       11,327    $      270,973    $            0    $      282,300
                                                    ==============    ==============    ==============    ==============
</TABLE> 

              The amortized cost of debt securities at September 30, 1997, by
              contractual maturity, are shown below. The Association's debt
              securities held-to-maturity are mortgage-backed securities whose
              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.

<TABLE> 
<CAPTION> 

                                                               Amortized
              Held-to-Maturity Debt Securities                     Cost
              --------------------------------                 -------------
              <S>                                              <C> 
              Due in one year or less                          $     530,953
              Due after one year through five years                  402,291
              Due from five to ten years                             280,507
              Due after ten years                                  1,956,522
                                                               -------------

                  Total Held-to-Maturity Securities            $   3,170,273
                                                               =============
</TABLE> 


              GNMA  Certificates  with a carrying  amount of  $232,638  and  
              $231,259 at  September  30, 1997 and 1996, respectively, were 
              pledged to secure public deposits.







                                      23
<PAGE>
 
                    ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE - 3      LOANS RECEIVABLE
              Loans receivable at September 30 are summarized as follows:

<TABLE> 
<CAPTION> 
                                                                                 1997                    1996
                                                                           ---------------         --------------- 
              <S>                                                          <C>                     <C> 
              First mortgage loans
                 (principally conventional):
                 Principal balances:
                     Secured by one-to-four-family
                         residences                                        $    13,320,764         $    12,056,769
                     Secured by other properties                                   138,567                 173,626
                                                                           ---------------         --------------- 

                                                                                13,459,331              12,230,395
              Less:
                 Net deferred loan origination fees                                (46,093)                (61,242)
                                                                           ---------------         --------------- 

                     Total first mortgage loans                                 13,413,238              12,169,153
                                                                           ---------------         --------------- 

              Second mortgage and share loans 
                 Principal balances:
                     Second mortgage                                                70,207                  75,487
                     Share                                                         106,121                 102,269
                                                                           ---------------         --------------- 

                         Total second mortgages and share loans                    176,328                 177,756
                                                                           ---------------         --------------- 

              Less:
                 Allowance for loan losses                                         (60,000)                (60,000)
                                                                           ---------------         --------------- 

                                                                           $    13,529,566         $    12,286,909
                                                                           ===============         =============== 
</TABLE> 

              Activity in the allowance for loan losses is summarized as follows
              for the years ended September 30:

<TABLE> 
<CAPTION> 
                                                                                 1997                    1996
                                                                           ---------------         --------------- 
              <S>                                                          <C>                     <C> 
              Balance at beginning of year                                 $        60,000         $        60,000
              Provision (recovery) charged to income                                     0                       0
              Charge-offs and recoveries, net                                            0                       0
                                                                           ---------------         --------------- 

                     Balance at end of year                                $        60,000         $        60,000
                                                                           ===============         =============== 
</TABLE> 

              Nonaccrual loans for which interest has been reserved totaled $0
              at September 30, 1997 and 1996, respectively. Interest income in
              the amount of $0 has been reserved at September 30, 1997 and 1996.

              As of September 30, 1997 the Association had outstanding firm
              commitments to originate loans of approximately $194,400.



                                      24
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE -4      ACCRUED INTEREST RECEIVABLE
             Accrued interest receivable at September 30 is summarized as
             follows:
<TABLE> 
<CAPTION>
                                                                                  1997                     1996
                                                                              ------------             ------------
              <S>                                                             <C>                      <C> 
              Certificates of deposit                                         $     22,508             $      5,325
              Investment securities                                                 13,177                   11,875
              Mortgaged-backed securities                                           16,779                   18,144
              Loans receivable                                                      94,305                   89,674
                                                                              ------------             ------------

                                                                              $    146,769             $    125,018
                                                                              ============             ============
</TABLE> 

NOTE  -5      PREMISES AND EQUIPMENT
              Premises and equipment at September 30 are summarized as follows:

<TABLE> 
<CAPTION> 
                                                                                   1997                    1996
                                                                              ------------             ------------
              <S>                                                             <C>                      <C> 
              Land                                                              $   10,000              $    10,000
              Buildings                                                            119,666                  119,666
              Furniture and fixtures                                               102,071                  100,934
              Automobile                                                            34,963                   34,963
                                                                              ------------             ------------

                                                                                   266,700                  265,563
              Less accumulated depreciation                                       (183,430)                (166,891)
                                                                              ------------             ------------

                                                                                $   83,270              $    98,672
                                                                              ============             ============
</TABLE> 
              Depreciation expense charged to operations amounted to $20,032 and
              $21,341 for the years ended September 30, 1997 and 1996.

NOTE  -6      DEPOSITS
              Deposits at September 30 are summarized as follows:
<TABLE> 
<CAPTION> 
                                    RATE AT                       1997                          1996
                                  SEPTEMBER 30,           AMOUNT        PERCENT         AMOUNT         PERCENT
                                  -------------           ------        -------         ------         -------
              <S>              <C>                   <C>                <C>          <C>               <C> 
              Money market            3.70%          $    2,800,821        17.36     $    3,270,990        19.08
              Passbook savings        2.85%               1,031,781         6.39          1,077,717         6.28
                                                     --------------       ------     --------------      -------

                                                          3,832,602        23.75          4,348,707        25.36
                                                     --------------       ------     --------------      -------
              Certificates of
                 deposit             3% - 4%                224,449         1.39            423,765         2.47
                                     4% - 5%              4,614,701        28.59          4,565,453        26.63
                                     5% - 6%              6,738,968        41.75          7,745,816        45.18
                                     6% - 7%                696,266         4.31                  0         0.00
                                     7% - 8%                 32,418          .21             60,897          .36
                                                     --------------       ------     --------------      -------

                                                         12,306,802        76.25         12,795,931        74.64
                                                     --------------       ------     --------------      -------

                                                     $   16,139,404       100.00     $   17,144,638       100.00
                                                     ==============      =======     ==============       ======
</TABLE> 

                                      25
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  -6      DEPOSITS (Continued)

              The aggregate amount of jumbo certificates of deposit with a
              minimum denomination of $100,000 was approximately $2,068,000 and
              $1,512,000 at September 30, 1997 and 1996.

              At September 30, 1997, scheduled maturities of certificates of
              deposits are as follows:
<TABLE> 
<CAPTION> 
                  Rate                                    1998               1999                2000
               ------------                           ------------        ------------        ------------
               <S>                                    <C>                 <C>                 <C> 
                3% - 4%                               $    224,449        $          0        $          0
                4% - 5%                                  4,614,701                   0                   0
                5% - 6%                                  4,162,296           1,627,065             949,607
                6% - 7%                                    696,266                   0                   0
                7% - 8%                                          0              32,418                   0
                                                      ------------        ------------        ------------

                                                      $  9,697,712        $  1,659,483        $    949,607
                                                      ============        ============        ============
</TABLE> 
              Interest expense on deposits for years ended September 30 is
              summarized as follows:
<TABLE> 
<CAPTION> 
                                                                                  1997                    1996
                                                                            --------------          ---------------
              <S>                                                           <C>                     <C> 
              Money market                                                  $      121,332          $       112,054
              Passbook savings                                                      28,160                   31,557
              Certificates of deposit                                              677,095                  676,820
                                                                            --------------          ---------------

                                                                            $      826,587          $       820,431
                                                                            ==============          ===============
</TABLE> 
NOTE  -7      INCOME TAXES
              Income tax expense for the years ended September 30 is summarized
              as follows:
<TABLE> 
<CAPTION> 
                                                                                  1997                    1996
                                                                            --------------          ---------------
              <S>                                                           <C>                     <C> 
              Current                                                       $       58,266          $        81,475
              Deferred                                                             (27,700)                 (23,100)
                                                                            --------------          ---------------

                                                                            $       30,566          $        58,375
                                                                            ==============          ===============

              Effective tax rates                                                       25%                      31%
</TABLE> 
              Retained earnings at September 30, 1997 include earnings of
              approximately $452,000, representing bad debt deductions for which
              no provision for federal 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 will be
              imposed at the then applicable rates.

                                      26
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  -7      INCOME TAXES (Continued)
              The provisions for federal income taxes for the years ended
              September 30, 1997 and 1996 differ from that computed at the
              statutory corporate tax rate of 34 percent as follows:
<TABLE> 
<CAPTION> 
                                                                                   1997                    1996
                                                                              ------------             ------------
              <S>                                                             <C>                      <C> 
              Tax at statutory rate                                           $     42,130             $     63,552
              Change Resulting From:
                 State tax credits                                                  (5,000)                       0

              Other                                                                 (6,564)                  (5,177)
                                                                              ------------             ------------

                                                                              $     30,566             $     58,375
                                                                              ============             ============
</TABLE> 
              Temporary differences between the financial statement carrying
              amounts and tax basis of assets and liabilities that gave rise to
              significant portions of the deferred tax liability at September 30
              relates to the following:
<TABLE> 
<CAPTION> 
                                                                                   1997                    1996
                                                                              ------------             ------------
              <S>                                                             <C>                      <C> 
              Deferred Tax Assets
              Deferred compensation                                           $     96,000             $     30,400
              Deferred loan fees                                                    17,000                   22,700
              State tax credits carryover                                            5,000                        0
              SAIF special assessment                                                    0                   39,200
                                                                              ------------             ------------

                    Total                                                          118,000                   92,300
                                                                              ------------             ------------

              Deferred Tax Liabilities
              Accrued interest on loans                                             34,900                   33,200
              FHLB stock dividend                                                   47,500                   39,700
              Bad debt deduction                                                    57,800                   69,300
              Unrealized gain on securities available-for-sale                     147,200                  100,300
                                                                              ------------             ------------

                    Total                                                          287,400                  242,500
                                                                              ------------             ------------

                    Net Deferred Tax Liability                                $    169,400             $    150,200
                                                                              ============             ============
</TABLE> 
              For 1997 and 1996, deferred tax expense results from timing
              differences in the recognition of income and expense for tax and
              financial purposes. The sources and tax effects of these temporary
              and timing differences are as follows:
<TABLE> 
<CAPTION> 
                                                                                   1997                    1996
                                                                              ------------             ------------
              <S>                                                             <C>                      <C> 
              Accrued interest on loans                                       $      1,700             $      1,900
              Deferred Directors retirement                                        (65,600)                   1,700
              Deferred loan fees recognized                                          5,700                    4,100
              FHLB stock dividend                                                    7,800                    6,900
              Bad debt deduction                                                   (11,500)                   1,500
              State tax credits                                                     (5,000)                       0
              SAIF special assessment                                               39,200                  (39,200)
                                                                              ------------             ------------

                                                                              $    (27,700)            $    (23,100)
                                                                              ============             ============
</TABLE> 
                                      27
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -8       CAPITAL REQUIREMENTS
              The Association is subject to various regulatory capital
              requirements administered by the federal banking agencies. Failure
              to meet minimum capital requirements can initiate certain actions
              by regulators that, if undertaken, could have a direct material
              effect on the Association's financial statements. Under capital
              adequacy guidelines and the regulatory framework for prompt
              corrective action, the Association must meet specific guidelines
              that involve quantitative measures of the Association's assets,
              liabilities, and certain off-balance sheet items as calculated
              under regulatory accounting practices. The Association'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 Association to maintain minimum amounts and
              ratios as outlined below. Management believes, as of September 30,
              1997, the Association met all capital adequacy requirements to
              which it is subject.

              As of October 31, 1997, the most recent notification from Office
              of Thrift Supervision categorized the Association as well
              capitalized under the regulatory framework for prompt corrective
              action. To be well capitalized the Association must maintain
              minimum total risk-based, Tier I risk-based, and Tier I leverage
              ratios. There are no conditions or events since that notification
              that management believes have changed the institution's category.

              The following is a reconciliation of the Association's capital
              computed under generally accepted accounting principles (GAAP) to
              regulatory capital. OTS regulations specify minimum capital
              requirements for the Association. The following reconciliation
              also compares the capital requirements as computed to the minimum
              capital requirements for the Association.
<TABLE> 
              <S>                                                      <C> 
              Equity Per GAAP                                          $     4,850,885
                  Unrealized Gain on Securities                               (250,644)
                                                                       ---------------

                      Tier I Capital                                         4,600,241

                  Valuation Allowance                                           60,000
                                                                       ---------------
                      Regulatory Capital                               $     4,660,241
                                                                       ===============
</TABLE> 
<TABLE> 
<CAPTION> 
                                                    Actual                   Adequacy Purposes          Action Regulations
                                               Amount        Ratio           Amount      Ratio           Amount      Ratio
                                               ------        -----           ------      -----           ------      -----
              <S>                          <C>              <C>           <C>            <C>          <C>            <C> 
              Total Capital
                 (to Risk Weighted
                 Assets)                   $  4,660,241     54.11%        $  688,960     8.00%        $  861,200     10.00%

              Tier I Capital
                 (to Risk Weighted
                 Assets)                      4,600,241     53.42            258,360     3.00            516,720      6.00

              Tier I Capital
           (to Average Assets)                4,600,241     21.53            320,520     1.50          1,068,400      5.00
</TABLE> 

                                      28
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -8       CAPITAL REQUIREMENTS (Continued)
              The Association's management believes that, under the current
              regulations, the Association will continue to meet its minimum
              capital requirements in the coming year. However, events beyond
              the control of the Association, such as increased interest rates
              or a downturn in the economy in the Association's operating area,
              could adversely affect future minimum capital requirements.


NOTE -9       OTHER NON-INTEREST EXPENSE
<TABLE> 
<CAPTION> 
                                                                                   1997                    1996
                                                                              ------------             ------------
              <S>                                                             <C>                      <C> 
              Communication, postage and office supplies                            21,258                   19,960
              Insurance                                                              6,109                    5,874
              Professional services                                                 20,109                   14,374
              Travel and entertainment                                              26,340                   25,216
              Dues and subscriptions                                                 5,381                    4,930
              Other                                                                 23,522                    4,453
                                                                              ------------             ------------

                                                                              $    109,533             $     87,022
                                                                              ============             ============
</TABLE> 
NOTE -10      SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK
              Most of the Association's business activity is with customers
              located within the state, principally southeastern Colorado. The
              Association does not have a high concentration of deposits or
              loans with one individual or entity.

NOTE -11      RELATED PARTY TRANSACTIONS
              Loans to related parties include loans made to directors,
              executive officers, and their associates as defined. The loans are
              made on substantially the same terms as other loan customers.

              The aggregate dollar amount of loans was $81,700 and $167,298 at
              September 30, 1997 and 1996, respectively. During 1997, no new
              loans were made and repayments totaled $85,598. Purchases from
              directors for the years ended September 30, 1997 and 1996 amounted
              to $20,300 and $30,343, respectively. As of September 30, 1997,
              approximately $618,000 of directors and employees accounts were
              included in deposits.

NOTE-12       FAIR VALUES OF FINANCIAL INSTRUMENTS
              The estimated fair values of the Association's financial
              instruments as of September 30, are as follows:
<TABLE> 
<CAPTION> 
                                                                1997                                 1996
                                                    CARRYING             FAIR            CARRYING             FAIR
              Financial Assets:                      AMOUNT              VALUE            AMOUNT              VALUE
                                                 --------------    ---------------    --------------     --------------
              <S>                                <C>               <C>                <C>                <C> 
              Cash and cash equivalents          $    3,205,382    $     3,205,382    $    2,221,416     $    2,221,416
              Certificates of deposit                 1,999,312          1,999,312         1,897,000          1,897,000
              Securities available-for-sale             409,218            409,218           282,300            282,300
              Securities held-to-maturity             3,170,273          3,285,335         3,116,767          3,149,299
              Loans receivable - net                 13,529,566         14,053,000        12,286,909         12,591,000

              Financial liabilities:
              Deposits                               16,139,404         16,118,000        17,144,638         17,115,000
</TABLE> 
                                      29
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -13      RETIREMENT PLAN
              During the year ended September 30, 1997, the Association adopted
              a non-qualified retirement plan for its senior officer and
              directors in recognition of their years of service to the
              Association. Funds are set aside annually in a grantor trust.
              Distributions are scheduled to be paid at the time the officer or
              directors leave the Association. No tax deduction for the Plan is
              claimed until funds are paid to the beneficiaries.

              For the year ended September 30, 1997, the contributions to the
              plan were $251,687.

NOTE -14      EMPLOYEE STOCK OWNERSHIP PLAN
              As a part of conversion to stock, the Association established an
              ESOP to benefit substantially all employees. The ESOP purchased
              33,856 shares of common stock in the conversion with proceeds
              received from a loan from the Company. The note is to be repaid in
              ten annual principal installments of $33,856, starting October 1,
              1997. Interest is based on the Wall Street Journal Prime plus one
              point, and is adjusted annually on October 1. The unallocated
              shares of stock held by the ESOP are pledged as collateral on the
              debt. The ESOP is funded by contributions made by the Association
              in amounts sufficient to retire the debt. At September 30, 1997,
              the outstanding balance of the note receivable is $338,560 and is
              presented as a reduction of stockholders' equity. ESOP
              compensation expense was $49,856 for the year ended September 30,
              1997.

              In November 1993, the AICPA issued Statement of Position 93-6
              "Employers' Accounting for Employee Stock Ownership Plans." The
              statement was adopted May 21, 1997, the effective date of the
              Association's conversion to a stock company. The Statement
              requires, among other things, that: (1) for ESOP shares committed
              to be released in a period to compensate employees directly,
              employers should recognize compensation cost equal to the average
              fair value (as determined on a monthly basis) of the shares
              committed to be released, (2) dividends on unallocated shares used
              to repay ESOP loans are not considered dividends for financial
              reporting purposes, dividends on allocated or committed shares are
              credited to the accounts of the participants and reported as
              dividends in the financial statements, (3) for an internally
              leveraged ESOP, the Company's loan receivable and the ESOP note
              payable as well as the interest income/expense is not reflected in
              the consolidated financial statements and (4) for earnings per
              share computations, ESOP shares that have been committed to be
              released should be considered outstanding. ESOP shares that have
              not been committed to be released should not be considered
              outstanding.

              The ESOP shares as of September 30, 1997 are as follows:

<TABLE> 
                    <S>                                                   <C> 
                    Shares committed to be released for allocation        $       3,386
                    Unreleased shares                                            30,470
                                                                          -------------

                            Total ESOP shares                                    33,856
                                                                          =============

                    Fair value of unreleased shares                       $     426,580
                                                                          =============
</TABLE> 

                                      30
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE-15       IMPACT OF NEW ACCOUNTING STANDARDS
              Accounting by Creditors for Impairment of a Loan and Accounting by
              Creditors for Impairment of a Loan Income Recognition and
              Disclosures. The Association adopted on October 1, 1995 Statements
              of Financial Accounting Standards Nos. 118 and 114. SFAS No. 114
              requires that certain impaired loans be measured based on the
              present value of expected future cash flows discounted at each
              loan's original effective interest rate. As a practical expedient,
              impairment may be measured based on the loan's observable market
              price or the fair value of the collateral if the loan is
              collateral dependent. When the measure of the impaired loan is
              less than the recorded investment in the loan, the impairment is
              recorded through a valuation allowance. The Association had
              previously measured the allowance for loan losses using methods
              similar to those prescribed in SFAS No. 114. As a result of
              adopting these statements, no additional provision to the
              allowance for loan losses was required as of October 1. 1995.
              Based on the Association's loan portfolio composition, which
              primarily consists of one-to-four family residential mortgages,
              which are exempt from SFAS No. 114 when evaluated collectively for
              impairment as is done by the Association, the Association had no
              loans designated as impaired under the provisions of SFAS No.
              114 at October 1, 1995.

              Disclosure of Derivative Financial Instruments. In October, 1994,
              the Financial Accounting Standards Board ("FASB") issued SFAS No.
              119 "Disclosure about Derivative Financial Instruments and Fair
              Value of Financial Instruments." This statement addresses the
              disclosure of derivative financial instruments including the face
              amount, nature and terms. For derivatives held for trading,
              disclosure of average and period end fair values and disaggregated
              gains and losses is required. For derivatives held for purposes
              other than trading, disclosure of objectives, strategies, policies
              on reporting and income recognition method is required. This
              statement is effective for financial statements for fiscal years
              ending after December 15, 1995. Currently the Association does not
              own any derivative financial instruments and therefore SFAS No.
              119 did not have any impact on the financial statements.

              Accounting for Stock-Based Compensation. In October, 1995, the
              Financial Accounting Standards Board issued SFAS No. 123,
              "Accounting for Stock-Based Compensation to Employees." This
              Statement encourages entities to adopt the fair value based method
              of accounting for employee stock options or other stock
              compensation plans. However, it allows an entity to measure
              compensation cost for those plans using the intrinsic value based
              method of accounting prescribed by APB Opinion No. 25, "Accounting
              for Stock Issued to Employees." Under the fair value based method,
              compensation cost is measured at the grant date based on the value
              of the award and is recognized over the service period, which is
              usually the vesting period. Under the intrinsic value based
              method, compensation cost is the excess of the quoted market price
              of the stock at the grant date over the amount an employee must
              pay to acquire the stock. Most fixed stock option plans--the most
              common type of stock compensation plan--have no intrinsic value at
              grant date and under Opinion No. 25 no compensation cost is
              recognized for them. Compensation cost is recognized for other
              types of stock based compensation plans under Opinion No. 25,
              including plans

                                      31
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE - 15     IMPACT OF NEW ACCOUNTING STANDARDS (Continued)
              with variable, usually performance-based features. This Statement
              requires that an employer's financial statements include certain
              disclosures about stock-based employee compensation arrangements
              regardless of the method used to account for them. This Statement
              is effective for transactions entered into in fiscal years that
              begin after December 15, 1995. The Association adopted the
              Statement on the date the Association converted from a federal
              mutual to a federal stock savings and loan association. The
              Association has not determined which method it will use to account
              for the options at this time and has not estimated the effect of
              adoption on the Association's financial condition or results of
              operations.

              Accounting for Transfers and Servicing of Financial Assets and
              Extinguishments of Liabilities. In June, 1996, the Financial
              Accounting Standards Board issued SFAS No. 125 "Accounting for
              Transfers and Servicing of Financial Assets and Extinguishments of
              Liabilities", which provides accounting and reporting standards
              for transfers and servicing of financial assets and
              extinguishments of liabilities based on consistent application of
              financial components approach that focuses on control. Under that
              approach, after a transfer of financial assets, an entity
              recognizes the financial and servicing assets it controls and the
              liabilities it has incurred, derecognizes financial assets when
              control has been surrendered, and derecognizes liabilities when
              extinguished. This statement is effective for transfers and
              servicing of financial assets and extinguishments of liabilities
              occurring after December 31, 1996, and is to be applied
              prospectively. Earlier or retroactive application is not
              permitted. The Association adopted the provisions of the Standard
              on January 1, 1997. Based on the Association's current operating
              activities, the adoption of this statement did not have a material
              impact on the Association's financial condition or results of
              operations.

              Earnings Per Share. In February 1997, the Financial Accounting
              Standards Board ("FASB") issued Statement No. 128. The Statement
              establishes standards for computing and presenting earnings per
              share and applies to entities with publicly held common stock or
              potential common stock. This Statement simplifies the standards
              for computing earnings per share and makes them comparable to
              international EPS standards. It replaces the presentation of
              primary EPS with a presentation of basic EPS.

              It also requires dual presentations of basic and diluted EPS on
              the face of the income statement for all entities with complex
              capital structures and requires a reconciliation of the numerator
              and denominator of the basic EPS computation to the numerator and
              denominator of the diluted EPS computation. Basic EPS excludes
              dilution and is computed by dividing income available to common
              stockholders by the weighted-average number of common shares
              outstanding for the period. Diluted EPS reflects the potential
              dilution that could occur if securities or other contracts to
              issue common stock were exercised or converted into common stock
              or resulted in the issuance of common stock that then shared in
              the earnings of the entity. Diluted EPS is computed similarly to
              fully diluted EPS pursuant to APB Opinion No. 15. This statement
              supersedes Opinion 15 and AICPA Accounting Interpretation 1-102 of
              Opinion 15. This statement is effective for financial statements
              issued for periods ending after December 15, 1997. Management
              believes that the impact of adopting SFAS No. 128 will not be
              material to the financial statements.

                                      32
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE - 15     IMPACT OF NEW ACCOUNTING STANDARDS (Continued)
              Disclosure of Information about Capital Structure. In February
              1997, the Financial Accounting Standards Board issued Statement
              No. 129.

              The Statement incorporates the disclosure requirements of APB
              Opinion No. 15, Earnings Per Share and makes them applicable to
              all public and nonpublic entities that have issued securities
              addressed by the Statement. APB Opinion No. 15 requires disclosure
              of descriptive information about securities that is not
              necessarily related to the computation of earnings per share.

              This statement continues the previous requirements to disclose
              certain information about an entity's capital structure found in
              APB Opinions No. 10, Omnibus Opinion - 1966, and No. 15, Earnings
              Per Share, and FASB Statement No. 47, Disclosure of Long-Term
              Obligations, for entities that were subject to the requirements of
              those standards. This Statement eliminates the exemption of
              nonpublic entities from certain disclosure requirements of Opinion
              No. 15 as provided by FASB Statement No. 21, Suspension of the
              Reporting of Earnings per Share and Segment Information by
              Nonpublic Enterprises. It supersedes specific disclosure
              requirements of Opinions 10 and 15 and Statement 47 and
              consolidates them in this statement for ease of retrieval and for
              greater visibility to nonpublic entities. The Statement is
              effective for financial statements for periods ending after
              December 15, 1997. SFAS No. 129 will be adopted by the Association
              after December 15, 1997, the impact of adopting the Statement will
              not be material to the financial statements.

              Reporting Comprehensive Income. In June 1997, the Financial
              Accounting Standards board issued Statement No. 130. The Statement
              establishes standards for reporting and display of comprehensive
              income and its components (revenues, expenses, gains, and losses)
              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 to be reported in a financial statement that
              is displayed with the same prominence as other financial
              statements. This Statement does not require a specific format for
              that financial statement but requires that an enterprise display
              an amount representing total comprehensive income for the period
              in that financial statement.

              This Statement 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 a statement of
              financial position.

              This Statement is effective for fiscal years beginning after
              December 15, 1997. FASB Statement No. 130 will be adopted by the
              Association after December 15, 1997, the impact of adopting the
              Statement will not be material to the financial statements.

              Disclosures about Segments of an Enterprise and Related
              Information. In June 1997 the Financial Accounting Standards Board
              issued Statement No. 131. The 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 shareholders. It
              also establishes standards for related disclosures

                                      33
<PAGE>
 
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE-15       IMPACT OF NEW ACCOUNTING STANDARDS (Continued)
              about products and services, geographic areas, and major
              customers. This Statement supersedes FASB Statement No. 14,
              Financial reporting for segments of Business Enterprise, but
              retains the requirement to report information about major
              customers. It amends FASB Statement No. 94, Consolidation of all
              Majority-owned Subsidiaries, to remove the special disclosure
              requirements for previously unconsolidated subsidiaries.

              The Statement requires that a public business enterprise report
              financial and descriptive information about its reportable
              operating segments. Operating segments are components of an
              enterprise about which separate financial information is available
              that is evaluated regularly by the chief operating decision maker
              in deciding how to allocate resources and in assessing
              performance.

              Generally, financial information is required to be reported on the
              basis that is used internally for evaluating segment performance
              and deciding how to allocate resources to segments.

              The Statement requires that a public business enterprise report a
              measure of segment profit or loss, certain specific revenue and
              expense items, and segment assets. It requires reconciliations of
              total segment revenues, total segment profit or loss, total
              segment assets and other amounts disclosed for segments to
              corresponding amounts in the enterprise's general-purpose
              financial statements. It requires that all public business
              enterprises report information about the revenues derived from the
              enterprise's products or services (or groups of similar products
              and services), about the countries in which the enterprise earns
              revenues and holds assets, and about major customers regardless of
              whether that information is used in making operating decisions.

              The Statement also requires that a public business enterprise
              report descriptive information about the way that the operating
              segments were determined, the products and services provided by
              the operating segments, differences between the measurements used
              in reporting segment information and those used in the
              enterprise's general-purpose financial statements, and changes in
              the measurement of segment amounts from period to period.

              This Statement is effective for fiscal years beginning after
              December 15, 1997. FASB Statement No. 131 will be adopted by the
              Association after December 15, 1997, the impact of adopting the
              Statement will not be material to the financial statements.

NOTE 16       EARNINGS PER SHARE
              The conversion from a mutual savings association to a stock
              institution was completed May 21, 1997. The computation of
              earnings per share is based on the net income earned from the date
              of conversion to the end of the fiscal year divided by the
              weighted-average number of shares issued from the date of
              conversion until the end of the fiscal year. Employee Stock
              Ownership Plan shares not committed to be released to participants
              are not considered outstanding for the purposes of computing
              earnings per share.

                                      34
<PAGE>
                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17       CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)
              The following condensed statements summarize the financial
              position, operating results and cash flows of Rocky Ford
              Financial, Inc. as of September 30 1997 and for the four months
              then ended.
<TABLE> 
                      <S>                                                    <C> 
                      ASSETS
                      Cash and equivalents                                   $      1,577,324
                      Investment in subsidiary                                      1,992,663
                      ESOP note receivable                                            338,560
                      Other                                                            19,612
                                                                             ----------------

                                                                             $      3,928,159
                                                                             ================
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      Stockholders' equity                                   $      3,928,159
                                                                             ================


                      CONDENSED STATEMENT OF INCOME
                      Equity in undistributed net income
                         of subsidiary                                       $         81,756
                      Other net                                                        11,589
                                                                             ----------------

                                                                             $         93,345
                                                                             ================
                      CONDENSED STATEMENT OF CASH FLOWS

                      Operating activities:
                      Net income                                             $         93,345
                      Adjustment to reconcile net income to
                         cash provided by operating activities:
                         Equity in undistributed net income of
                         subsidiary                                                   (81,756)
                         Other                                                         (6,612)
                                                                             ----------------
                         Net cash provided by operations                                4,977

                      Investing activities:
                      Investment in subsidiary                                     (1,910,907)

                      Financing activities:
                      Proceeds from stock conversion net
                        of expenses                                                 3,483,254
                                                                             ----------------
                      Net increase in cash                                          1,577,324

                      Cash beginning                                                        0
                                                                             ----------------
                      Cash ending                                            $      1,577,324
                                                                             ================
</TABLE> 
                                      35
<PAGE>
 
                        MARKET AND DIVIDEND INFORMATION

TRADING IN THE COMMON STOCK

     The Company's Common Stock is traded on the over-the-counter market through
the OTC "Electronic Bulletin Board", administered by Nasdaq. There are currently
423,400 shares of the Common Stock outstanding and approximately 70 holders of
record of the Common Stock (not including shares held in "street name") as of
December 1, 1997.

     The following table sets forth certain information as to the range of the
high and low bid prices for the Company's common stock for the calendar quarters
since the Common Stock's issuance on May 21, 1997.
<TABLE> 
<CAPTION> 
                                High Bid (1)     Low Bid (1)     Dividends Paid
                                ------------     -----------     --------------
         <S>                    <C>              <C>             <C> 
         Fiscal 1997:
            Third Quarter          14.25             12.75             none
            Fourth Quarter         14.25             13.25             none
</TABLE> 
---------------
(1)  Quotations reflect inter-dealer price, without retail mark-up, mark-down or
     commissions, and may not represent actual transactions.

DIVIDEND RESTRICTIONS

     Under OTS regulations, the Association may not pay dividends on its capital
stock if its regulatory capital would thereby be reduced below the amount then
required for the liquidation account established for the benefit of certain
depositors of the Association at the time of the Conversion. In addition,
savings institution subsidiaries of savings and loan holding companies are
required to give the OTS 30 days' prior notice of any proposed declaration of
dividends to the holding company.

     OTS regulations impose additional limitations on the payment of dividends
and other capital distributions (including stock repurchases and cash mergers)
by the Association. Under these regulations, a savings institution that,
immediately prior to, and on a pro forma basis after giving effect to, a
proposed capital distribution, has total capital (as defined by OTS regulation)
that is equal to or greater than the amount of its capital requirements (a "Tier
1 Association") is generally permitted, without OTS approval, to make capital
distributions during a calendar year in the amount equal to the greater of: (i)
75% of its net income for the previous four quarters; or (ii) up to 100% of its
net income to date during the calendar year plus an amount that would reduce by
one-half the amount by which its capital-to-assets ratio exceeded regulatory
requirements at the beginning of the calendar year. A savings institution with
total capital in excess of current minimum capital ratio requirements (a "Tier 2
Association") is permitted to make capital distributions without OTS approval of
up to 75% of its net income for the previous four quarters, less dividends
already paid for such period. A savings institution that fails to meet current
minimum capital requirements (a "Tier 3 Association") is prohibited from making
any capital distributions without the prior approval of the OTS. A Tier 1
Association that has been notified by the OTS that it is in need of more than
normal supervision will be treated as either a Tier 2 or Tier 3 Association. The
Association is a Tier 1 Association. Under the OTS' prompt corrective action
regulations, the Association would also be prohibited from making any capital
distribution if after making the distribution, the Association would have: (i) a
total risk-based capital ratio of less than 8.0%; (ii) a Tier 1 risk-based
capital ratio of less than 4.0%; or (iii) a leverage ratio of less than 4.0%.
The OTS, after consultation with the FDIC, however, may permit an otherwise
prohibited stock repurchase by a savings institution if made in connection with
the issuance of additional shares in an equivalent amount and the repurchase
would reduce the institution's financial obligations or otherwise improve the
institution's financial condition.

                                      36
<PAGE>
 
     Furthermore, earnings of the Association appropriated to bad debt reserves
for federal income tax purposes are not available for payment of cash dividends
or other distributions to the Company without payment of taxes at the then
current tax rate by First Federal on the amount of earnings removed from the
reserves for such distributions. The Company intends to make full use of this
favorable tax treatment afforded to the Association and the Company and does not
contemplate use of any post-Conversion earnings of the Association in a manner
which would limit either the Association's bad debt deduction or create federal
tax liabilities.

                                      37
<PAGE>
                              BOARD OF DIRECTORS


<TABLE>
<S>                                   <C>                                       <C>  
Donald F. Gause                       Keith E. Waggoner                         Wayne W. Whittaker
Chairman of the Board of the          President and Chief Executive Officer     Vice President of the Company and
Company and the Association           of the Company and the Association        Association
                                      
                                      
Francis E. Clute                      Norman L. Bailey                          William E. Burrell
Secretary and Treasurer of the        President, La Junta Golf Club             Advisor, Burrell Seeds, Inc. and
Company and the Association           La Junta, Colorado                        D.V. Burrell Seed Growers Company
                                                                                Rocky Ford, Colorado
                                      
Brian H. Hancock                      R. Dean Jones
Self-employed Real Estate and         Owner, Jones Motors, Inc.
Insurance Broker                      La Junta, Colorado
Rocky Ford, Colorado                  

                                              EXECUTIVE OFFICERS

Donald F. Gause                       Keith E. Waggoner                         Wayne W. Whittaker
Chairman of the Board of the          President and Chief Executive Officer     Vice President of the Company and
Company and the Association           of the Company and the Association        the Association
                                      
Francis E. Clute                      
Secretary and Treasurer of the        
Company and the Association           
                                      
                                                OFFICE LOCATIONS
                                      
                                                    Main Office:
                                                  801 Swink Avenue
                                          Rocky Ford, Colorado  81067-0032
                                      

                                           GENERAL INFORMATION

Independent Public Accountants        Annual Meeting                            Annual Report on Form 10-KSB
Grimsley, White & Company             The 1998 Annual Meeting of                A copy of the Company's Annual
Certified Public Accountants          Stockholders will be held on January      Report on Form 10-KSB for the fiscal
Rocky Ford, Colorado                  22, 1998 at 2:00 p.m. at  Rocky Ford      year ended September 30, 1997 as
                                      Federal Savings and Loan Association      filed with the Securities and
General Counsel                       801 Swink Avenue, Rocky Ford,             Exchange Commission will be
H. Barton Mendenhall                  Colorado                                  furnished without charge to
Mendenhall & Malouff                                                            stockholders as of the record date for
Rocky Ford, Colorado                  Transfer Agent and Registrar              the 1998 Annual Meeting upon
                                      Illinois Stock Transfer Company           written request to Francis E. Clute,
Special Counsel                       Chicago, Illinois                         Rocky Ford Financial, Inc., 801
Housley Kantarian & Bronstein, P.C.                                             Swink Avenue, Rocky Ford,
1220 19th Street, N.W., Suite 700                                               Colorado  81067-0032.
Washington, D.C.  20036
</TABLE>


                                       38