<PAGE>

                                                                      Exhibit 13

                                  [ L O G O ]



                          ROCKY FORD FINANCIAL, INC.


                               ANNUAL REPORT FOR

                                THE YEAR ENDED

                              SEPTEMBER 30, 1999
<PAGE>

            [LETTERHEAD OF ROCKY FORD FINANCIAL, INC. APPEARS HERE]



To Our Stockholders:

     Rocky Ford Financial Inc. had another good year in 1999.  Our net profit
was down, but our loan demand remains strong, as does our savings.  We are still
making a large share of home loans in our trade area.

     We still have many challenges ahead of us and are determined to meet the
challenges and take our business to a higher level of performance for our
stockholders.  Our economy is very positive in our area and we are looking
forward to a good year in 2000.

     Our hard working employees have helped us be successful and we want to
thank them for their efforts.  We are confident they will continue to meet any
challenges.

     Thank you for your support and confidence and we hope to see you at our
annual meeting January 20, 2000.

                                         Sincerely,

                                         /s/ Keith E. Waggoner
                                         Keith E. Waggoner
                                         President and
                                         Chief Executive Officer
<PAGE>

                             FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
                                                   At September 30,             Change
                                              -----------------------     --------------------
                                                1999           1998        Amount     Percent
                                              --------       --------     --------   ---------
                                                            (Dollars in thousands)
<S>                                          <C>             <C>          <C>        <C>
Financial Position:
 Total assets............................    $ 23,477        $ 23,013      $ 464        2.02%
 Loans receivable, net...................      13,446          14,093       (647)      (4.59)
 Mortgage-backed and related securities..       1,667           1,806       (139)      (7.70)
 Investment securities...................       1,017           1,033        (16)      (1.55)
 Deposits................................      16,215          15,598        617        3.96
 Stockholders' equity....................       6,660           6,724        (64)       (.95)

 Number of common shares outstanding.....     404,950         423,200
</TABLE>

<TABLE>
<CAPTION>
                                              For the Year Ended
                                                 September 30,                  Change
                                           -----------------------     --------------------
                                             1999           1998        Amount     Percent
                                           --------       --------     --------   ---------
                                                          (Dollars in thousands)
<S>                                        <C>            <C>          <C>        <C>
Results of Operations:
 Interest income.........................  $  1,656       $  1,700     $   (44)     (2.59)%
 Interest expense........................       766            768          (2)      (.26)
 Net interest income.....................       890            932         (42)     (4.51)
 Provision for loan losses...............        --             --
 Net interest income after provision
  for loan losses........................       890            932         (42)     (4.51)
 Non-interest income.....................        16             14           2      14.29
 Non-interest expense....................       627            604          23       3.81
 Earnings before cumulative effect
  of accounting change...................       279            342         (63)    (18.42)
 Net earnings............................       184            208         (24)    (11.54)
</TABLE>

                                       1
<PAGE>

                SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

Summary of Financial Condition

<TABLE>
<CAPTION>
                                                      At September 30,
                                        -------------------------------------------
                                         1999     1998     1997     1996     1995
                                        -------  ------- -------  -------  --------
                                                    (Dollars in thousands)
<S>                                     <C>      <C>     <C>      <C>      <C>
Total amount of:
Total assets..........................  $23,477  $23,013  $23,165  $20,388  $19,653
Cash..................................      575      268      305      221      160
Interest-bearing deposits.............    4,100    3,700    2,900    2,000    1,100
Certificates of deposit...............    2,099    1,599    1,999    1,897    2,583
Securities available for sale
  FHLB stock..........................      160      210      323      303      284
  FHLMC stock.........................      602      574      409      282      121
                                        -------  -------  -------  -------  -------
    Total.............................      762      784      732      585      405
                                        -------  -------  -------  -------  -------
Securities-held to maturity
  GNMA's..............................    1,667    1,806    2,421    2,617    1,373
  U.S. agencies.......................      249      249      749      500    2,700
                                        -------  -------  -------  -------  -------
    Total.............................    1,916    2,055    3,170    3,117    4,073
                                        -------  -------  -------  -------  -------
Loans receivable, net.................   13,446   14,093   13,530   12,287   10,984
Savings deposits......................   16,215   15,598   16,139   17,145   16,702
Equity substantially restricted.......    6,660    6,724    6,448    2,778    2,573

Number of:
 Real estate loans outstanding........      375      415      408      403      401
 Savings accounts.....................    1,487    1,460    1,617    1,652    1,675
 Offices open.........................        1        1        1        1        1
</TABLE>

<TABLE>
<CAPTION>
Summary of Operations
                                                  Year Ended September 30,
                                        -------------------------------------------
                                          1999     1998     1997     1996    1995
                                        -------  -------  -------  ------- --------
                                                   (Dollars in thousands)
<S>                                     <C>      <C>      <C>      <C>     <C>
Interest  income......................  $ 1,656  $ 1,700  $ 1,662  $ 1,525  $ 1,471
Interest expense......................      766      768      827      820      734
                                        -------  -------  -------  -------  -------
   Net interest income................      890      932      835      705      737
Provision for loan losses (recovery)..       --       --       --       --       69
                                        -------  -------  -------  -------  -------
   Net interest income after
   provision for loan losses..........      890      932      835      705      806
                                        -------  -------  -------  -------  -------
Noninterest income....................       16       14       16       21       26
                                        -------  -------  -------  -------  -------
   Subtotal...........................      906      946      851      726      832
                                        -------  -------  -------  -------  -------

Noninterest expense:
   Compensation and benefits..........      297      308      526      232      230
   Other (1)..........................      330      296      202      307      197
                                        -------  -------  -------  -------  -------
     Total noninterest expense........      627      604      728      539      427
                                        -------  -------  -------  -------  -------
     Income before taxes..............      279      342      123      187      405
Income tax expense....................       95      134       30       58      118
                                        -------  -------  -------  -------  -------
     Net income.......................  $   184  $   208  $    93  $   129  $   287
                                        =======  =======  =======  =======  =======
</TABLE>

                                       2
<PAGE>

Key Operating Ratios

<TABLE>
<CAPTION>
                                                             Year Ended September 30,
                                                    -------------------------------------------
                                                     1999     1998     1997     1996     1995
                                                    -------  -------  -------  -------  -------
<S>                                                 <C>      <C>      <C>      <C>      <C>
Performance Ratios:
   Return on assets (ratio of net earnings
      to average total assets)....................     .79%     .90%    0.43%    0.64%    1.50%
   Return on equity (ratio of net earnings
      to average equity)..........................    2.74     3.12     2.57     4.81    12.24
   Ratio of average interest-earning assets
      to average interest-bearing liabilities.....  140.25   138.83   119.91   116.14   114.83
   Ratio of net interest income, after provision
      for loan losses, to noninterest expense.....  141.88   154.42   112.75   130.85   188.60
   Net interest rate spread.......................    2.60     2.90     3.13     2.90     3.33
   Net yield on average interest-earning
      assets......................................    3.97     4.26     3.92     3.57     3.91

Quality Ratios:
   Non-performing loans to total loans at
      end of period...............................     .25      .38     0.00     0.00     0.00
   Non-performing loans to total assets...........     .14      .24     0.00     0.00     0.00
   Non-performing assets to total assets
      at end of period............................     .14      .24     0.00     0.00     0.00
   Allowance for loan losses to non-
      performing loans at end of period...........  180.55   110.37     0.00     0.00     0.00
   Allowance for loan losses to total
      loans, net..................................     .44      .43     0.44     0.49     0.55

Capital Ratios:
   Equity to total assets at end of period........   28.37    29.22    27.83    13.63    13.09
   Average equity to average assets...............   28.68    28.97    16.82    13.27    12.24
</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, $1.4 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 stock 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, 1999, the Association had total assets of $23.5
million, total deposits of $16.2 million and equity of $6.7 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 Federal
Home Loan Bank ("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.

Forward-Looking Statements

     In addition to historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. Economic circumstances, the Company's operations and the
Company's actual results could differ significantly from those discussed in the
forward-looking statements. Some of the factors that could cause or contribute
to such differences are discussed herein but also include changes in the economy
and interest rates in the nation and the Company's market area generally. Some
of the forward-looking statements included herein are the statements regarding
management's determination of the amount and adequacy of the allowance for
losses on loans, the effect of certain recent accounting pronouncements and the
Company's projected effects related to the Year 2000 compliance issue.

Year 2000 Readiness Disclosure

     The Company has an ongoing program of evaluating the effect of the year
2000 on its information processing systems. The Company's core data processing
is performed by an outside vendor. As of September 30, 1999, all of the vendors
clients were running on Year 2000 ready software per information and testing
supplied by the vendor. They are continuing to test the systems and monitor the
results. The OTS has been performing checks of the progress and the results of
the testing process. The cost of modifications have not had a material effect on
the Company's operations. Depending on the nature of the expenditures, the
Company followed its accounting practice for capitalization. It is not possible
to be certain that all aspects of the Year 2000 issue affecting the Company,
including those related to the effort of customers, other financial
institutions, or other third parties, such as utility providers, will be fully
resolved before the year 2000.

     The Company has adopted a contingency plan and business resumption plan in
case critical systems are found not Year 2000 ready or fail. The plan has
identified alternative means of operations, principally a manual accounting and
transaction system, due to the nature of the Company's business and number of
accounts. The plan has been reviewed and tested with no exceptions noted.

Market Risk Disclosure

     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.

                                       5
<PAGE>

     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, 1999, the average weighted term to maturity of
the Association's loan portfolio was 15 years.

     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 3% (100 to 300 basis points) 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.

     The following table sets forth the interest rate sensitivity of the
Association's net portfolio value as of September 30, 1999 in the event of 1%,
2% and 3% 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>
      + 300 bp        $  4,663  $ (1,286)      (22)%          22.22%                (420)  bp
      + 200 bp           5,136      (813)      (14)           23.85                 (258)  bp
      + 100 bp           5,585      (363)       (6)           25.31                 (111)  bp
          0 bp           5,849                                26.43
      - 100 bp           6,170       221         4            27.04                   62   bp
      - 200 bp           6,347       398         7            27.50                  108   bp
      - 300 bp           6,548       599        10            28.03                  160   bp

</TABLE>

     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

                                       6
<PAGE>

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.

     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 interest-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.

                                       7
<PAGE>

<TABLE>
<CAPTION>
                                                                                       Year Ended September 30,
                                                                       ---------------------------------------------------------
                                                At September 30,                  1999                         1998
                                                                       ---------------------------  ----------------------------
                                                     1999
                                               ------------------                          Average                      Average
                                                           Yield/      Average             Yield/   Average              Yield/
                                                Balance     Cost       Balance   Interest   Cost    Balance   Interest    Cost
                                               ---------  -------      -------   -------- --------  --------  --------  --------
<S>                                            <C>        <C>          <C>       <C>      <C>       <C>       <C>       <C>
                                                                            (Dollars in thousands)
Interest/dividend-earning assets:
 Interest-bearing deposits................      $ 6,199     5.16%      $ 6,059     $  320    5.28%  $ 4,901     $  275     5.61%
  Investments.............................        2,684     6.37         2,634        171    6.49     3,266        243     7.44
  Loans...................................       13,446     8.66        13,720      1,165    8.49    13,718      1,182     8.62
                                                -------   ------       -------     ------  ------   -------     ------   ------
Total interest-earning assets.............       22,329     7.42        22,413      1,656    7.39    21,885      1,700     7.77
                                                                                   ======  ======               ======   ======
Non-interest-earning assets...............        1,148                    950                        1,114
                                                -------                -------                      -------
Total assets..............................      $23,477                $23,363                      $22,999
                                                =======                =======                      =======

Interest-bearing liabilities:
  Passbook - money market accounts........      $ 3,890     3.34       $ 3,719        130    3.50   $ 3,729        132     3.54
  Certificates of deposit.................       12,324     5.16        12,262        636    5.19    12,035        636     5.28
                                                -------   ------       -------     ------  ------   -------     ------   ------
Total interest-bearing liabilities........       16,214     4.72        15,981        766    4.79    15,764        768     4.87
                                                                                   ======                       ======   ======
Non-interest-bearing liabilities..........          603                    683                          572
                                                -------                -------                      -------
Total liabilities.........................       16,817                 16,664                       16,336
                                                                       -------                      -------
Equity....................................        6,660                  6,699                        6,663
                                                -------                -------                      -------
Total liabilities and equity..............      $23,477                $23,363                      $22,999
                                                =======                =======                      =======

Net interest/dividend income..............                                         $  890                       $  932
                                                                                   ======                       ======
Interest/dividend rate spread (1).........                  2.70%                            2.60%                         2.90%
                                                          ======                           ======                        ======
Net interest/dividend-earning assets......      $ 6,115                $ 6,432                      $ 6,121
                                                =======                =======                      =======
Net interest/dividend margin (2)..........                  3.99%                            3.97%                         4.26%
                                                          ======                           ======                        ======
Average interest/dividend-earning assets
 to average interest-bearing liabilities..                              140.25%                      138.83%
                                                                       =======                      =======
</TABLE>

--------------------
(1)  Includes nonaccrual loans.

                                       8
<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 September 30,
                                 ------------------------------------------------------------------------------------------------
                                   1999           vs.          1998                     1998             vs.              1997
                                 ----------------------------------------             ------------------------------------------
                                           Increase (Decrease)                                    Increase (Decrease)
                                                 Due to                                                 Due to
                                 ----------------------------------------             ------------------------------------------
                                                       Rate/                                                     Rate/
                                 Volume    Rate       Volume    Total                  Volume     Rate          Volume     Total
                                 ------    ----       ------    -----                  ------     ----          ------     -----
                                                                       (In thousands)
<S>                              <C>       <C>        <C>       <C>                    <C>       <C>            <C>        <C>
Interest income:
  Interest-bearing deposits...   $  65     $(16)       $ (4)    $  45                   $ 40     $ (23)          $ (4)     $ 13
  Investments.................     (47)     (31)          6       (72)                   (41)       15             (2)      (28)
  Loans.......................      --      (17)         --       (17)                    76       (22)            (1)       53
                                 -----     ----        ----     -----                   ----     -----           ----      ----
    Total interest-earning
     assets...................      18      (64)          2       (44)                    75       (30)            (7)       38
                                 -----     ----        ----     -----                   ----     -----           ----      ----

Interest-bearing liabilities:
  Deposits....................     (10)      12          --         2                    (81)       24             (2)      (59)
                                 -----     ----        ----     -----                   ----     -----           ----      ----

  Increase (decrease) in
   net interest
    income....................   $   8     $(52)       $  2     $ (42)                  $156     $ (54)          $ (5)     $ 97
                                 =====     ====        ====     =====                   ====     =====           ====      ====
</TABLE>

                                       9
<PAGE>

Comparison of Financial Condition at September 30, 1999 and 1998

     The Company's total assets increased by $464,000 from $23.0 million at
September 30, 1998 to $23.5 million at September 30, 1999.  The increase is
attributed to an increase in deposits.

     The Company's loan portfolio had a net decrease of approximately $647,000
during the year ended September 30, 1999.  Net loans totaled $13.4 million at
September 30, 1999 and $14.1 million at September 30, 1998.  During the year
ended September 30, 1999, the Company wrote loans in the amount of $3.6 million
and received payments in the amount of $3.0 million.  The loan activity was
attributed to lower interest rates which lead to refinancing and some growth in
real estate sales in this area.  As of September 30, 1999, the outstanding loan
commitments for real estate loans was $125,000.

     The allowance for loan losses totaled $60,000 at September 30, 1999 and
September 30, 1998.  As of those dates the Company had $33,000 and $54,000 non-
performing loans in its portfolio.  There were no loans charged off and no
recoveries of previous loan losses during the year ended September 30, 1999.
The determination of the allowance for loan losses is based on management's
analysis, performed on a quarterly basis, of various factors, 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 Company has had
minimal losses on loans in prior years.  At September 30, 1999, the ratio of the
allowance for loan losses to net loans was .44% as compared to .43% at September
30, 1998.

     The Company's interest earning assets, excluding loans, increased $745,000
from $8.2 million at September 30, 1998 to $8.9 million at September 30, 1999.
The Company's investment portfolio, at September 30, 1999, included mortgage-
backed and related securities classified as "held to maturity" carried at
amortized cost of $1.9 million and an estimated fair value of $2.0 million,
equity securities classified as "available for sale" with an estimated fair
value of $602,000 and interest bearing deposits with various financial
institutions totaling $6.2 million.  The increase was from the increase in
deposits and the reduction of loans.

     At September 30, 1999 deposits increased to $16.2 million from $15.6
million at September 30, 1998 or a net increase of 3.96%.  The increase is
attributed to normal seasonal deposits.  Management is continually evaluating
the investment alternatives available to the Company's customers, and adjusts
the pricing on its savings products to maintain its existing deposits.

     The Company's equity at September 30, 1999 remained the same at $6.7
million.  This is attributed to net income for the year of $184,000, an increase
in the net unrealized gain on securities available for sale of $17,000, less
dividends paid of $115,000 and the purchase of 18,250 shares of treasury stock
for $189,000.

Comparison of Operating Results for the Year Ended September 30, 1999 and 1998

     Net Income.  The Company's net income for the year ended September 30, 1999
was $184,000 compared to net income of $208,000 for the year ended September 30,
1998.  The decrease in net earnings resulted primarily from a decrease in
interest income and an increase in non-interest expenses.

     Net Interest Income.  Net interest income for the year ended September 30,
1998 was $932,000 compared to $890,000 for the year ended September 30, 1999.
The change was due to a decrease in the interest earnings on loans and
securities, offset by an increase in interest earned on cash deposits.  The
change in the accounts is attributed to payments received on loans and
securities being reinvested in interest bearing cash deposits at lower rates of
return. Interest expense was comparable for the two years.

                                      10
<PAGE>

     Interest Income.  Interest income decreased by $44,000, or by 2.60%, during
1999 compared to 1998.  This decrease resulted from an increase of average
interest-earning assets from $21.9 million as of September 30, 1998 to $22.4
million as of September 30, 1999, with a decrease in the average yield on the
interest-earning assets from 7.77% in 1998 to 7.39% in 1999.

     Interest Expense.  Interest expense decreased from $768,000 for the year
ended September 30, 1998 to $766,000 for the year ended September 30, 1999.  The
decrease in expense for the period was caused by the decrease in the average
rate paid from 4.87% in 1998 to 4.79% in 1999 with a corresponding increase in
deposits to $16.2 million in 1999 from $15.6 million in 1998.

     Provision for Loan Losses.  The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the risk
inherent in its loan portfolio and the general economy.  Such evaluation
considers numerous factors including, general economic conditions, loan
portfolio composition, prior loss experience, the estimated fair value of the
underlying collateral and other factors that warrant recognition in providing
for an adequate loan loss allowance.

     The Company determined a provision for loan loss was not required for the
years ended September 30, 1999 and 1998.

     Non-Interest Expense.  The increase in the non-interest expense section of
$23,000 for the year ended September 30, 1999, was caused by professional fees
incurred in the current period.

     Income Tax Expense.  The expense recognized as of September 30, 1999 and
1998 represents the estimated tax due on taxable income at the effective tax
rate of 34% and 39%.  The rate varies due to nondeductible ESOP expenses
recognized and the effect of state taxes.

Liquidity and Capital Resources

     The Company initially has no business other than that of the Association
and investing the proceeds retained by it.  The Association is subject to
certain regulatory limitations with respect to the payment of dividends to the
Company.

     The Company's primary source 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 funds, deposit flows and loan prepayments
are greatly influenced by the general level of interest rates, economic
conditions and competition.  The Company 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 meet operating expenses.
Management believes that proceeds from the stock sale, loan repayments and other
sources of funds will be adequate to meet the Company's liquidity needs for the
immediate future.

     The Company 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 4%. The Company has historically maintained a level
of liquid assets in excess of regulatory requirements.  The Company's liquidity
ratios at September 30, 1999 and 1998 were 34% and 27%, respectively.  The
Association's relatively high liquidity ratios at September 30, 1999 and 1998
were reflective of accelerated loan payments, and management's determination to
refrain from investing excess liquidity with longer terms.

                                      11
<PAGE>

     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 of Topeka.  At September 30, 1999, the Association had no outstanding
advances from the FHLB of Topeka.

Impact of Inflation and Changing Prices

     The financial statements and related data presented herein have been
prepared in accordance with generally accepted accounting principles, which
require the measurement of financial position and results of operations in terms
of historical dollars without considering changes in the relative purchasing
power of money over time because of inflation.  Unlike most industrial
companies, virtually all of the assets and liabilities of the Company are
monetary in nature.  As a result, interest rates have a more significant impact
on the Company's performance that the effects of general levels of inflation.
Interest rates do not necessarily move in same direction or in the same
magnitude as the prices of goods and services.

Future Impact of Recently Issued Accounting Standards

     Reporting Comprehensive Income.  In June 1997, the Financial Accounting
Standards Board ("FASB") 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 was adopted by the Association after September 30,
1998, the impact of adopting the Statement was not material to the financial
statements.

     Disclosures about Segments of an Enterprise and Related Information.  In
June 1997, the FASB 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 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.

     This Statement was effective for fiscal years beginning after December 15,
1997.  FASB Statement No. 131 was adopted by the Association after September 30,
1998, the impact of adopting the Statement did not have a significant effect on
the Company as it only operates within one segment under the new standard.

     Accounting for Derivative Instruments and Hedging Activities.  In June
1998, the FASB issued SFAS No. 133, which was subsequently amended by Statement
No. 137 regarding the effective date.  This Statement establishes accounting and
reporting standards for derivative instruments, including derivative instruments
embedded in other contracts, and for hedging activities.  It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
The statement is effective for fiscal years beginning after June 15, 2000.
Management, at this time, has not determined the impact of adopting this
statement.

                                      12
<PAGE>

     Accounting for Mortgage-Backed Securities Retained after the Securitization
of Mortgage Loans Held for Sale by a Mortgage Banking Enterprise. In October
1998, the FASB issued Statement No. 134. The Statement amends Financial
Accounting Standards No. 65. Requiring the classification of any retained
mortgage-backed securities as trading securities if the entity commits to sell
the securities before or during the securitization process. The Company adopted
this pronouncement effective January 1, 1999, and it did not have an effect on
the Company.

                                      13
<PAGE>

                       CONSOLIDATED FINANCIAL STATEMENTS
                  ROCKY FORD FINANCIAL, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
Independent Auditors' Report                                                  15

Statements of Financial Condition September 30, 1999 and 1998                 16

Statements of Income for the Years Ended September 30, 1999 and 1998          17

Statements of Equity for the Years Ended September 30, 1999 and 1998          18

Statements of Cash Flows for the Years Ended September 30, 1999 and 1998      19

Notes to Consolidated Financial Statements                                    20
</TABLE>

                                      14
<PAGE>

                   [LETTERHEAD OF GRIMSLEY, WHITE & COMPANY]



                         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, 1999 and 1998,
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, 1999 and 1998, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.


                                   /s/ Grimsley, White & Company

                                 GRIMSLEY, WHITE & COMPANY

November 24, 1999

                                      15
<PAGE>

                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

                          SEPTEMBER 30, 1999 AND 1998


<TABLE>
<CAPTION>
                           ASSETS                                                     1999              1998
                                                                                ----------------- -----------------
<S>                                                                             <C>               <C>
Cash and cash equivalents
   Interest - bearing                                                               $  4,100,000      $  3,700,000
   Non - interest bearing                                                                574,771           267,576
Certificates of deposit                                                                2,099,000         1,599,000
Securities available for sale at fair value
     Equity securities (cost of $11,327)                                                 601,536           574,062
Securities held to maturity
     Mortgage-backed securities (estimated fair value of $1,702,000
         and $1,906,500)                                                               1,667,376         1,806,286
     U.S. agencies (estimated fair value of $253,000 and $264,700)                       249,434           249,199
Loans receivable - net                                                                13,446,497        14,092,549
Federal Home Loan Bank stock, at cost                                                    166,400           209,900
Retirement trust assets                                                                  305,673           295,311
Accrued interest receivable                                                              133,799           121,660
Premises and equipment                                                                    89,732            76,688
Prepaids                                                                                  43,172            20,526
                                                                                ----------------  ----------------

            TOTAL ASSETS                                                            $ 23,477,390      $ 23,012,757
                                                                                ================  ================

                   LIABILITIES AND EQUITY
Deposits                                                                            $ 16,214,512      $ 15,597,944
Advances from borrowers for taxes and insurance                                           26,680            33,050
Accounts payable and accrued expenses                                                    396,415           452,376
Deferred income taxes                                                                    180,100           205,539
                                                                                ----------------  ----------------

            TOTAL LIABILITIES                                                         16,817,707        16,288,909
                                                                                ----------------  ----------------

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 423,200 shares                                                                   4,232             4,232
Paid-in capital                                                                        3,849,305         3,844,821
Retained earnings - substantially restricted                                           2,860,454         2,791,147
Net unrealized gain on securities available for sale,
    net of tax of $218,400 and $208,200                                                  371,805           354,496
Treasury stock at cost - 18,250 shares                                                  (189,121)                -
Note receivable from ESOP Trust                                                         (236,992)         (270,848)
                                                                                ----------------  ----------------

            TOTAL EQUITY                                                               6,659,683         6,723,848
                                                                                ----------------  ----------------

            TOTAL LIABILITIES AND EQUITY                                            $ 23,477,390      $ 23,012,757
                                                                                ================  ================
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      16
<PAGE>

                    ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                     YEARS ENDED SEPTEMBER 30, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                                        1999            1998
                                                                                   --------------- ---------------
<S>                                                                                <C>             <C>
INTEREST INCOME
      Loans receivable                                                                 $1,164,842      $1,181,752
      Securities available for sale                                                        16,478          30,036
      Securities held to maturity                                                         154,509         212,804
      Other interest-bearing assets                                                       320,269         275,659
                                                                                   --------------- ---------------

                  TOTAL INTEREST INCOME                                                 1,656,098       1,700,251

INTEREST ON DEPOSITS                                                                      766,493         767,991
                                                                                   --------------- ---------------

                  NET INTEREST INCOME                                                     889,605         932,260

PROVISION FOR LOAN LOSSES                                                                       -               -
                                                                                   --------------- ---------------

                  NET INTEREST INCOME AFTER
                        PROVISION FOR LOAN LOSSES                                         889,605         932,260
                                                                                   --------------- ---------------

NON-INTEREST INCOME
      Other charges                                                                        16,353          13,334
                                                                                   --------------- ---------------

NON-INTEREST EXPENSE
      GENERAL AND ADMINISTRATIVE
            Compensation and benefits                                                     297,139         308,213
            Occupancy and equipment                                                        36,839          30,610
            Computer services                                                              54,427          44,563
            SAIF deposit insurance                                                         16,683          17,390
            Other                                                                         221,910         202,954
                                                                                   --------------- ---------------

                  TOTAL NON-INTEREST EXPENSE                                              626,998         603,730
                                                                                   --------------- ---------------

                  INCOME BEFORE TAXES                                                     278,960         341,864

PROVISION FOR INCOME TAXES                                                                 95,080         133,821
                                                                                   --------------- ---------------

                  NET INCOME                                                           $  183,880      $  208,043
                                                                                   =============== ===============

BASIC EARNINGS PER COMMON SHARE                                                        $     0.47      $     0.52
                                                                                   =============== ===============
DILUTED EARNINGS PER COMMON SHARE                                                      $     0.47      $     0.52
                                                                                   =============== ===============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
      BASIC                                                                               386,942         396,988
      DILUTED                                                                             386,942         396,988
DIVIDENDS PER SHARE                                                                    $     0.30      $     0.30
                                                                                   =============== ===============
</TABLE>


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      17
<PAGE>

                   ROCKY FORD FINANCIAL, INC AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF EQUITY

                    YEARS ENDED SEPTEMBER 30, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                                     UNREALIZED
                                                                                      GAIN ON
                                                                                     SECURITIES                       NOTE
                                             COMMON       PAID-IN      RETAINED      AVAILABLE-     TREASURY       RECEIVABLE
                                             STOCK        CAPITAL      EARNINGS       FOR-SALE        STOCK           ESOP
                                           ---------- ------------- ------------- ---------------  ------------    ----------
<S>                                        <C>        <C>           <C>           <C>              <C>             <C>
BALANCES, OCTOBER 1, 1997                  $    4,232   $3,830,582  $  2,700,923     $ 250,644     $          -    $ (338,560)

      Net income for the year                                            208,043

     Unrealized gain on
         securities available-for-sale                                                 164,844
      Income tax expense                                                               (60,992)
                                                                                  ------------
      Comprehensive income net
          of tax                                                                       103,852
                                                                                  ------------

      Dividends paid - $.30 per share                                   (117,819)

      Payment on ESOP note receivable                                                                                  67,712

     ESOP contribution                                      14,239
                                           ---------- ------------  ------------  ------------     ------------    ----------

BALANCES, SEPTEMBER 30, 1998                    4,232    3,844,821     2,791,147       354,496                -      (270,848)

      Net income for the year                                            183,880

     Unrealized gain on
         securities available-for-sale                                                  27,474
      Income tax expense                                                               (10,165)
                                                                                  ------------
      Comprehensive income net
          of tax                                                                        17,309
                                                                                  ------------

      Dividends paid - $.30 per share                                   (114,573)

     Payment on ESOP note receivable                                                                                   33,856

      Purchase of treasury stock at
          cost- 18,250 shares                                                                           189,121

     ESOP contribution                                       4,484
                                           ---------- ------------  ------------  ------------     ------------    ----------

BALANCES, SEPTEMBER 30, 1999               $    4,232 $  3,849,305  $  2,860,454  $    371,805     $    189,121    $ (236,992)
                                           ========== ============  ============  ============     ============    ==========
</TABLE>

                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      18
<PAGE>

                   ROCKY FORD FINANCIAL, INC AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                    YEARS ENDED SEPTEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                                          1999           1998
                                                                                     --------------  -------------
<S>                                                                                  <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                                                     $      183,880  $     208,043
                                                                                     --------------  -------------
      Adjustments to  reconcile  net income to net cash  provided  by  operating
            activities:
      Amortization of:
            Deferred loan origination fees                                                  (13,344)       (11,599)
            Discounts on investments                                                           (235)          (234)
      Stock dividend received from FHLB                                                     (11,400)       (24,500)
      Earned ESOP shares priced above original cost                                           4,484         14,239
      Decrease in unearned ESOP shares                                                       33,856         33,856
      Depreciation                                                                           26,271         16,291
      Change in assets and liabilities:
            Accrued interest receivable                                                     (12,139)        25,109
            Prepaids                                                                        (22,646)        25,384
            Accounts payable and accrued expenses                                           (55,961)       113,532
            Deferred income taxes                                                           (35,604)       (24,853)
                                                                                     --------------  -------------

            TOTAL ADJUSTMENTS                                                               (86,718)       167,225
                                                                                     --------------  -------------

            NET CASH PROVIDED BY OPERATING ACTIVITIES                                        97,162        375,268
                                                                                     --------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Net change in certificates of deposit                                                (500,000)       400,312
      Loan originations and principal payments on loans                                     659,396       (551,384)
      Purchase of mortgage-backed securities                                               (499,573)             -
      Proceeds from maturities of investment securities held to maturity                          -        500,000
      Principal payments on mortgage-backed securities                                      638,483        615,022
      Redemption of Federal Home Loan Bank Stock                                             54,900        138,100
      Capital purchases                                                                     (39,315)        (9,709)
      Retirement plan trust deposits                                                        (10,362)       (43,624)
                                                                                     --------------  -------------

            NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES                                303,529      1,048,717
                                                                                     --------------  -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Purchase of treasury stock                                                           (189,121)             -
      Dividends paid                                                                       (114,573)      (117,819)
      Net change in deposits                                                                616,568       (541,460)
      Net change in mortgage escrow funds                                                    (6,370)        (2,512)
                                                                                     --------------  -------------

            NET CASH PROVIDED (USED)  BY FINANCING ACTIVITIES                               306,504       (661,791)
                                                                                     --------------  -------------

            NET INCREASE IN CASH AND CASH EQUIVALENTS                                       707,195        762,194

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                            3,967,576      3,205,382
                                                                                     --------------  -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                             $    4,674,771  $   3,967,576
                                                                                     ==============  =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
Cash paid for:
     Taxes                                                                           $      252,913  $      42,371
     Interest                                                                               768,868        770,158
</TABLE>

                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      19
<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 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.

                                      20
<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.

          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.

          Federal Home Loan Bank Stock

          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).

                                      21
<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. Estimated
          life of the building is 30 years and 5 to 15 years for furniture and
          equipment and 5 years on the automobile.

          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.

                                      22
<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.

          Advertising. Advertising is expensed as incurred.

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, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                           Gross        Gross
                                            Amortized   Unrealized   Unrealized      Fair
           1999                               Cost         Gains       Losses        Value
          ------                           ----------    --------     --------    ----------
          <S>                              <C>          <C>          <C>          <C>
          Mortgage-backed securities
            GNMA certificates              $1,667,376    $ 34,624     $      0    $1,702,000

          U.S. Government Agencies            249,434       3,566            0       253,000
                                           ----------    --------     --------    ----------

                                           $1,916,810    $ 38,190     $      0    $1,955,000
                                           ==========    ========     ========    ==========

           1998
          ------
          Mortgage-backed securities
            GNMA certificates              $1,806,286    $100,214     $      0    $1,906,500
          U.S. Government Agencies            249,199      15,501            0       264,700
                                           ----------    --------     --------    ----------

                                           $2,055,485    $115,715     $      0    $2,171,200
                                           ==========    ========     ========    ==========
</TABLE>

                                      23
<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, 1999 and 1998 were as follows:

<TABLE>
<CAPTION>
                                                           Gross        Gross
                                            Amortized   Unrealized   Unrealized      Fair
           1999                               Cost         Gains       Losses        Value
          ------                           ----------    --------     --------    ----------
          <S>                              <C>          <C>          <C>          <C>
           Equity securities

            FHLMC stock                    $   11,327    $590,209     $      0    $  601,536
                                           ==========    ========     ========    ==========

           1998
          ------
           Equity securities

            FHLMC stock                    $  $11,327    $562,735     $      0    $  574,062
                                           ==========    ========     ========    ==========
</TABLE>

          The amortized cost of debt securities at September 30, 1999, 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                  $   23,088
          Due after one year through five years       363,347
          Due from five to ten years                  207,025
          Due after ten years                       1,323,350
                                                   ----------

               Total Held-to-Maturity Securities   $1,916,810
                                                   ==========
</TABLE>

          GNMA Certificates with a carrying amount of $423,118 and $602,853 at
          September 30, 1999 and 1998, respectively, were pledged to secure
          public deposits.

                                      24
<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>
                                                                             1999          1998
                                                                         ------------  ------------
<S>                                                                      <C>           <C>
     First mortgage loans
        (principally conventional):
         Principal balances:
             Secured by one-to-four-family
               residences                                                $13,324,594   $13,852,628
             Secured by other properties                                      74,453       101,807
                                                                         -----------   -----------

                                                                          13,399,047    13,954,435
     Less:
       Net deferred loan origination fees                                    (21,150)      (34,494)
                                                                         -----------   -----------

          Total first mortgage loans                                      13,377,897    13,919,941
                                                                         -----------   -----------

     Second mortgage and share loans
        Principal balances:
            Second mortgage                                                   27,780        61,169
            Share                                                            100,820       171,439
                                                                         -----------   -----------

               Total second mortgages and share loans                        128,600       232,608
                                                                         -----------   -----------

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

                                                                         $13,446,497   $14,092,549
                                                                         ===========   ===========

     Activity in the allowance for loan losses is summarized as follows for the
     years ended September 30:
                                                                            1999          1998
                                                                         -----------   -----------

     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 $33,232
     and $54,363 at September 30, 1999 and 1998, respectively.  Interest
     income in the amount of $1,698 and $1,869 has been reserved at September
     30, 1999 and 1998.

     As of September 30, 1999 the Association had outstanding firm
     commitments to originate loans of approximately $125,000.

                                      25
<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>
                                                                         1999       1998
                                                                      ---------   ---------
<S>                                                                   <C>         <C>
          Interest bearing cash accounts                              $  25,459   $   9,860
          Investment securities                                           1,302       1,302
          Mortgaged-backed securities                                    11,078      12,513
          Loans receivable                                               95,960      97,985
                                                                      ---------   ---------

                                                                      $ 133,799    $121,660
                                                                      =========   =========
</TABLE>

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

<TABLE>
<CAPTION>
                                                                         1999        1998
                                                                      ---------   ---------
<S>                                                                   <C>         <C>
          Land                                                        $  10,000   $  10,000
          Buildings                                                     119,666     119,666
          Furniture and fixtures                                        123,197     109,652
          Automobile                                                     48,049      34,963
                                                                      ---------   ---------

                                                                        300,912     274,281
          Less accumulated depreciation                                (211,180)   (197,593)
                                                                      ---------   ---------

                                                                      $  89,732   $  76,688
                                                                      =========   =========
</TABLE>
         Depreciation expense charged to operations amounted to $26,271 and
         $16,291 for the years ended September 30, 1999 and 1998.

NOTE -6  DEPOSITS
         Deposits at September 30 are summarized as follows:

<TABLE>
<CAPTION>
                              RATE AT                  1999                      1998
                           SEPTEMBER 30,       AMOUNT       PERCENT      AMOUNT       PERCENT
                           --------------    ----------     -------    ----------     -------
<S>                        <C>               <C>            <C>        <C>            <C>

          Money market              3.75%    $ 2,569,513      15.85    $ 2,501,771      16.04
          Passbook savings          3.00%      1,320,631       8.15      1,065,672       6.83
                                             -----------     ------    -----------    -------

                                               3,890,144      24.00      3,567,443      22.87
                                             -----------     ------    -----------    -------

          Certificates of
             deposit              2% - 3%        201,551       1.24              0          0
                                  3% - 4%        102,136        .63              0          0
                                  4% - 5%      5,419,599      33.42        210,223       1.35
                                  5% - 6%      6,601,082      40.71     11,787,309      75.57
                                  7% - 8%              0          0         32,969        .21
                                             -----------     ------    -----------    -------

                                              12,324,368      76.00     12,030,501      77.13
                                             -----------     ------    -----------    -------

                                             $16,214,511     100.00    $15,597,944     100.00
                                             ===========     ======    ===========    =======
</TABLE>

                                      26
<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 $1,505,000 and $1,695,000
          at September 30, 1999 and 1998.

          At September 30, 1999, scheduled maturities of certificates of
          deposits are as follows:

<TABLE>
<CAPTION>
             Rate                                     2000        2001        2002
          ---------                              -----------  ----------   --------
<S>                                              <C>          <C>          <C>
            2% - 3%                              $   201,551  $        0   $      0
            3% - 4%                                  102,136           0          0
            4% - 5%                                4,662,014     446,856    310,729
            5% - 6%                                5,034,992   1,239,754    326,336
                                                 -----------  ----------   --------

                                                 $10,000,693  $1,686,610   $637,065
                                                 ===========  ==========   ========
</TABLE>

          Interest expense on deposits for years ended September 30 is
          summarized as follows:

<TABLE>
<CAPTION>

                                                              1999       1998
                                                           ---------   ---------
<S>                                                        <C>         <C>
          Money market                                     $  95,240   $ 100,176
          Passbook savings                                    34,944      31,358
          Certificates of deposit                            636,309     636,457
                                                           ----------   --------

                                                           $ 766,493   $ 767,991
                                                           ==========   ========
</TABLE>

NOTE -7   INCOME TAXES
          Income tax expense for the years ended September 30 is summarized as
          follows:

<TABLE>
<CAPTION>
                                                               1999         1998
                                                            ---------    ---------
<S>                                                         <C>          <C>
          Current                                           $ 130,680    $ 158,721
          Deferred                                            (35,600)     (24,900)
                                                            ---------    ---------

                                                            $  95,080    $ 133,821
                                                            =========    =========

          Effective tax rates                                      34%          39%
</TABLE>

          Retained earnings at September 30, 1999 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.

                                      27

<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, 1999 and 1998 differ from that computed at the statutory corporate
         tax rate of 34 percent as follows:


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

         Tax at statutory rate                             $ 94,846   $116,234
         Change Resulting From:
            State tax and credits                             6,533      6,128
         Non deductible ESOP expense                          4,221      9,483
         Other                                              (10,520)     1,976
                                                           --------   --------
                                                           $ 95,080   $133,821
                                                           ========   ========


         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:


                                                             1999      1998
                                                           --------   --------
         Deferred Tax Assets
         Deferred compensation                             $121,500   $107,200
         Deferred loan fees                                   7,800     12,800
         State tax credits                                    6,800          0
                                                           --------   --------

               Total                                        136,100    120,000
                                                           --------   --------


         Deferred Tax Liabilities
         Accrued interest on loans                           33,700     36,900
         FHLB stock dividend                                 29,400     34,200
         Bad debt deduction                                  34,700     46,200
         Unrealized gain on securities available-for-sale   218,400    208,239
                                                           --------   --------
               Total                                        316,200    325,539
                                                           --------   --------
               Net Deferred Tax Liability                  $180,100   $205,539
                                                           ========   ========

         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:


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

         Accrued interest on loans                         $ (3,200)   $  2,000
         Deferred Directors retirement                      (14,300)    (11,200)
         Deferred loan fees recognized                        5,000       4,200
         FHLB stock dividend                                 (4,800)    (13,300)
         Bad debt deduction                                 (11,500)    (11,600)
         State tax credits                                   (6,800)      5,000
                                                           --------   ---------

                                                           $(35,600)   $(24,900)
                                                           ========   =========

                                       28
<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, 1999, the
         Association met all capital adequacy requirements to which it is
         subject.

         As of August 23, 1999, 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.


         Equity Per GAAP                         $5,208,578
           Unrealized Gain on Securities           (371,805)
                                                 ----------
              Tier I Capital                      4,836,773

           Valuation Allowance                       60,000
                                                 ----------
              Regulatory Capital                 $4,896,773
                                                 ==========

<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)                $4,896,773     54.80%     $714,800     8.00%     $  893,500     10.00%

         Tier I Capital
           (to Risk Weighted
           Assets)                 4,836,773     54.13       357,400     4.00         536,100      6.00

         Tier I Capital
       (to Average Assets)         4,836,773     22.12       874,500     4.00       1,093,100      5.00
</TABLE>

                                      29
<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
                                                              1999       1998
                                                           --------   --------

         Communication, postage and office supplies        $ 21,098   $ 19,009
         Insurance                                            7,833      6,393
         Professional services                              124,919    109,012
         Travel and entertainment                            26,123     26,238
         Dues and subscriptions                               8,141      6,614
         Other                                               27,266     28,209
         Advertising                                          6,530      7,479
                                                           --------   --------
                                                           $221,910   $202,954
                                                           ========   ========

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 $275,466 and $302,813 at
         September 30, 1999 and 1998, respectively. During 1999 no new loans
         were made and repayments totaled $27,347. Purchases from directors for
         the years ended September 30, 1999 and 1998 amounted to $32,600 and
         $7,800, respectively. As of September 30, 1999, approximately $735,000
         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>
                                                     1999                            1998
                                           CARRYING          FAIR          CARRYING          FAIR
Financial Assets:                           AMOUNT           VALUE          AMOUNT           VALUE
                                          -----------     -----------     -----------     -----------
<S>                                       <C>             <C>             <C>             <C>
         Cash and cash equivalents        $ 4,674,771     $ 4,674,771     $ 3,967,576     $ 3,967,576
         Certificates of deposit            2,099,000       2,099,000       1,599,000       1,599,000
         Securities available-for-sale        601,536         601,536         574,062         574,062
         Securities held-to-maturity        1,916,810       1,955,000       2,055,485       2,171,200
         Loans receivable - net            13,446,497      13,772,000      14,092,549      14,598,000

         Financial liabilities:
         Deposits                          16,214,512      16,153,000      15,597,944      15,670,000
</TABLE>

                                      30
<PAGE>

                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -13 RETIREMENT PLAN
         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 years ended September 30, 1999 and 1998, the contributions to
         the plan were $34,432.

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, 1999, the outstanding balance of the note receivable is
         $236,992 and is presented as a reduction of stockholders' equity. ESOP
         compensation expense was $46,848 and $77,042 for the years ended
         September 30, 1999 and 1998.

         In November 1993, the AICPA issued Statement of Position 93-6
         "Employers' Accounting for Employee Stock Ownership Plans." 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, 1999 are as follows:
            Shared distributed                                         2,035
            Allocated shares                                           7,416
            Shares committed to be released for allocation             4,060
            Unreleased shares                                         20,345
                                                                    --------

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

           Fair value of unreleased shares                          $221,354
                                                                    ========

                                      31
<PAGE>

                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE-15  STOCKHOLDERS' EQUITY
         In the year ended September 30, 1999, the Company purchased 18,250
         shares of its common stock, at a cost of $189,121, and reported the
         purchase as treasury stock.

         For the years ended September 30, 1999 and 1998, the Company paid a
         cash dividend of $.30 and $.30 per share respectively.

NOTE-16  IMPACT OF NEW ACCOUNTING STANDARDS
         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 was adopted by the Association after
         September 30, 1998, the impact of adopting the Statement was not
         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 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.

         This Statement was effective for fiscal years beginning after December
         15, 1997. FASB Statement No. 131 was adopted by the Association after
         September 30, 1998, the impact of adopting the Statement did not have a
         significant effect on the Company as it only operates within one
         segment under the new standard.

                                       32
<PAGE>

                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE-16  IMPACT OF NEW ACCOUNTING STANDARDS (Continued)
         Accounting for Derivative Instruments and Hedging Activities. In June,
         1998, the Financial Accounting Standards Board issued SFAS No. 133,
         which was subsequently amended by Statement No. 137 regarding the
         effective date. This Statement establishes accounting and reporting
         standards for derivative instruments, including derivative instruments
         embedded in other contracts, and for hedging activities. It requires
         that an entity recognize all derivatives as either assets or
         liabilities in the statement of financial position and measure those
         instruments at fair value. The statement is effective for fiscal years
         beginning after June 15,2000. Management, at this time, has not
         determined the impact of adopting this statement.

         Accounting for Mortgage-Backed Securities Retained after the
         Securitization of Mortgage Loans Held for Sale by a Mortgage Banking
         Enterprise. In October 1998, the Financial Accounting Standards Board
         issued Statement No. 134. The Statement amends Financial Accounting
         Standards No. 65. Requiring the classification of any retained
         mortgage-backed securities as trading securities if the entity commits
         to sell the securities before or during the securitization process. The
         Company adopted this pronouncement effective January 1, 1999, and it
         did not have an effect on the Company.

NOTE 17  EARNINGS PER SHARE
         Dual presentations of basic and diluted earning per share are presented
         on the face of the income statement. Basic ESP excludes dilution and is
         computed by dividing income available to common shareholders 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 shares in the earnings of the entity. Employee Stock
         Ownership Plan shares not committed to be released to participants are
         not considered outstanding for the purposes of computing earnings per
         share.

NOTE-18  UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
         The Company has an ongoing program of evaluating the effect of the year
         2000 on its information processing systems. The Company's core data
         processing is performed by an outside vendor, as such the Company is
         not directly involved with programming changes or application upgrades.
         The processor has indicated that renovations to their system for year
         2000 are complete. The Company will continue to test this system as
         well as other systems for year 2000 compliance. The cost of
         modifications did not have a material effect on the Company's
         operations. Depending on the nature of the expenditures, the Company
         followed its accounting practices for capitalization. It is not
         possible to be certain that all aspects of the year 2000 issue
         affecting the Company including those related to the efforts of
         customers, other financial institutions, suppliers, or other third
         parties, will be fully resolved.

                                       33
<PAGE>

                   ROCKY FORD FINANCIAL, INC. AND SUBSIDIARY


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE-19  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 1999 and 1998 and for the years then ended.

<TABLE>
<CAPTION>
                                                          1999         1998
                                                       -----------  -----------
         <S>                                           <C>          <C>
         ASSETS
         Cash and equivalents                          $1,422,057   $1,637,827
         Investment in subsidiary                       2,229,195    2,122,125
         ESOP note receivable                             236,992      270,848
         Other                                             34,689        4,522
                                                       ----------   ----------
                                                       $3,922,933   $4,035,322
                                                       ==========   ==========
         LIABILITIES AND STOCKHOLDERS' EQUITY
         Accounts payable                              $    5,641   $    2,700
         Stockholders' equity                           3,917,292    4,032,622
                                                       ----------   ----------
         Total liabilities and stockholders' equity    $3,922,933   $4,035,322
                                                       ==========   ==========

         CONDENSED STATEMENT OF INCOME
         Equity in undistributed net income
          of subsidiary                                $  205,072   $  214,102
         Other net                                        (21,192)      (6,059)
                                                       ----------   ----------
                                                       $  183,880   $  208,043
                                                       ==========   ==========

         CONDENSED STATEMENT OF CASH FLOWS
         Operating activities:
         Net income                                    $  183,880   $  208,043
         Adjustment to reconcile net income to
          cash provided by operating activities:
         Equity in undistributed net income of
          subsidiary                                     (205,072)    (214,102)
         Other                                            (22,742)      32,029
                                                       ----------   ----------
         Net cash (used) provided by operations           (43,934)      25,970
                                                       ----------   ----------

         Investing activities:
         ESOP note payments                                33,856       67,712
         Dividends received from subsidiary                98,002       84,640
         Dividends paid                                  (114,573)    (117,819)
                                                       ----------   ----------
                                                           17,285       34,533
                                                       ----------   ----------

         Financing activities:
         Purchase of treasury stock                      (189,121)           0
                                                       ----------   ----------

         Net increase(decrease)  in cash                 (215,770)      60,503

           Cash beginning                               1,637,827    1,577,324
                                                       ----------   ----------

           Cash ending                                 $1,422,057   $1,637,827
                                                       ==========   ==========
</TABLE>


                                      34
<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 379,803 shares of the Common Stock outstanding and approximately 75
holders of record of the Common Stock (not including shares held in "street
name") as of December 10, 1999.

     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 most recent two
fiscal years.

<TABLE>
<CAPTION>
                           High Bid (1)  Low Bid (1)  Dividends Paid
                           ------------  -----------  --------------
      <S>                  <C>           <C>          <C>
      Fiscal 1998:
         First Quarter        14.12         14.00         none
         Second Quarter       15.00         14.12         $.15
         Third Quarter        14.75         14.00         none
         Fourth Quarter       14.75         11.00         $.15

      Fiscal 1999:
         First Quarter        12.50         10.31         $.15
         Second Quarter       11.69         10.25         none
         Third Quarter        13.25         11.50         $.15
         Fourth Quarter       11.50          9.75         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 to certain federal income tax considerations, OTS regulations
impose limitations on the payment of dividends and other capital distributions
by savings institutions.  Under OTS regulations the Association is not permitted
to 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 its
conversion to stock form.  Under the OTS' prompt corrective action regulations,
the Association is also prohibited from making any capital distributions 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 if made in connection with the issuance of additional shares in an
equivalent amount and the repurchase will reduce the institution's financial
obligations or otherwise improve the institution's financial condition.

     OTS regulations require that savings institutions submit notice to the OTS
prior to making a capital distribution if (a) they would not be well-capitalized
after the distribution, (b) the distribution would result in the retirement of
any 1of the institution's common or preferred stock or debt counted as its
regulatory capital, or (c) the institution is a subsidiary of a holding company.
A savings institution must make application to the OTS to pay a capital
distribution

                                      35
<PAGE>

if (x) the institution would not be adequately capitalized following the
distribution, (y) the institution's total distributions for the calendar year
exceeds the institution's net income for the calendar year to date plus its net
income (less distributions) for the preceding two years, or (z) the distribution
would otherwise violate applicable law or regulation or an agreement with or
condition imposed by the OTS. If neither the savings institution nor the
proposed capital distribution meet any of the foregoing criteria, then no notice
or application is required to be filed with the OTS before making a capital
distribution. The OTS may disapprove or deny a capital distribution if in the
view of the OTS, the capital distribution would constitute an unsafe or unsound
practice.

     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 the Association 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.

                                      36
<PAGE>

<TABLE>
<CAPTION>
                                                 BOARD OF DIRECTORS
<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 Association
Company and the Association            of the Company and the Association


Francis E. Clute                       Norman L. Bailey                          William E. Burrell
Secretary and Treasurer of the         Manager, Southeast Colorado Power         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          Retired
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 LOCATION

                                                   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 2000 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                   20, 2000 at 2:00 p.m. at  Rocky Ford      year ended September 30, 1999 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 1999 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>