EXHIBIT 13
<PAGE>

                                                                       FOCUS '99

Selected Financial Data

The following table sets forth certain  information  concerning the consolidated
financial   condition  and  operating  data  of  Lakeview  Financial  Corp.  and
Subsidiaries at the dates indicated:
<TABLE>
<CAPTION>
 .........................................................................................July 31...........................
 .................................................................1994..........1995........1996..........1997.........1998.
---------------------------------------------------------------------------------------------------------------------------
                                                                      (Dollars in Thousands, except share data)
<S>                                                          <C>          <C>          <C>           <C>          <C>     
Selected Financial Condition Data:......................................
Total assets..................................................$.413,725....$.419,212....$.457,860.....$505,882.....$593,856
Loans receivable, net...........................................136,143......142,123......163,457......224,564......286,869
Mortgage-backed securities held to maturity.....................173,067......175,375......121,462......102,249......101,771
Investment securities held to maturity...........................62,637.......55,738.......40,821.......42,682.......83,831
Securities available for sale....................................11,269........8,567.......89,967......105,592.......37,867
Excess of cost over fair-value of net assets acquired, net.......12,817.......11,497.......10,176........8,856.......18,643
Deposits........................................................344,915......343,489......354,247......370,787......456,880
Total borrowings.................................................19,021.......19,859.......54,721.......63,604.......73,711
Stockholders' equity.............................................46,982.......49,440.......45,760.......61,809.......56,607
Stated book value per share (1)....................................7.30.........8.51.........9.18........13.71........11.60
Tangible book value per share (1) .................................5.30.........6.53.........7.14........11.75.........7.78

Selected Operating Data:
Interest income................................................$.18,947....$..28,430....$..30,972.....$.32,842.....$.37,377
Interest expense..................................................7,735.......13,539.......16,550.......17,318.......19,802
---------------------------------------------------------------------------------------------------------------------------
Net interest income..............................................11,212.......14,891.......14,422.......15,524.......17,575
Provision for loan losses.........................................2,047........1,801..........664..........961........1,500
Other income......................................................2,609........7,207........7,030........8,102.......11,812
Other expense.....................................................6,705.......10,266.......10,868.......13,155(2)....12,852
---------------------------------------------------------------------------------------------------------------------------
Income before income taxes........................................5,069.......10,031........9,920........9,510.......15,035
Income taxes......................................................1,813........3,736........3,646........3,449........5,590
---------------------------------------------------------------------------------------------------------------------------
Income before accounting changes..................................3,256........6,295........6,274........6,061........9,445
Cumulative effect of accounting changes...........................1,315(3).........-............-............-............-
---------------------------------------------------------------------------------------------------------------------------
Net income........................................................4,571........6,295........6,274........6,061........9,445
---------------------------------------------------------------------------------------------------------------------------
Net income per share (1)
   Basic............................................................N/A.........1.05.........1.22.........1.48.........2.51
   Diluted..........................................................N/A.........1.00.........1.14.........1.30.........2.28
Return on average assets...........................................1.16%........1.50% .......1.42% .......1.28% .......1.74%
Return on average equity..........................................12.39%.......13.08%.......13.75% ......13.09% ......17.17%
Cash dividend per common share (1)...................................02...........10...........11...........12...........19

Asset Quality Data:
Non-performing loans..........................................$...8,928....$...3,372....$...2,417.....$..3,811.....$..2,794
Other non-performing..................................................-..........850..........494............-............-
Real estate owned (REO)...........................................3,762........3,608........1,667........1,929..........505
---------------------------------------------------------------------------------------------------------------------------
Total non-performing assets......................................12,690........7,830........4,578........5,740........3,299
---------------------------------------------------------------------------------------------------------------------------
Non-performing assets to total assets..............................3.07%........1.87%........1.00% .......1.13% .........56%
Loan allowances...............................................$...1,714....$...2,535....$...3,073.....$..3,411.....$..4,478
REO allowances......................................................188............-............-............-............-
---------------------------------------------------------------------------------------------------------------------------
Total allowances..............................................$ ..1,902....$ ..2,535....$ ..3,073.....$..3,411.....$..4,478
---------------------------------------------------------------------------------------------------------------------------
Total allowances to non-performing assets.........................14.99%.......32.38%.......67.13% ......59.43% .....135.74%
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Adjusted for stock dividends and splits.

(2)  Includes one time SAIF  assessment of $2.2 million or $1.5 million,  net of
     tax (Note 21).

(3)  Reflects  implementation  of  Statement  of  Financial  Standards  No. 109,
     "Accounting for Income Taxes."

                                                                               1
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT

Management Discussion and Analysis of
Financial Condition and Results of Operation

The  Private  Securities  Litigation  Reform Act of 1995  contains  safe  harbor
provisions regarding forward-looking  statements.  When used in this discussion,
the words  "believes",  "anticipates",  "contemplates",  "expects",  and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties  which could cause actual results
to differ materially from those projected. Those risks and uncertainties include
changes in interest  rates,  risks  associated  with the effect of opening a new
branch,  the  ability  to  control  costs and  expenses,  and  general  economic
conditions.  Lakeview  Financial  Corp.  undertakes  no  obligation  to publicly
release the results of any revisions to those forward looking  statements  which
may be made to  reflect  events or  circumstances  after  the date  hereof or to
reflect the occurrence of unanticipated events.

GENERAL

Lakeview  Financial  Corp.  is organized  as a unitary  savings and loan holding
company and owns all of the outstanding  capital stock of Lakeview  Savings Bank
(collectively,  the "Company", or "Lakeview").  The Company also has investments
in five subsidiaries, Branchview, Inc. ("Branchview"),  Lakeview Mortgage Depot,
Inc. ("LMD"), LVS, Inc. (LVS), Lakeview Investment Services,  Inc. ("LISI"), and
North Properties,  Inc. ("North  Properties").  Lakeview wholly owns all service
corporations,  except for LMD,  which is 90% owned.  LISI and LVS are  currently
inactive.  In February 1998, the Company closed its operation of Lakeview Credit
Card Services,  Inc.  ("LCCS").  LCCS was formed during the 1997 fiscal year for
the purpose of issuing  secured credit cards with a national  mortgage  company.
The  alliance  was  unsuccessful  in  generating  any  significant  revenues and
resulted in a total pretax loss for fiscal 1998 of  approximately  $98,000 which
was reflected in other operating expenses in fiscal 1998.

On February 27, 1998, the Company's  growth was bolstered by its  acquisition of
Westwood Financial Corporation and its wholly owned subsidiary, Westwood Savings
Bank (collectively,  "Westwood") a $100.2 million savings institution located in
Westwood,  Bergen County,  New Jersey.  Such acquisition was accounted for under
the purchase  method of  accounting  and thus the common shares of Westwood were
exchanged by Lakeview for $29.25,  payable in the aggregate,  in the form of 50%
cash and 50% Lakeview's common stock. As a result of such exchange,  the Company
issued from  treasury  401,343  shares of common stock and paid $10.6 million in
cash.  With the  completion  of the  Westwood  merger,  the  Company  added  two
additional Bergen County branches and three additional ATM's, bringing the total
branch network to ten branches and nine ATM's.

In September 1998, the Company's  eleventh branch office was opened in Fairview,
New Jersey.  The Company expects that its other  operating  expenses in 1999 may
increase due to the costs associated with the opening of this new branch.

In October 1998, IMC Mortgage  Company,  L.P. (IMC), in which the Company has an
equity investment and an unsecured line of credit, announced that they intend to
explore financial and strategic alternatives including the possible sale of IMC.
See Note 22 to the Consolidated Financial Statements.

8
<PAGE>
                                                                       FOCUS '99


FINANCIAL CONDITION

The Company's  total assets  increased $88.0 million or 17.4%, to $593.9 million
at July 31, 1998 from $505.9  million at July 31, 1997 mainly as a result of the
Westwood acquisition, which increased assets $89.6 million, net of $10.6 million
of cash paid for the  acquisition.  Net loans receivable and deposits grew 27.8%
and 23.2% to $286.9  million and $456.9  million at July 31, 1998,  respectively
from  $224.6  million and $370.8  million at July 31,  1997,  respectively.  The
acquisition  of Westwood  contributed  $40.4  million and $89.6  million  toward
overall loan and deposit growth, respectively, during fiscal 1998.

Securities  available  for sale  decreased  $67.7  million,  or 64.1%,  to $37.9
million at July 31, 1998 from $105.6  million at July 31, 1997. The decrease was
mainly  attributable  to sales of $75.4  million,  maturities of $46.0  million,
principal  repayments  of $2.1  million,  and a decrease in market value (before
tax) of $14.0 million offset by purchases of $69.8 million.

Investment  securities  held to maturity  increased  $41.1 million or 96.4%,  to
$83.8 million at July 31, 1998 from $42.7 million at July 31, 1997. The increase
was due to net purchases of $45.1 million, $34.4 million from the acquisition of
Westwood and was offset by $40.4 million of maturities.

Mortgage-backed  securities  held to  maturity  decreased  $478,000,  or .5%, to
$101.8  million at July 31,  1998,  from $102.2  million at July 31,  1997.  The
decrease in  mortgage-backed  securities  resulted from principal  repayments of
$23.3  million,  offset by purchases of $6.0 million and $16.7  million from the
acquisition of Westwood.

Borrowings  increased  $3.6 million to $64.9 million at July 31, 1998 from $61.3
million at July 31, 1997.  Borrowed funds are both  short-term and long-term and
consist of lines of credit and Federal Home Loan Bank ("FHLB") advances.

Borrowings - ESOP  increased  $6.4 million to $8.8 million at July 31, 1998 from
$2.4 million at July 31, 1997.  The ESOP trust  purchased an additional  349,404
shares for $9.0 million. Such funds were borrowed from an unrelated third party.
See Note 15 to the Consolidated Financial Statements.

The net deferred tax liability and unrealized  gain on securities  available for
sale,  net of tax,  decreased  to $17,000  and $5.3  million  at July 31,  1998,
respectively,   from  $6.1   million  and  $14.5   million  at  July  31,  1997,
respectfully.  The decrease in these accounts was primarily  attributable to the
decrease in the market value of securities  available for sale.  The majority of
the decrease in such accounts was  attributable  to  Branchview's  investment in
Industry  Mortgage Company ("IMC"),  which consists of approximately 1.7 million
shares of common stock.  At July 31, 1998,  the market value of IMC decreased to
$16.2  million  from  $29.9  million  at  July  31,  1997.  At  July  31,  1998,
Branchview's  cost basis of IMC was $7.8  million.  As of October 16, 1998,  the
market value of the IMC stock was $1.8 million.

                                                                               9
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT


MARKET FOR COMMON STOCK

Lakeview's common stock is traded on the Nasdaq National Market under the symbol
of "LVSB".  At September 30, 1998,  Lakeview had  approximately 670 shareholders
(not  including  the number of persons or entities  holding  stock in nominee or
street name through various brokerage firms). As a result of continued earnings,
there has been a cash dividend since the fourth fiscal quarter in 1994. The cash
dividend paid was $.0235 in the fiscal  quarters ended July and October 1994 and
January 1995;  $.0258 in the fiscal quarters ended April,  July and October 1995
and January 1996;  $.0284 in the fiscal  quarters ended April,  July and October
1996; $.0313 in the fiscal quarters ended January,  April, July and October 1997
and January 1998;  and $.0625 in the fiscal  quarters ended April and July 1998.
On November 13, 1996 and October 15,  1997,  respectively,  Lakeview  paid a 10%
common stock  dividend  and a 100% stock  dividend (in the form of a two for one
common  stock  split) to all  shareholders  of record on  October  30,  1996 and
October 1, 1997,  respectively.  Cash dividends,  as described above, and market
prices set forth in the table below,  have been adjusted for the stock dividends
declared and paid by Lakeview.

Market prices for the quarters ended:
<TABLE>
<CAPTION>
<S>                                          <C>          <C>       <C>      <C>       <C>        <C>       <C>       <C>    
 ...............................................1996........................1997...............................1998............

 ...............................................Oct...........Jan......Apr......Jul......Oct...........Jan......Apr......Jul...

High .........................................$12.44.......$.15.69...$17.13...$.17.32..$.26.75.....$.26.50...$26.57....$.29.00

Low.............................................9.21.........11.25....13.75.....13.63....16.13.......23.75....23.25......23.00

Closing .......................................11.69.........15.38....13.82.....16.50....24.75.......25.00....23.25......23.50
</TABLE>

Lakeview's  ability to pay  dividends  to  shareholders  is  dependent  upon the
earnings from  investments and dividends it receives from Lakeview  Savings Bank
(the  "Bank").  Accordingly,  restrictions  on the  Bank's  ability  to pay cash
dividends  directly  affects the payment of cash  dividends by the Company.  The
Bank may not  declare or pay a dividend  if the  effect  would  cause the Bank's
regulatory  capital to be reduced below the amount  required for the liquidation
account  established  in connection  with the Bank's  conversion  from mutual to
stock form or the regulatory capital requirements imposed by the FDIC.

10
<PAGE>
                                                                       FOCUS '99


Average Balance Sheet

The  following  table sets forth certain  information  relating to the Company's
average  balance  sheet and  reflects  the average  yields  earned on assets and
average costs of liabilities  for the periods  indicated.  Such yields and costs
are  derived by dividing  income or expense by the average  balance of assets or
liabilities,  respectively,  for the periods  presented.  Average  balances  are
derived from daily balances.

<TABLE>
<CAPTION>
 ..........................................................................Years ended July 31,..................................
--------------------------------------------------------------------------------------------------------------------------------
 ...................................................1996..........................1997............................1998...........
--------------------------------------------------------------------------------------------------------------------------------
 ........................................................................(Dollars in thousands)

 ................................................Interest...Average.............Interest..Average..............Interest..Average.
 .......................................Average...Income/...Yield/.....Average...Income/..Yield/......Average...Income/..Yield/..
 .......................................Balance...Expense....Cost......Balance...Expense...Cost.......Balance...Expense...Cost...
--------------------------------------------------------------------------------------------------------------------------------
Interest earning assets:

<S>                                  <C>        <C>        <C>      <C>        <C>      <C>         <C>       <C>      <C>   
  Loans receivable (1)................$155,497...$14,131.....9.09%...$192,822...$ 16,841..8.73% .....$252,935..$22,351...8.84%
  Mortgage-backed securities                               
    held to maturity...................149,373.....9,605.....6.43.....112,464......7,319..6.51........100,263....6,443...6.43
  Investment securities                                    
    and federal funds (2)...............47,672.....3,004.....6.30......44,241......3,426..7.75.........66,371....5,111...7.70
  Securities availabe for                                  
    sale (3)............................58,719.....4,232.....7.21......93,307......5,256..5.63.........88,548....3,472...3.92
--------------------------------------------------------------------------------------------------------------------------------
  Total interest-earning assets........411,261....30,972.....7.53.....442,834.....32,842..7.42........508,117...37,377...7.36
Non-interest-earning assets.............29,502.........................30,058..........................34,144...................
--------------------------------------------------------------------------------------------------------------------------------
  Total assets........................$440,763...................... $472,892........................$542,261...................
--------------------------------------------------------------------------------------------------------------------------------
                                                          
Interest-bearing liabilities:                              
  Deposits............................$340,771...$14,064.....4.12....$345,829...$.13,988..4.04.%.....$380,710..$15,335....4.03%
  Borrowings............................42,162.....2,486.....5.89......59,810......3,330..5.57.........76,107....4,467....5.87
--------------------------------------------------------------------------------------------------------------------------------
   Total interest-bearing                                   
    liabilities........................382,933....16,550.....4.32.....405,639.....17,318..4.27........456,817...19,802....4.33
                                                           
Non-interest bearing                                       
  liabilities...........................12,212.........................20,939..........................30,446...................
--------------------------------------------------------------------------------------------------------------------------------
  Total liabilities....................395,145........................426,578.........................487,263...................
Stockholders' equity....................45,618.........................46,314..........................54,998...................
--------------------------------------------------------------------------------------------------------------------------------
  Total liabilities and                                    
    stockholders' equity..............$440,763.......................$472,892........................$542,261...................
--------------------------------------------------------------------------------------------------------------------------------
Net interest income..............................$14,422........................$.15,524.......................$17,575..........
--------------------------------------------------------------------------------------------------------------------------------
Interest rate spread (4).....................................3.21%........................3.15%...........................3.03%.
--------------------------------------------------------------------------------------------------------------------------------
Net yield on interest-                                     
  earning assets (5).........................................3.51%........................3.51%...........................3.46%
--------------------------------------------------------------------------------------------------------------------------------
Ratio of average interest-                                 
  earning assets to average                                
  interest-bearing liabilities...............................1.08x........................1.09x...........................1.11x
--------------------------------------------------------------------------------------------------------------------------------
                                                        
</TABLE>

(1)  Average balances include non-accrual loans.
(2)  Includes  investment  securities  held to  maturity,  federal  funds  sold,
     interest bearing deposits in other financial  institutions and Federal Home
     Loan Bank of New York stock.
(3)  At market  value.  
(4)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(5)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.

                                                                              11
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT

Rate/Volume Analysis

The table below sets forth  certain  information  regarding  changes in interest
income and interest expense of the Company for the periods  indicated.  For each
category   of   interest-earning   assets  and   interest-bearing   liabilities,
information  is  provided  on  changes  attributable  to (i)  changes  in volume
(changes  in  average  volume  multiplied  by old rate);  (ii)  changes in rates
(changes in rate multiplied by old average volume); (iii) changes in rate-volume
(changes in rate multiplied by the change in average volume).

<TABLE>
<CAPTION>

 .............................................................................Years ended July 31,..............................
------------------------------------------------------------------------------------------------------------------------------
 ..............................................................1996 vs. 1997........................1997 vs. 1998...............
------------------------------------------------------------------------------------------------------------------------------
 ...........................................................Increase (Decrease)..................Increase (Decrease)
 .................................................................Due to...............................Due to...................
------------------------------------------------------------------------------------------------------------------------------
 ......................................................................Rate/....................................Rate/...........
 .....................................................Volume....Rate...Volume....Net.........Volume.....Rate....Volume.....Net..
------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>      <C>     <C>      <C>           <C>     <C>       <C>      <C>   
Interest income:
  Loans receivable...................................$3,392...$(550)..$(132)..$2,710........$5,250 ..$..198....$...62...$5,510
  Mortgage-backed securities held to maturity........(2,373)....116.....(29)..(2,286).........(794).....(91)........9.....(876)   
  Investment securities and federal funds..............(216)....687.....(49).....422.........1,714......(19.......(10)...1,685
  Securities available for sale.......................2,493....(925)...(544)...1,024..........(268)..(1,597).......81...(1,784)   
------------------------------------------------------------------------------------------------------------------------------
Total interest income.................................3,296....(672)...(754)...1,870.........5,902...(1,509)......142    4,535

Interest expense:
  Deposits..............................................209....(282).....(3).....(76)........1,411......(58).......(6)...1,347
  Borrowings..........................................1,040....(137).....(9).....844...........908......179........50....1,137
------------------------------------------------------------------------------------------------------------------------------
Total interest expense................................1,249....(419)....(62).....768.........2,319......121........44....2,484
------------------------------------------------------------------------------------------------------------------------------
Net change in net interest income....................$2,047...$(253)..$(692)..$1,102........$3,583..$(1,630)...$...98...$2,051
==============================================================================================================================
</TABLE>

RESULTS OF OPERATIONS

Net income increased $3.3 million or 55.8%, to $9.4 million for fiscal 1998 from
$6.1  million  for  fiscal  1997.  The  increase  in net  income  was  partially
attributable  to a $65.3  million  increase in the  average  balance of interest
earning assets, which was mainly due to the Westwood  acquisition,  and was also
due to an increase in securities gains of $3.4 million before tax.

Net income decreased  $213,000 or 3.4% to $6.1 million for fiscal 1997 from $6.3
million for fiscal 1996.  The decrease in net income was primarily  attributable
to the SAIF  assessment  before taxes of $2.2  million  offset by an increase of
$1.1 million in other income.  See Notes 21 and 6 to the Consolidated  Financial
Statements, respectively.

Net Interest Income:  Net interest income is the most  significant  component of
the Company's  income from  operations.  Net interest  income is the  difference
between  interest  received  on  interest-earning  assets  (primarily  loans and
investment  securities)  and  interest  paid  on  interest-bearing   liabilities
(primarily  deposits and borrowed  funds).  Net interest  income  depends on the
volume and rate earned on  interest-earning  assets and the volume and rate paid
on interest-bearing liabilities.

Net interest  income  increased  $2.1 million or 13.2% to $17.6  million in 1998
compared to $15.5  million in 1997.  The increase was primarily due to growth in
average interest-earning assets to $508.1 million in 1998 from $442.8 million in
1997,  partially  offset by a decrease in the  interest  rate spread of 3.03% in
1998 compared to 3.15% in 1997. Net interest  margin  decreased to 3.46% in 1998
compared  to 3.51% in 1997.  The  majority of the  increase in average  interest
earning assets was the result of the Westwood acquisition.

The  increase  in  average  interest-earning  assets  from 1997 to 1998 of $65.3
million  reflects  an  increase  in average  loans of $60.1  million and average
investment securities held to maturity of $22.1 million, offset by a decrease in
average mortgage-backed securities held to maturity and securities 

12
<PAGE>
                                                                       FOCUS '99

available for sale of $16.9 million.  The increase in average  interest-earnings
assets  was  partially  funded  by  the  increase  in  average  interest-bearing
liabilities  of $51.2  million.  This increase in  interest-bearing  liabilities
reflects  the  increase  in average  borrowings  of $16.3  million  and  average
deposits of $34.9 million in 1998, primarily due to the Westwood acquisition.

The interest  rate spread  declined in 1998 compared to 1997 due to a decline in
the yield on  average  interest-earning  assets  to 7.36% in 1998 from  7.42% in
1997.  The cost of average  interest-bearing  liabilities  increased to 4.33% in
1998 from 4.27% in 1997. The yield on average  interest-earning  assets declined
in 1998 due to a decrease in yields on securities available for sale to 3.92% in
1998 from 5.63% in 1997 and mortgage-backed securities held to maturity to 6.43%
in 1998 from 6.51% in 1997.  The decline in yield of  securities  available  for
sale was the result of lower rates of interest and dividends.  Offsetting  these
declines, the yield on loans receivable increased to 8.84% in 1998 from 8.73% in
1997.  The  increase  in yield was the  result of  changing  the mix of the loan
portfolio  to  higher  yielding  loans.  The  increase  in the cost of funds was
affected by a 30 basis point  increase in the rate paid on borrowings and offset
by a 1 basis point decrease paid on deposits.

Net interest  income  increased  $1.1  million or 7.6% to $15.5  million in 1997
compared to $14.4  million in 1996.  The increase was primarily due to growth in
average interest-earning assets to $442.8 million in 1997 from $411.3 million in
1996,  partially  offset by a decrease in the  interest  rate spread of 3.15% in
1997 compared to 3.21% in 1996. However, the decline in the interest rate spread
in 1997 did not affect net interest  margin.  Net  interest  margin was 3.51% in
1997 and 1996.

The increase in average  interest-earning  assets of $31.6  million from 1996 to
1997  reflects  an  increase  in  average  loans of $37.3  million  and  average
securities  available for sale of $34.6 million  offset by a decrease in average
mortgage-backed and investment securities held to maturity of $40.3 million. The
increase in average interest-earning assets was partially funded by the increase
in average  interest-bearing  liabilities  of $22.7  million.  This  increase in
interest-bearing liabilities reflects the increase in borrowings and deposits in
1997.

The interest  rate spread  declined in 1997 compared to 1996 due to a decline in
the yield on average interest-earning assets to 7.42% in 1997 from 7.53% in 1996
offset by a decrease  in the cost of  average  interest-bearing  liabilities  to
4.27% in 1997 from 4.32% in 1996. The yield on average  interest-earning  assets
declined  in 1997 due to a  decrease  in  yields  on loans to 8.73% in 1997 from
9.09% in 1996 and investment and mortgage-backed  securities  available for sale
to 5.63% in 1997  from  7.21% in 1996.  The  decrease  in the cost of funds  was
affected by a 32 basis point  decrease  in the rate paid on  borrowings  and a 8
basis point decrease paid on deposits.

Provision for Loan Losses:  The Company  recorded a provision for loan losses of
$1.5 million in 1998 compared  with  $961,000 in 1997 and $664,000 in 1996.  The
increase in 1998 was  attributable to loan growth  primarily due to the Westwood
acquisition  and the  continued  change in the loan mix.  The increase in fiscal
1997 was  attributable  to loan  growth  and the  change  in the mix of the loan
portfolio.  Management  regularly  performs an analysis to identify the inherent
risks of loss in its loan  portfolio.  Thi  evaluation  includes  evaluations of
concentrations  of credit,  past loss experience,  current economic  conditions,
amount and composition of the loan portfolio (including loans being specifically
monitored by management),  estimated fair value of underlying  collateral,  loan
commitments outstanding,  delinquencies, and other information available at such
times.

The Company  will  continue to monitor  its  allowance  for loan losses and make
future  adjustments  to the  allowance  through the provision for loan losses as
economic  conditions dictate.  Management  continues to offer a wider variety of
loan  products  coupled  with the  continued  success of changing the mix of the
products  offered in the loan portfolio - from lower yielding loans (i.e.,  one-
to four family loans) to higher yielding loans (i.e., equity loans, multi-family
(five or more units) buildings, and commercial  (non-residential) mortgages. The
Company  maintains its allowance for loan losses at a level that it considers to
be  adequate  to provide for the  inherent  risk of loss in its loan  portfolio,
there can be no assurance that future losses will not exceed  estimated  amounts
or that  additional  provisions  for loan  losses will not be required in future
periods  due to the higher  degree of credit  risk which  might  result from the
change in the mix of the loan portfolio.

Other  Income:  Total  other  income  increased  $3.7  million or 45.8% to $11.8
million  for the year ended July 31,  1998 from $8.1  million for the year ended
July 31, 1997.  Realized  gains on  investments  increased  $3.4 million to $8.2
million in 1998 from $4.8 million in 1997. This increase  resulted from the sale
of Federal National Mortgage  Association  ("FNMA") stock, Student Loan Mortgage
Association  ("SLMA") stock,  Federal Home Loan Mortgage  Corporation  ("FHLMC")
stock and other equity  securities during 1998 Gains on sale of loans originated
for sale increased  $372,000 to $1.5 million in 1998, from $1.2 million in 1997.
The increase  was mainly  attributed  to the  operations  of LMD.  Loan fees and
service charges  increased  $294,000 to $1.5 million for the year ended July 31,
1998 from $1.2 million for the year ended July 31, 1997. The increase was due to
increases in NOW account  service fees due to an increase in the  deposits.  The
average balance of NOW

                                                                              13
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT


accounts and money market  deposit  accounts  increased  $14.4  million to $69.9
million for the year ended July 31,  1998 from $55.5  million for the year ended
July 31, 1997.

Total other income  increased $1.1 million or 15.3% to $8.1 million for the year
ended July 31, 1997 from $7.0 million for the year ended July 31, 1996. Realized
gains on  investments  increased  $2.0 million to $4.8 million in 1997 from $2.8
million in 1996. This increase resulted from the sale of other equity securities
during 1997.  Other operating  income decreased $1.9 million to $949,000 in 1997
from $2.9 million in 1996.  This was mainly  attributable to a decrease in other
income from  Branchview of $2.4 million.  In 1995,  Branchview sold its majority
interest in Residential Money Center, a residential mortgage company. See Note 6
to the Consolidated Financial Statements.

Other  Expenses:  Total other  expenses  decreased  $303,000  or 2.3%,  to $12.9
million in 1998 from $13.2 million in 1997.  The decrease in other  expenses was
primarily due to a $2.2 million decrease in federal deposit  insurance  premiums
("SAIF   recapitalization   expenses")   offset  by  increases  of  $907,000  in
compensation  and  employee  benefits,  $328,000 of  amortization  expenses  and
$545,000 in other  operating  expenses.  The  decrease in SAIF  recapitalization
expenses  was due to a one time  special  assessment  levied in  fiscal  1997 to
recapitalized the SAIF. See Note 21 to the Consolidated Financial Statements.

Compensation and employee benefits  increased  $907,000 or 15.9% to $6.6 million
in 1998 from $5.7 million in 1997. The increase was mainly  attributable  to the
increased  staff of the Company  with the merger of Westwood.  Compensation  and
employee  benefits  increased  $1.1  million  or 22.8% to $5.7 in 1997 from $4.6
million in 1996. The increase was mainly attributable to the amortization of the
ESOP of $901,000 due to the increase of the market value of the Company's  stock
and  $410,000  for  the  hiring  of  eleven  new  employees  for  the  Company's
subsidiary, LMD. LMD opened two additional offices during 1997 and closed one in
1998.

Net losses on real estate  owned  ("REO") for fiscal  1998  remained  relatively
constant.  REO  decreased  $715,000 to $206,000 in fiscal 1997 from  $921,000 in
fiscal 1996. The decrease was primarily attributed to the decrease in provisions
for REO loss to $44,000 in fiscal 1997 from $655,000 in fiscal 1996.  Management
regularly assesses the value of the REO portfolio based on available information
at such times  including  trends in local real estate  markets  and  appraisals.
Additional  provisions  for REO  losses  may be  required  as the result of this
assessment.

Amortization  of the  excess  of cost  over fair  value of net  assets  acquired
increased  $328,000 or 24.8% to $1.6  million in 1998 from $1.3 million in 1997.
The  increase  was  mainly  attributable  to the  goodwill  associated  with the
acquisition of Westwood.  Amortization  of the excess of cost over fair value of
net assets acquired remained constant for 1996 and 1997.

LIQUIDITY AND CAPITAL RESOURCES 

The  Company's  primary  sources  of  funds  includes  savings  deposits,   loan
repayments and  prepayments,  cash flow from  operations and borrowings from the
FHLB.  The  Company  uses  its  capital  resources   principally  to  fund  loan
originations and purchases, repay maturing borrowings,  investment purchases and
for short and long-term  liquidity needs. The Company expects to be able to fund
or refinance,  on a timely basis, its commitments and long-term liabilities.  As
of July 31, 1998, the Company had commitments to fund loans of $5.3 million.

The Company's liquid assets consist of cash and cash equivalents,  which include
investments  in highly  short-term  investments.  The level of these  assets are
dependent on the Company's operating, financing and investment activities during
any given  period.  At July 31, 1998,  cash and cash  equivalents  totaled $48.7
million.

Net cash provided by operating  activities for fiscal 1998 totaled $6.7 million,
as compared to $4.2 million for fiscal 1997 and $3.0 million for fiscal 1996.

Net cash provided by investing activities for fiscal 1998 totaled $57.3 million,
compared to cash used of $24.0  million in 1997 and $41.0  million in 1996.  The
increase of $81.3 million in fiscal 1998 was mainly attributed to a net decrease
in loans receivable of $39.2 million and a net decrease in securities  available
for sale of $39.8  million.  The  decrease  of $17.0  million in fiscal 1997 was
primarily attributable to an increase in 1996 of net purchases of investment and
mortgage-backed  securities  of $20.0  million  offset by cash used for net loan
originations  and purchases of $39.4  million,  investment in FHLB stock of $1.0
million,  and net  proceeds  from the  sale of  investment  and  mortgage-backed
securities of $40.0 million.

Net cash used in financing  activities  for the year ended July 31, 1998 totaled
$20.7 million.  This was a result of a net decrease in deposits of $4.7 million,
purchase of ESOP shares of $9.0  million and the  purchase of treasury  stock of
$11.4  million,  offset by the exercise of stock options of $2.1 million and the
sale of common stock by the ESOP of $2.3 million.

14
<PAGE>
                                                                       FOCUS '99


Net cash provided by financing activities for fiscal 1997 totaled $18.2 million.
This was a result of a net increase in deposits of $16.5 million and an increase
in net  borrowings of $8.9 million  offset by the purchase of treasury  stock of
$6.7 million and ESOP shares of $447,000.

Liquidity may be adversely  affected by unexpected  deposit outflows,  excessive
interest rates paid by competitors,  adverse  publicity  relating to the savings
and loan industry, and similar matters.  Management monitors projected liquidity
needs  and  determines  the  level  desirable,  based  in part on the  Company's
commitment to make loans and management's assessment of the Company's ability to
generate funds.  The Company is also subject to federal  regulations that impose
certain minimum capital requirements.

YEAR 2000 COMPLIANCE ISSUES

During fiscal 1998, the Company adopted a Year 2000 Compliance Plan (the "Plan")
and  established  a  Year  2000  Compliance  Committee  (the  "Committee").  The
objectives  of the Plan and the Committee are to prepare the Company for the new
millennium.  As recommended by the Federal  Financial  Institutions  Examination
Council,  the Plan  encompasses  the following  phases:  Awareness,  Assessment,
Renovation, Validation and Implementation.  These phases will enable the Company
to identify risks, develop an action plan, perform adequate testing and complete
certification that its processing systems will be Year 2000 ready.  Execution of
the  Plan is  currently  on  target.  The  Company  is  currently  in  Phase  3,
Renovation,  which includes code  enhancements,  program  changes,  hardware and
software  upgrades and system  replacements,  if  necessary.  Concurrently,  the
Company  is  also   addressing   some  issues  related  to  subsequent   phases.
Prioritization of the most critical applications has been addressed,  along with
contract and service agreements.  The primary operating software for the Company
is obtained and  maintained by an external  provider of software (the  "External
Provider").  The Company has maintained ongoing contact with this vendor so that
modification  of the software  for Year 2000  readiness is a top priority and is
expected to be accomplished, though there is no assurance, by December 31, 1998.
The Company has contacted  all other  material  vendors and suppliers  regarding
their Year 2000 state of  readiness.  Each of these third  parties has delivered
written  assurance  to the Company  that they  expect to be Year 2000  compliant
prior to the Year 2000. The Company is in the process of contacting all material
customers and  non-information  technology  suppliers  (i.e.,  utility  systems,
telephone  systems and  security  systems).  regarding  their Year 2000 state of
readiness. The Renovation phase is targeted for completion by December 31, 1998.
The  Validation  phase  involves  testing of changes to hardware  and  software,
accompanied  by monitoring  and testing with vendors.  The  Validation  Phase is
targeted for completion by June 30, 1999. The Implementation Phase is to certify
that systems are Year 2000 ready, along with assurances that any new systems are
compliant on a going-forward  basis.  The  Implementation  Phase is targeted for
completion by September 30, 1999.

Costs will be incurred due to the replacement of  non-compliant  teller hardware
and software.  The Company does not  anticipate  that the related  overall costs
will be material in any single year. In total,  the Company  estimates  that its
cost for  compliance  will amount to  approximately  $100,000  over the two year
period from 1998-1999,  of which  approximately  $25,000 was incurred as of July
31, 1998. No assurance can be given that the Year 2000  Compliance  Plan will be
completed  successfully by the Year 2000, in which event the Company could incur
significant  costs. If the External  Provider is unable to resolve the potential
problem in time, the Company would likely experience significant data processing
delays,  mistakes or failures.  These delays,  mistakes or failures could have a
significant adverse impact on the financial statements of the Company.

Successful  and  timely  completion  of  the  Year  2000  project  is  based  on
management's best estimates  derived from various  assumptions of future events,
which are  inherently  uncertain,  including  the  progress  and  results of the
companies  External  Provider,  testing  plans,  and all vendors,  suppliers and
customer readiness.

IMPACT OF INFLATION AND CHANGING PRICES

Unlike most industrial  companies,  substantially  all the assets of the Company
are monetary in nature. As a result, interest rates have a greater impact on the
Company's  performance  than do the  effects  of  general  levels of  inflation.
Interest  rates do not  necessarily  move in the same  direction  or to the same
extent as the price of goods and services.

                                                                              15
<PAGE>
   
LAKEVIEW FINANCIAL CORP. 1998 ANNUAL REPORT

Independent Auditors' Report

KPMG Peat Marwick LLP

The Board of Directors and Stockholders
Lakeview Financial Corp. and Subsidiaries
Paterson, New Jersey:

We have  audited  the  accompanying  consolidated  balance  sheets  of  Lakeview
Financial  Corp. and  Subsidiaries as of July 31, 1997 and 1998, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the years in the three-year  period ended July 31, 1998.  These  consolidated
financial statements are the responsibility of the Corporation's management. Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 Lakeview Financial
Corp.  and  Subsidiaries  as of July 31, 1997 and 1998, and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended July 31, 1998 in conformity with generally accepted accounting principles.


/s/KPMG Peat Marwick LLP

Short Hills, New Jersey
September 2, 1998, except as to Note 22,
which is as of October 16, 1998



    
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT

Lakeview Financial Corp. and Subsidiaries
Consolidated Balance Sheets
As of July 31, 1997 and 1998
<TABLE>
<CAPTION>
 ..........................................................................................1997.......................1998.........
----------------------------------------------------------------------------------------------------------------------------------
 ...................................................................................................(Dollars in thousands).........
<S>                                                                                     <C>                               <C>     
Assets
Cash on hand and in banks...............................................................$...5,399.........................$..8,773

Federal Funds sold (note 12)....................................................................-...........................39,900
----------------------------------------------------------------------------------------------------------------------------------
Total cash and cash equivalents.............................................................5,399...........................48,673
Investment securities held to maturity, market value of $41,935
   and $83,109 at July 31, 1997 and 1998, respectively (note 3)............................42,682...........................83,831
Securities available for sale (notes 4 and 12)............................................105,592...........................37,867
Mortgage-backed securities held to maturity, market value of $102,345
   and $101,798 at July 31, 1997 and 1998, respectively (notes 5 and 12)..................102,249..........................101,771
Loans receivable, net (notes 6, 7 and 12).................................................224,564..........................286,869
Real estate owned, net (note 8).............................................................1,929..............................505
Federal Home Loan Bank of New York Stock, at cost (note 12).................................3,550............................4,626
Accrued interest receivable (note 9)........................................................3,476............................3,068
Office properties and equipment, net (note 10)..............................................4,028............................4,623
Excess of cost over fair value of net assets acquired, net (note 2).........................8,856...........................18,643
Other assets................................................................................3,557............................3,380
----------------------------------------------------------------------------------------------------------------------------------
  Total assets..........................................................................$.505,882.........................$593,856
==================================================================================================================================

Liabilities and Stockholders' Equity
Deposits (note 11)........................................................................370,787..........................456,880
Borrowings (note 12).......................................................................61,250...........................64,928
Borrowings - Employee Stock Ownership Plan (ESOP) (note 15) ................................2,354............................8,783
Advance payments by borrowers for taxes and insurance.......................................2,259............................2,934
Net deferred tax liability (note 13)........................................................6,094...............................17
Other liabilities...........................................................................1,329............................3,707
----------------------------------------------------------------------------------------------------------------------------------
  Total liabilities.......................................................................444,073..........................537,249

Common stock - $2.00 par value;  authorized  10,000,000 
   shares, issued 6,441,504 shares and outstanding 4,509,054
   and 4,880,268 shares at July 31, 1997 and 1998...........................................6,441...........................12,883
Additional paid-in capital.................................................................33,188...........................30,905
Retained income............................................................................28,617...........................30,500
Treasury stock at cost, 1,932,450 and 1,561,236 shares at
   July 31, 1997 and 1998 (note 18).......................................................(17,358).........................(13,343)
Unrealized gain on securities available for sale, net of tax...............................14,458............................5,306
Unallocated ESOP shares....................................................................(2,407)..........................(8,893)
Unallocated Management Stock Bonus Plan (MSBP) shares......................................(1,130)............................(751)
----------------------------------------------------------------------------------------------------------------------------------
   Total stockholders' equity (notes 13, 15, 17 and 18) ...................................61,809...........................56,607
Commitments and contingencies (notes 7 and 16)
----------------------------------------------------------------------------------------------------------------------------------
  Total liabilities and stockholders' equity............................................$.505,882.........................$593,856
==================================================================================================================================
</TABLE>

          See accompanying notes to consolidated financial statements.

16

<PAGE>
                                                                       FOCUS '99

Lakeview Financial Corp. and Subsidiaries
Consolidated Statemetns of Income
Years ended July 31, 1996, 1997 and 1998

<TABLE>
<CAPTION>

 ...................................................................................1996...........1997...........1998...
------------------------------------------------------------------------------------------------------------------------
 ................................................................................(Dollars in thousands, except share data)
<S>                                                                           <C>             <C>            <C>        
Interest income:
  Loans receivable............................................................$.....14,131....$...16,841.....$....22,351
  Mortgage-backed securities held to maturity........................................9,605.........7,319...........6,443
  Investment securities held to maturity and federal funds...........................3,004.........3,426...........5,111
  Securities available for sale......................................................4,232.........5,256...........3,472
------------------------------------------------------------------------------------------------------------------------
  Total interest income.............................................................30,972........32,842..........37,377
------------------------------------------------------------------------------------------------------------------------
Interest expense:
  Deposits (note 11)................................................................14,064........13,988..........15,335
  Borrowings.........................................................................2,486.........3,330...........4,467
------------------------------------------------------------------------------------------------------------------------
  Total interest expense............................................................16,550........17,318..........19,802
------------------------------------------------------------------------------------------------------------------------
  Net interest income...............................................................14,422........15,524..........17,575

   Provision for loan losses (note 7)..................................................664...........961...........1,500
------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses.................................13,758........14,563..........16,075
------------------------------------------------------------------------------------------------------------------------
Other income:
  Loan fees and service charges......................................................1,153.........1,193...........1,487
  Net realized gains on sales of securities (note 4).................................2,769.........4,788...........8,191
  Gains on sales of loans originated for sale..........................................247.........1,172...........1,544
  Other operating income (note 6)....................................................2,861...........949.............590
------------------------------------------------------------------------------------------------------------------------
  Total other income.................................................................7,030.........8,102..........11,812
------------------------------------------------------------------------------------------------------------------------
Other Expenses:
  Compensation and employee benefits (notes 14 and 15) ..............................4,649.........5,708...........6,615
  Office occupancy and equipment expense (note 10) ....................................871...........932.............984
  Net loss on real estate owned (note 8) ..............................................921...........206.............290
  Other operating expenses...........................................................3,107.........2,770...........3,315
  SAIF recapitalization assessment (note 21).............................................-.........2,219...............-
  Amortization of the excess of cost over fair value of net
  assets acquired (note 2)...........................................................1,320.........1,320...........1,648
------------------------------------------------------------------------------------------------------------------------
  Total other expenses..............................................................10,868........13,155..........12,852
------------------------------------------------------------------------------------------------------------------------
  Income before income taxes.........................................................9,920.........9,510..........15,035
------------------------------------------------------------------------------------------------------------------------
Income taxes (note 13)
  Current............................................................................4,112.........3,836...........5,925
  Deferred............................................................................(466).........(387)...........(335)
------------------------------------------------------------------------------------------------------------------------
  Total income taxes.................................................................3,646.........3,449...........5,590
------------------------------------------------------------------------------------------------------------------------
  Net income..................................................................$......6,274....$....6,061.....$.....9,445
Net income per common share
Basic.........................................................................$.......1.22....$.....1.49.....$......2.51
Diluted.......................................................................$.......1.14....$.....1.28.....$......2.28
Weighted average number of shares
Basic............................................................................5,122,875.....4,080,871.......3,759,797
Diluted..........................................................................5,490,546.....4,665,542.......4,135,006
</TABLE>

          See accompanying notes to consolidated financial statements.

                                                                              17

<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT

Lakeview Finaical Corp. and Subsidiaries
Consolidated Statemetns of Cash Flows
Years ended July 31, 1996, 1997 and 1989

<TABLE>
<CAPTION>
 .......................................................................................................................
 ...........................................................................1996...................1997.........1998....
-----------------------------------------------------------------------------------------------------------------------
 ....................................................................................(Dollars in thousands).............

<S>                                                                     <C>                    <C>          <C>     
Cash flows from operating activities:
Net income..............................................................$..6,274...............$..6,061.....$..9,445
  Adjustments to reconcile net income to net cash
  provided by operating activities:
  Amortization of the excess of cost over fair
  value of net assets acquired.............................................1,320..................1,320........1,648
  Amortization of discounts and premiums, net...............................(474)..................(374)......(2,496)
  Provision for loan losses and real estate owned..........................1,319..................1,005........1,558
  Gain on sale of loans......................................................(10)....................(5)...........-
  Net (gain) loss on sale of real estate owned...............................(26)...................(48)...........3
  Net realized gains on sales of securities...............................(2,769)................(4,788)......(8,191)
  Gains on sales of loans originated for sale...............................(247)................(1,172)......(1,544)
  Purchases of trading securuties........................................(15,871)...............(20,776)......(25,100)
  Proceeds from sale of trading securities................................16,147.................21,416........25,311
  Loans originated for sale...............................................(5,930)...............(20,602)......(31,757)
  Proceeds from loans originated for sale..................................6,177.................21,774........33,301
  (Increase) decrease in accrued interest receivable........................(928)...................171.........1,420
  Net (decrease) increase in deferred loan fees..............................(68)...................(34)............5
  (Increase) decrease in other assets.......................................(507).................1,627...........353
  Amortization of ESOP shares................................................313....................901...........566
  Amortization of MSBP shares................................................446....................482...........638
  (Decrease) increase in other liabilities................................(2,473)................(3,056)........1,208
  Depreciation expense, net..................................................287....................320...........337
---------------------------------------------------------------------------------------------------------------------
  Net cash provided by operating activities................................2,980..................4,222.........6,705
---------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Origination of loans...................................................(40,783)...............(78,889)......(62,354)
  Principal payments on loans.............................................20,367.................19,657........41,952
  Purchase of loans.......................................................(2,687)................(3,976)......(3,214)
  Proceeds from the sale of loans............................................925....................410............-
  Net increase in office properties and equipment...........................(171)..................(166)........(286)
  Principal payments on mortgage-backed securities
  held to maturity........................................................25,230.................19,382........23,304
  Purchases of mortgage-backed securities
  held to maturity........................................................(2,773).....................-........(5,983)
  Maturities and calls of securities held to maturity.....................41,096 .................7,000........40,444
  Purchase of investment securities held to maturity....................(107,027)................(8,812)......(45,123)
  Proceeds from sale of securities available for sale.....................37,441..................51,894.......83,420
  Purchases of securities available for sale.............................(34,163)................(34,873).....(69,821)
  Proceeds from maturity of securities available for sale.................18,319...................3,000...... 45,968
  Principle payments on securities available for sale......................1,534...................1,785........2,063
  Purchases of Federal Home Loan Bank Stock....................................-................. ..(963)........(500)
</TABLE>
                                                                     (continued)
18
<PAGE>
                                                                       FOCUS '99

Lakeview Financial Corp. and Subsidiaries
Consoldiated Statements of Cash Flows
Years ended July 31, 1996, 1997 and 1998 continued


<TABLE>
<CAPTION>

 ...........................................................................1996..........1997..........1998.
------------------------------------------------------------------------------------------------------------
 ...............................................................................(Dollars in thousands).......

<S>                                                                     <C>            <C>          <C>     
Cash flows from investing activities, cont.:
  Payment for purchase of Westwood Financial
  Corporation, net of cash acquired.....................................$......-.......$......-.....$..5,724
Proceeds from sale of real estate owned....................................1,645............593........1,659
------------------------------------------------------------------------------------------------------------
  Net cash (used in) provided by  investing activities...................(41,047).......(23,958)......57,253
------------------------------------------------------------------------------------------------------------
  Cash flows from financing activities:
  Increase (decrease) in deposits.........................................10,757.........16,541.......(4,685)
  Increase in borrowings..................................................34,863..........8,882..........107
  Increase in advance payments by borrowers
  for taxes and insurance....................................................211............547..........674
  Purchase of treasury stock..............................................(6,685)........(6,703).....(11,389)
  Exercise of stock options....................................................-..............-........2,121
  Sale of common stock by ESOP.................................................-..............-........2,334
  Purchase of shares by ESOP..............................................(1,616)..........(447)......(9,001)
  Cash dividends paid.......................................................(582)..........(587)........(845)
------------------------------------------------------------------------------------------------------------
  Net cash provided by (used in) financing activities.....................36,948.........18,233......(20,684)
------------------------------------------------------------------------------------------------------------
  Net (decrease) increase in cash and cash equivalents....................(1,119)........(1,503).......43,274
Cash and cash equivalents at beginning of year.............................8,021..........6,902.........5,399
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year................................$..6,902.......$..5,399......$.48,673
------------------------------------------------------------------------------------------------------------
Cash paid during the year for:
Interest..................................................................16,541.........17,688........19,112
Income taxes...............................................................4,768..........1,735.......  4,714
Supplemental disclosure of noncash investing
and financing activities:
Transfer of loans receivable to real estate owned............................331............732...........295
Charge-off of loans receivable...............................................429............699...........987
Charge-off of real estate owned..............................................654.............44............58
Transfer of investment securities held to maturity
to securities available for sale..........................................80,858..............-.............-
Transfer of mortgage-backed securities held to maturity
to securities available for sale..........................................31,747..............-.............-
Transfer of restricted equity securities to securitiesavailable for sale.......-..........7,806.............-
</TABLE>

          See accompanying notes to consolidated financial statements.

                                                                              19
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT

Lakeview Financial Corp. and Subsidiaries
Consolidated Statemetns of Stockholders' Equity
Years ended July 31, 1996, 1997 and 1998

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
 ....................................................................................Number..........................Additional
 ...................................................................................of common.........Common...........paid-in
 ....................................................................................shares............stock...........capital
--------------------------------------------------------------------------------------------------------------------------------
<S>             <C> <C>                                                          <C>                  <C>              <C>    
Balance at July 31, 1995..........................................................4,804,904...........$.5,324..........$21,734
Net income................................................................................-.................-................-
Cash dividend ($.11 per share)............................................................-.................-................-
Stock dividend (10%)................................................................370,486...............532............4,158
Purchase of treasury stock.........................................................(643,982)................-................-
Common stock acquired by ESOP.............................................................-.................-................-
Amortization of ESOP shares...............................................................-.................-..............169
Amortization of MSBP shares...............................................................-.................-..............126
Change in unrealized loss on securities available for sale, net of tax....................-.................-................-
--------------------------------------------------------------------------------------------------------------------------------
Balance at July 31, 1996..........................................................4,531,408...........$ 5,856..........$26,187
--------------------------------------------------------------------------------------------------------------------------------
Net income................................................................................-.................-................-
Cash dividend ($.12 per share)............................................................-.................-................-
Stock dividend (10%)...............................................................(497,586)..............585............6,256
Purchase of treasury stock..........................................................475,232.................-................-
Common stock acquired by ESOP.............................................................-.................-................-
Amortization of ESOP shares...............................................................-.................-..............554
Amortization of MSBP shares...............................................................-.................-..............191
Change in unrealized gain on securities available for sale, net of tax....................-.................-................-
--------------------------------------------------------------------------------------------------------------------------------
Balance at July 31, 1997..........................................................4,509,054...........$..6,441........$ 33,188
--------------------------------------------------------------------------------------------------------------------------------
Net income................................................................................-..................-...............-
Cash dividend ($.19 per share)............................................................-..................-...............-
Restatement of par value of common stock..................................................-..............6,442..........(6,442)
Purchase of treasury stock.........................................................(489,053).................-...............-
Common stock acquired by ESOP.............................................................-..................-...............-
Sale of stock by ESOP.....................................................................-..................-...............-
Amortization of ESOP shares...............................................................-..................-.............385
Amortization of MSBP shares...............................................................-..................-.............259
Change in unrealized gain on securities available for sale, net of tax....................-..................-...............-
Exercise of stock options...........................................................458,924..................-...............-
Reissuance of treasury stock in connection with acquisition.........................401,343..................-...........3,515
--------------------------------------------------------------------------------------------------------------------------------
Balance at July 31, 1998..........................................................4,880,268............$12,883.........$30,905
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

20

<PAGE>
                                                                       FOCUS '99

<TABLE>
<CAPTION>
 ..................................................Unrealized gain..........Unallocated........Unallocated........Total.....
 .........Retained..............Treasury........(loss) on securities........... ESOP..............MSBP........stockholders'.
 ..........income.................stock..........available for sale...........shares.............shares..........equity.....
---------------------------------------------------------------------------------------------------------------------------
 ...(Dollars in thousands).........................................................
<S>       <C>                   <C>                  <C>                      <C>                <C>              <C>     

 .........$ 28,982...............$  (3,970).........$....(55).................$   (835)..........$(1,740)..........$ 49,440
 ............6,274.......................-.................-........................ -.................-............. 6,274
 .............(582)......................-.................-........................ -.................- ..............(582)
 ...........(4,690)......................-.................-........................ -.................- ................ -
 ................-..................(6,685)................-........................ -.................-.............(6,685)
 ................-.......................-.................-................... (1,616)................- ............(1,616)
 ................-.......................-.................-...................... 144.................-................313
 ...............-.......................-.................-........................ -...............320................446
 ................-.......................-............(1,830)....................... -.................-.............(1,830)
---------------------------------------------------------------------------------------------------------------------------
 .........$ 29,984...............$ (10,665).........$.(1,885)................. $(2,307)..........$(1,420)..........$ 45,760
---------------------------------------------------------------------------------------------------------------------------
 ............6,061.......................-.................-........................ - ............... -..............6,061
 .............(587)......................-.................-........................ - ............... -...............(587)
 ...........(6,841)......................-.................-........................ - ............... -..................-
 ................-..................(6,703)................-........................ -.................-.............(6,703)

 ................-.......................-.................-..................... (447)................-...............(447)
 ................-.......................-.................-...................... 347.................-................901
 ................-.......................-.................-........................ -...............290................481

 ................-.......................-............16,343.........................-.................-.............16,343
---------------------------------------------------------------------------------------------------------------------------
 .........$ 28,617...............$ (17,358)..........$14,458.................. $(2,407)          $(1,130)..........$.61,809
---------------------------------------------------------------------------------------------------------------------------
 ............9,445.......................-.................-........................ -.................-............. 9,445
 .............(845)......................-.................-........................ -.................- ..............(845)
 ................-.......................-.................-........................ -.................-................. -
 ................-.................(11,389)................-........................ - ................- ...........(11,389)
 ................-.......................-.................-................... (9,001)................- ............(9,001)
 ................-.......................-.................-.....................2,334 ............... - ............ 2,334
 ................-.......................-.................-...................... 181 ................- .............. 566
 ................-.......................-.................-........................ - ..............379 .............. 638
 ................-.......................-............(9,152)....................... - ............... - ............(9,152)
 ...........(6,717)..................8,839.................-........................ - ............... -............. 2,122
 ................-...................6,565.................-........................ - ............... - ............10,080
---------------------------------------------------------------------------------------------------------------------------
 ..........$30,500...............$ (13,343)...........$5,306.................. $(8,893)...........$.(751)..........$ 56,607
----------------------------------------------------------------------------------------------------------------------------

</TABLE>

           See accompanying notes to consolidated financial statements

                                                                              21

<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT

Lakeview Financial Corp. and Subsidiaries
Note to Consolidated Financial Statements
July 31, 1997 and 1998

Note 1
Summary of Significant Accounting Policies

The following items comprise the significant  accounting policies which Lakeview
Financial Corp. and Subsidiaries  ("Lakeview")  used in preparing and presenting
these consolidated financial statements:

Business:

Lakeview  provides a full range of retail banking  services through its branches
in Passaic and Bergen Counties,  New Jersey.  Lakeview is subject to competition
from other  financial  institutions.  Lakeview is subject to the  regulations of
certain  regulatory  agencies  and  undergoes  periodic  examinations  by  those
regulatory agencies.

Material  estimates that are particularly  susceptible to significant  change in
the near term relate to the  determination  of the allowance for loan losses and
the valuation of real estate  acquired in  connection  with  foreclosures  or in
settlement of loans. It is management's judgment that the allowance for loan and
real estate  losses are adequate to provide for  potential  loan and real estate
losses.  

Principles of Consolidation:  

The  accompanying  consolidated  financial  statements  include the  accounts of
Lakeview  Financial Corp. and its wholly owned  subsidiaries,  Lakeview  Savings
Bank (Bank), LVS, Inc. (LVS),  Lakeview  Investment Services Inc. (LISI),  North
Properties, Inc. (North Properties), Branchview, Inc. (Branchview), and Lakeview
Credit  Card  Services,  Inc.  (LCCS),  and its 90%  owned  subsidiary  Lakeview
Mortgage  Depot,  Inc.  (LMD).  LVS,  LISI and North  Properties  are  currently
inactive.  All  significant  inter-company  accounts an  transactions  have been
eliminated in consolidation.

Basis of Financial Statement Presentation:  

The  consolidated  financial  statements  have been prepared in conformity  with
generally  accepted  accounting   principles.   In  preparing  the  consolidated
financial  statements,  management is required to make estimates and assumptions
that affect the reported  amounts of assets and  liabilities  as of the dates of
the  consolidated  balance sheets,  and revenues and expenses for the years then
ended.  Actual  results  could differ  significantly  from those  estimates  and
assumptions.

Cash and Cash  Equivalents:

For purposes of reporting cash flows, cash and cash equivalents  include cash on
hand and in banks and federal funds sold.

Investment and Mortgage-Backed Securities:

The  Bank  classifies  debt,   readily-marketable   equity  and  mortgage-backed
securities in one of the following categories (i) "held to maturity" (management
has a positive intent and ability to hold to maturity), which are to be reported
at amortized  cost; (ii) "trading"  (held for current  resale),  which are to be
reported at fair value with unrealized gains and losses included in earnings and
(iii)  "available-for-sale"  (all  other  debt,  readily  marketable  equity and
mortgage-backed  securities),  which  are to be  reported  at fair  value,  with
unrealized  gains and losses excluded from earnings and reported,  net of income
tax, as a separate component of equity.

In November  1995, the Financial  Accounting  Standards  Board  ("FASB")  issued
"Special Report - "A Guide to  Implementation of Statement 115 on Accounting for
Certain  Investments in Debt Equity  Securities," within which there was offered
transition  guidance permitting an enterprise to reassess the appropriateness of
the  classifications of all of its securities before December 31, 1995. The Bank
reassessed its  classifications,  and on December 31, 1995,  transferred  $112.6
million in amortized  cost of investment and  mortgage-backed  securities to the
available for sale  classification.  The related net  unrealized  gain after tax
effect as of the date of transfer was $157,000.

Premiums and discounts on debt and  mortgage-backed  securities are amortized to
expense and  accreted to income,  respectively  over the  estimated  life of the
security using a method that approximates the level yield method.

Gains and losses on the sale of securities  are based upon the amortized cost of
the security using the specific identification method.

Loans:

Loans are stated at principal amounts outstanding,  net of unearned discount and
net  deferred  loan  origination  fees and  costs.  Interest  income on loans is
accrued  and  credited  to  interest  income as  earned.

Certain direct costs  associated  with the loan  origination  process are netted
against  origination fees received,  with the net resulting amount accreted over
the estimated lives of the loan using the level-yield method as an adjustment to
the loan's yield.

Loans are generally placed on nonaccrual status when a loan becomes more than 90
days past due or it appears that interest is uncollectible.  Previously  accrued
and unpaid  interest is  reversed  when a loan is placed on  nonaccrual  status.
Interest income on nonaccrual loans is recognized only in the period in which it
is ultimately collected. After principal and interest payments have been brought
current and future  collectibility is reasonably assured,  loans are returned to
accrual status.

22
<PAGE>
                                                                       FOCUS '99


The  Bank  defines  the  population  of  impaired  loans  to be all  non-accrual
commercial  real  estate,  multi-family  and  land  loans.  Impaired  loans  are
individually  assessed to  determine  that the loan's  carrying  value is not in
excess of the fair value of the  collateral  or the present  value of the loan's
expected  future  cash  flows.   Smaller  balance  homogeneous  loans  that  are
collectively  evaluated for impairment,  such as residential  mortgage loans and
installment loans, are specifically excluded from the impaire loan portfolio.

Income  recognition  policies  for  impaired  loans are the same as  non-accrual
loans.  Gains  and  losses  on  loan  sales  are  recorded  using  the  specific
identification  method.  

Real Estate Owned: 

Real estate owned,  acquired through foreclosure or deed in lieu of foreclosure,
is  carried  at the lower of  estimated  fair  value as  determined  by  current
appraisals,  less estimated  disposition costs or the balance of the loan on the
property  at  date  of  acquisition.  Costs  relating  to  the  development  and
improvement  of property  are  capitalized,  whereas  those  relating to holding
property are charged to expense. Losses are charged to operations as incurred or
when it is determined  that the  investment in real estate owned is greater than
its estimated net realizable value.

Allowances For Loan Losses And Real Estate Owned:

The allowances  for loan losses and real estate owned are based on  management's
evaluations  of the  adequacy  of the  allowances  based on the Bank's past loss
experience,  known and inherent risks in the portfolio,  adverse situations that
may affect the borrower's  ability to repay,  estimated  value of any underlying
collateral,  and  current  economic  conditions.   Additions  are  made  to  the
allowances through periodic provisions which are charged to earnings. All losses
of principal are charged to the allowances when the loss actually occurs or when
a determination is made that a loss is probable.

Federal  Home Loan Bank of New York  Stock:

The Bank,  as a member of the Federal  Home Loan Bank of New York  ("FHLB"),  is
required  to hold  shares of capital  stock in the FHLB of New York in an amount
equal to 1% of the Bank's outstanding  balance of residential  mortgage loans or
5% of its outstanding advances from the FHLB of New York, whichever is greater.

Office Properties and Equipment:  

Premises,   furniture  and  equipment  are  stated  at  cost,  less  accumulated
depreciation  and  amortization.   Depreciation  and  amortization  charges  are
computed using the straight-line method.  Premises,  furniture and equipment are
depreciated over the estimated  useful life of the assets,  except for leasehold
improvements,  which are  amortized  over the term of the lease or the estimated
useful life of the asset,  if shorter.  Estimated  useful lives are ten to forty
years for premises, and three to ten years for furniture and equipment.

Expenditures for maintenance and repairs are expensed as incurred.  The costs of
major renewals and  improvements  are  capitalized.  Premises and major items of
furniture and equipment are removed from the property  accounts upon disposition
at their carrying amount,  and gains or losses on such transactions are included
in other income or expense.

Excess of Cost Over Fair Value of Net Assets Acquired:

The  excess of cost over fair  value of net  assets  acquired  is  amortized  to
expense over the expected  life of the acquired  assets using the  straight-line
method.  Core deposit studies  regarding the retention of the deposits  acquired
are performed by the Bank on an annual basis. After reviewing the results of the
core deposit studies, a write-down of the core deposit premium may be recognized
if the current balance of the core deposit premium is overstated.

Stock Option Plans:

Lakeview  applies the "intrinsic  value based method" as described in Accounting
Principles  Board  ("APB")  Opinion  No.  25  "Accounting  for  Stock  Issued to
Employees,"  and  related  interpretations  in  accounting  for its  stock-based
compensation.  Accordingly,  no  compensation  cost has been  recognized for the
stock option plans.

Income Taxes:  

Lakeview  accounts  for  income  taxes  through   recognition  of  deferred  tax
liabilities and assets for the expected  future tax  consequences of events that
have been  included  in the  financial  statements  or tax  returns.  Under this
method,  deferred  tax  liabilities  and  assets  are  determined  based  on the
difference  between  the  financial  statement  and  tax  bases  of  assets  and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences are expected to be settled (see Note 13).

Net Income Per Share:

Basic net income per share is  computed  based upon income  available  to common
shareholders divided by the weighted average number of common shares outstanding
for the period.  Diluted net income per share is calculated  based on net income
available  to  common  stockholders  divided  by  the  average  weighted  shares
outstanding  including  common stock  equivalents  utilizing the treasury  stock
method. 

The  following   reconciles  the  weighted   average  number  of  common  shares
outstanding  used to  calculate  basic and  diluted  net income  per share.  The
weighted  average number of shares has been adjusted for all stock dividends and
splits.

                                                                              23
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT

<TABLE>
<CAPTION>

 ........................................... ...1996..............1997..................1998..
------------------------------------------------------------------------------------------------
<S>                                        <C>                 <C>                 <C>       
Weighted Average Number of Common Shares
Outstanding - Basic.........................5,122,875...........4,080,871...........3,759,797
Effect of Dilutive Securities:
Qualified Stock Options.......................199,291.............320,020.............117,678
Non-Qualified Stock Options...................103,986.............203,952.............252,332
MSBP Shares....................................64,394..............50,699...............5,199
Weighted Average Number of Common Shares
Outstanding - Diluted.......................5,490,546.......... 4,665,542.......... 4,135,006
------------------------------------------------------------------------------------------------
</TABLE>

Reclassifications:

Certain reclassifications have been made to the 1996 and 1997 amounts to conform
to the 1998 presentation.

Note 2
Acquisitions:

On  February  27,  1998,   Lakeview  acquired  Westwood  Financial   Corporation
("Westwood"),  a New Jersey  Savings Bank, in a transaction  accounted for under
the purchase  method of  accounting.  At February  27, 1998,  Westwood had total
assets   of   $100.2   million   (primarily   investments   of  $34.4   million,
mortgage-backed  securities  of $16.7  million and loans of $40.4  million)  and
deposits  and   stockholder's   equity  of  $89.6   million  and  $8.1  million,
respectively.  Lakeview paid $10.6 million in cash and issued  401,343 shares of
stock for a value of $10.1  million  resulting  in  goodwill  of $10.4  million.
Goodwill is being  amortized  on a  straight-line  basis over a 15 year  period.
Total  amortization  charged to date amounts to $289,000 for the year ended July
31,  1998.  The July 31,  1998  consolidated  financial  statements  of Lakeview
include the assets,  liabilities and results of operations of Westwood since the
acquisition date.

The following supplemental schedule presents the pro forma results of operations
for 1997 and 1998 as though the  companies had combined at the beginning of 1997
and 1998, after giving effect to certain adjustments,  including amortization of
goodwill.  The pro forma results of operations  do not  necessarily  reflect the
results of  operations  that would  have  occurred  had  Lakeview  and  Westwood
constituted a single entity during such periods.

 ...................................................Years ended July 31,......
 ................................................1997.................1998....
-----------------------------------------------------------------------------
 ......................................................(Unaudited)............
 ........................................(Dollars in thousands except share data)

Net interest income............................$18,092..............$.18,824
Net income...................................... 5,475.................9,122
Earnings per share
  Basic .......................................$  1.16..............$   2.21
  Diluted......................................$  1.03..............$   2.02

On April  22,  1994,  the Bank  acquired  certain  assets  and  assumed  certain
liabilities of Prospect Park Federal  Savings Bank, a failed savings bank,  from
the Resolution Trust Corporation.  The excess of cost over the fair value of the
net assets  acquired  amounted  to $12.4  million  and is being  amortized  on a
straight-line  basis over ten years. Total amortization  charged to date amounts
to $5.4  million at July 31, 1998.  The Bank also had a core deposit  premium of
$1.1 million from a prior acquisition which i being amortized on a straight line
basis over 15 years, which has total amortization of $621,000 at July 31, 1998.

24
<PAGE>

                                                                       FOCUS '99

Note 3

Investment Securities Held to Maturity:

The amortized cost and estimated market values of investment securities held to
maturity as of July 31, 1997 and 1998 are as follows (in thousands)
<TABLE>
<CAPTION>
                                                  Gross           Gross         Estimated
                                Amortized       unrealized      unrealized        market
                                   cost           gains           losses           value
----------------------------------------------------------------------------------------
<S>                              <C>            <C>      >       <C>             <C>
July 31, 1997:
FHLB structured notes............$22,574........$.......2........$..(562)........$22,014
FHLMC structured notes............14,108...............11...........(173)........ 13,946
FNMA structured notes..............6,000...............21............(46)........  5,975
----------------------------------------------------------------------------------------
                                                                                
 .................................$42,682........$......34........$..(781)........ 41,935
----------------------------------------------------------------------------------------
                                                                                
                                                                                 
July 31, 1998:
FHLB structured notes............$44,122........$.....134........$..(480)........$43,776 
FHLMC structured notes............31,830..............161...........(512)........ 31,479
FFCB structured notes..............1,000................3..............- ........  1,003
US treasury structured notes.........500................2..............- ........    502
Municipal bonds....................1,866................4..............- ........  1,870
FNMA structured notes..............4,513................-............(34)........  4,479
 ---------------------------------------------------------------------------------------
                                                                                
 .................................$83,831........$.....304........$(1,026)........$83,109
 ---------------------------------------------------------------------------------------
                                 
</TABLE>

The yield on the structured  notes increases  periodically  over the five or ten
year term of the  security.  However,  the issuer has the option to repay  these
securities as the yield adjusts.

The amortized cost and estimated market values of investment  securities held to
maturity  at July 31,  1998,  by  contractual  maturity,  are  shown  below  (in
thousands): Estimated

<TABLE>
<CAPTION>
                                                                 Estimated
                                                Amortized          market
                                                  cost             value
--------------------------------------------------------------------------
<S>                                            <C>               <C>    
Due in one year or less.........................$..4,959..........$.4,962
Due after one year through five years..............1,907............1,918
Due after five years through ten years............22,000...........22,174
Due after ten years...............................54,965...........54,055
--------------------------------------------------------------------------
 ................................................$.83,831..........$83,109
--------------------------------------------------------------------------
</TABLE>

                                                                              25
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT


Note 4 
Securities Available for Sale:

The amortized cost and estimated market values of securities  available for sale
at July 31, 1997 and 1998 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                  Gross           Gross         Estimated
                                Amortized       unrealized      unrealized        market
                                   cost           gains           losses           value
---------------------------------------------------------------------------------------
<S>                                      <C>         <C>           <C>        <C>       
July 31, 1997:
U.S. Agency Securities...................$ 48,931....$......9.......$(159).....$ 48,781 
GNMA Mortgage-backed Securities  ...........3,980.........212...........-......   4,192
FNMA/FHLMC/REMICs...........................1,440..........55..........(6)........1,489
Private Issue REMICs........................9,378...........-.........(94)........9,282
Equity Securities..........................19,406......22,700........(260).......41,846
---------------------------------------------------------------------------------------
 .........................................$.83,135......22,976.......$(519).....$105,592 
---------------------------------------------------------------------------------------

July 31, 1998:                                                                         
U.S. Agency Securities...................$..3,000.....$.....-.....  $..(5)......$ 2,995
GNMA Mortgage-backed Securities.............3,177.........175...........-.........3,352
FNMA/FHLMC/REMICs.............................980..........58...........-.........1,038
Private issue REMICs........................8,639..........11.........(30)........8,620
Equity Securities..........................13,787.......8,410........(335)...... 21,862
---------------------------------------------------------------------------------------
 .........................................$.29,583.....$.8,654.......$(370)......$37,867
---------------------------------------------------------------------------------------
</TABLE>
                                                             
The amortized cost and estimated market values of debt securities  available for
sale at July 31, 1998, by contractual maturity, are shown below (in thousands):

                                                          Estimated
                                             Amortized      market
                                                cost        value
----------------------------------------------------------------------
Due in one year or less..................    $..3,000.....$..2,995..
Due after ten years............................12,796.......13,010....

 .............................................$.15,796.....$.16,000....
----------------------------------------------------------------------

During the years ended July 31,  1996,  1997,  and 1998,  proceeds  from sale of
securities  available for sale amounted to $37.4  million,  $51.9  million,  and
$83.4  million,  respectively,  resulting in gross gains of $2.5  million,  $4.1
million, and $8.0 million, respectively.

During the years ended July 31,  1996,  1997,  and 1998,  proceeds  from sale of
trading securities amounted to $16.1 million,  $21.4 million, and $25.3 million,
respectively,  resulting  in gross gains of  $276,000,  $640,000  and  $211,000,
respectively.

26
<PAGE>
                                                                       FOCUS '99


Note 5
Mortgage-Backed Securities Held to Maturity

The amortized  cost and estimated  market values of  mortgage-backed  securities
held to maturity at July 31, 1997 and 1998 are as follows (in thousands):
     
                                        Gross          Gross    Estimated
                         Amortized   unrealized     unrealized    market
                           cost         gains         losses      value
------------------------------------------------------------------------
July 31, 1997:  
FHLMC...................$.40,306......$....424......$...(396)...$.40,334 
FNMA......................32,149...........558..........(156).....32,551 
FNMA/FHLMC/REMICs.........29,794...........285..........(619).....29,460 
------------------------------------------------------------------------
                                                         
 ........................$102,249......$..1,267......$.(1,171)...$102,345 
------------------------------------------------------------------------
                                                         
July 31, 1998:                                                           
GNMA ...................$..7,122......$....153......$......-...... 7,275 
FHLMC.....................34,001...........351..........(126).....34,226 
FNMA......................26,843...........276...........(31).....27,088 
FNMA/FHLMC/REMICs.........33,805...........246..........(842).....33,209 
------------------------------------------------------------------------
                                                         
 ........................$101,771......$..1,026......$...(999)...$101,798 
------------------------------------------------------------------------


The  amortized  cost and  market  value of  mortgage-backed  securities  held to
maturity at July 31, 1998, are shown below by contractual maturity. The expected
maturities will differ from contractual  maturities  because  borrowers may have
the  right  to  call  or  prepay  obligations  with  or  without  penalties  (in
thousands). 

                                                                  Estimated
                                                  Amortized         market
                                                     cost           value      
-----------------------------------------------------------------------------
Due in one year or less..........................$...8,887.......$.....11,914   
Due after one year through five years...............25,127.............22,145   
Due after five years through ten years..............13,934.............13,934   
Due after ten years.................................53,823.............53,805   
-----------------------------------------------------------------------------
 .................................................$.101,771.......$....101,798
-----------------------------------------------------------------------------

Note 6
Investments Held By Subsidiary

On February  6, 1995,  Branchview  sold a majority of the assets of  Residential
Money Centers ("RMC"), a residential mortgage company which originates and sells
mortgages in the  secondary  market,  to an unrelated  third party for a gain of
$3.8  million,  of which  $3.4  million  was  recorded  as a gain in 1995 and is
reflected in other  operating  income.  In July 1995,  Branchview  purchased the
remaining  partnership  interest of RMC, for $1.5  million,  and became the sole
owner  of RMC.  RMC  owned a 9.09%  limited  partnership  interest  in  Industry
Mortgage Company, L.P. ("IMC").

IMC  is  a  specialized   consumer   finance   company  engaged  in  purchasing,
originating,  servicing and selling home equity loans secured primarily by first
liens on one-to-four family residential properties.

On June 25,  1996,  IMC  completed  a  reorganization  plan  whereby the limited
partners  received  restricted  common stock in exchange  for their  partnership
interest in  connection  with a public  offering of  unrestricted  common stock.
Immediately  prior  to  the  reorganization,   Branchview  purchased  a  limited
partner's  half  share  interest  in IMC for $4.8  million.  As a result  of the
reorganization, Branchview received 830,928 shares of restricted common stock in
exchange for its limited partnership interest.  The offering price of the common
stock was $18.00 per share.  Included in other  income in 1996 is  approximately
$2.3 million representing  Lakeview's share of partnership earnings in IMC prior
to its reorganization.

                                                                              27
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT


On February 13, 1997, IMC paid a 2 for 1 stock split raising  Branchview's share
total to 1,661,856 shares at July 31, 1997, with a then current price of $18 per
share for a total market value of $29.9 million. During 1997, Lakeview purchased
an additional  40,000 shares of IMC stock for $586,000.  The underwriters of the
secondary  public  offering  requested  a lock up period  which  stated  that no
restricted Shareholders may dispose of any shares under SEC Rule 144 for 90 days
following  the  closing  date of th  offering  (July 23,  1997).  No  restricted
shareholder  was  permitted  to  dispose  of more than 8% of that  shareholder's
holdings  of  common  stock  in  any  calendar  month,  essentially  eliminating
restrictions  on the sale of stock beyond one year. As a result of the change in
the restriction,  at July 31, 1997, Lakeview transferred the IMC shares of stock
with a cost of $8.4 million  into  Securities  Available  for Sale with a market
value of $30.6 million.

At July 31, 1998, the market value of the IMC stock,  based on the quoted market
price per share, was $16.6 million, resulting in an unrealized gain, net of tax,
of $5.3 million, which is included in Stockholders' Equity.

On January 12, 1996,  Lakeview  granted a unsecured line of credit to IMC for $7
million  with an interest  rate of 10%. As of July 31,  1998,  $6.8  million was
outstanding.  For the fiscal year ended July 31, 1998,  interest  income on this
line of credit amounted to $689,000. Note 7 Loans Receivable, Net

Note 7
Loans Receivable, Net

A  comparative  summary  of loans  receivable  at July  31,  1997 and 1998 is as
follows (in thousands):

                                     1997             1998   
-----------------------------------------------------------
Loan balances by type:
Real estate.......................$216,896.........$272,203
Construction...........................377............2,097    
Consumer.............................1,914............3,508      
Commercial...........................8,982...........14,186      
-----------------------------------------------------------
 ...................................228,169..........291,994  
-----------------------------------------------------------
Less:                                                        
Allowance for loan losses............3,411............4,478  
Loans in process.........................-..............448  
Net deferred loan fees.................194..............199  
-----------------------------------------------------------
 ..................................$224,564.........$286,869  
-----------------------------------------------------------

The Bank serviced loans for others in the  approximate  amount of $13.8 million,
$14.5 million and $11.3 million at July 31, 1996, 1997 and 1998, respectively. 

A  comparative  summary  of  non-accrual  loans at July 31,  1997 and 1998 is as
follows (dollars in thousands):
<TABLE>
<CAPTION>

                                                           1997           1998
------------------------------------------------------------------------------------
                                                        No.   Amount    No.   Amount
------------------------------------------------------------------------------------
<S>                                                    <C>    <C>      <C>    <C>   
Non-accrual loans.......................................46....$3,811....39....$2,794
Percentage of non-accrual loans to total loans, net..............1.7%............1.0%
------------------------------------------------------------------------------------
</TABLE>

An  analysis  of the  allowance  for loan losses for the years ended of July 31,
1996, 1997 and 1998 is as follows (in thousands):

--------------------------------------------------------------------------------
Balance at beginning of year.......................$2,535.....$3,073....$3,411..
Provision for loan losses.............................664........961.....1,500..
Charge-offs..........................................(429)......(699).....(987).
Recoveries............................................303.........76.......126..
Acquired from Westwood..................................-..........-.......428..
--------------------------------------------------------------------------------
Balance at end of year.............................$3,073.....$3,411....$4,478..
--------------------------------------------------------------------------------


28
<PAGE>
                                                                       FOCUS '99

For the years ended July 31, 1996,  1997 and 1998,  additional  interest  income
before taxes  amounting  to  approximately  $201,000,  $256,000,  and  $242,000,
respectively,  would have been  recognized if interest on non-accrual  loans had
been  recorded  based on original  terms.  The Bank had $650,000 and $910,000 of
impaired  loans at July 31,  1997 and  1998,  respectively.  These  loans had an
allowance  for loan loss of $76,000  and  $168,000,  at July 31,  1997 and 1998,
respectively.  The average balance of the impaired loans for 1996, 1997 and 1998
was $574,000, $471,000 and $558,000, respectively. Interest income recognized on
the impaired loans for 1996, 1997 and 1998 amounted to $25,000,  $38,000 and $0,
respectively. The Bank uses the same credit policies and collateral requirements
in making  commitments  and  conditional  obligations  as it does for on-balance
sheet loans. Commitments to extend credit are agreements to lend to customers as
long as there is no  violation of any  condition  established  in the  contract.
Commitments  generally have fixed expiration dates or other termination  clauses
and may require payment of a fee. Since the commitments may expire without being
drawn upon, the total  commitment  amounts do not necessarily  represent  future
cash  requirements.  The Bank evaluates each  customer's  creditworthiness  on a
case-by-case  basis. The amount of collateral  obtained,  if deemed necessary by
the Bank upon extension of credit, is based on management's credit evaluation of
the  borrower.   Collateral  held  varies  but  primarily  includes  residential
properties.  Outstanding loan commitments, at July 31, 1997 and 1998 amounted to
$6.1 million and $5.3 million,  respectively.  At July 31, 1998, adjustable rate
loan  commitments  amounted  to $4.7  million  and fixed  rate  loan  commitment
amounted to $669,000.

Note 8
Real Estate Owned, Net

Activity in the  allowance  for losses on real estate  owned for the years ended
July 31, 1996, 1997 and 1998 is as follows (in thousands):

                                             1996         1997        1998
--------------------------------------------------------------------------------

Balance at beginning of year................$....-.......$....-......$....-.....
Provision charged to operations................654...........44..........58.....
Charge-offs, net..............................(654).........(44)........(58)....
--------------------------------------------------------------------------------
Balance at end of year......................$....-.......$....-......$....-.....
--------------------------------------------------------------------------------

Net loss on real estate owned activities for the years ended July 31, 1996, 1997
and 1998 consists of the following (in thousands):
<TABLE>
<CAPTION>

                                                            1996         1997        1998
--------------------------------------------------------------------------------------------
<S>                                                        <C>          <C>         <C>     
Provision for real estate owned losses......................$654.........$.44........$..58..
Net loss on sale of real estate owned and related expenses...267..........162..........232..
--------------------------------------------------------------------------------------------
 ............................................................$921.........$206........$ 290..
--------------------------------------------------------------------------------------------
</TABLE>

Note 9 
Accrued Interest Receivable

                                                      1997         1998
--------------------------------------------------------------------------------
Investment securities held to maturity...............$..908.......$..681........
Securities available for sale...........................630..........107........
Mortgage-backed securities held to maturity.............555..........546........
Loans receivable, net.................................1,383........1,734........
--------------------------------------------------------------------------------
 .....................................................$3,476.......$3,068........
--------------------------------------------------------------------------------

                                                                              29
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT


Note 10 
Office  Properties and Equipment,  net 

Office  properties and equipment, net, at July 31, 1997 and 1998 consists of the
following (in thousands):

                                                  1997           1998
--------------------------------------------------------------------------------
Land.............................................$..793.........$..926..........
Building and building improvements................3,636..........4,156..........
Furniture and equipment.............................986..........1,246..........
Automobiles..........................................99............101..........
--------------------------------------------------------------------------------
 ..................................................5,514..........6,429..........
--------------------------------------------------------------------------------
Less accumulated depreciation.....................1,486..........1,806..........
--------------------------------------------------------------------------------
 .................................................$4,028.........$4,623.........
--------------------------------------------------------------------------------

Office  occupancy  and  equipment  expense  includes  rentals for  premises  and
equipment of $177,000,  $187,000 and $199,000 for the years ended July 31, 1996,
1997 and 1998, respectively.

Note 11
Deposits

Deposit balances at July 31, 1997 and 1998 are summarized as follows (dollars in
thousands):

<TABLE>
<CAPTION>
                                               1997                                     1998
-------------------------------------------------------------------------------------------------------------
                             Interest  Weighted             %         Interest   Weighted                 %
                              Rate     average              of         Rate      average                  of
                             Ranges     rate     Amount    Total      Ranges      rate      Amount      Total
-------------------------------------------------------------------------------------------------------------
<S>                       <C>          <C>      <C>       <C>       <C>          <C>       <C>         <C> 
NOW accounts, DDA and                                                      
money market deposits.........0-2.35%...1.67%...$.79,150....21.35.......0-2.35%...1.38%....$101,015.....22.11 
Savings deposits..............0-2.55....2.38......75,966....20.48.......0-2.85%...2.24.......93,213.....20.40
Certificates of deposit....2.40-8.15....5.17.....215,671....58.17....2.40-8.15....5.31......262,652     57.49
-------------------------------------------------------------------------------------------------------------
 ................................................$370,787...100.00..........................$456,880....100.00
-------------------------------------------------------------------------------------------------------------
</TABLE>

Certificates of deposit greater than $100,000 total  approximately $24.0 million
and $30.6  million  at July 31,  1997 and 1998,  respectively. 

The contractual  maturities of certificates of deposit at July 31, 1997 and 1998
are as follows (in thousands):

                                             1997           1998
--------------------------------------------------------------------------------
Within one year............................$189,026.......$239,069..............
One to two years.............................18,836.........17,474..............
Two to three years............................5,208..........4,595..............
Three to four years...........................2,155............554..............
Four to five years..............................306............859..............
Thereafter......................................140............101..............
--------------------------------------------------------------------------------
 ...........................................$215,671.......$262,652..............
--------------------------------------------------------------------------------

30
<PAGE>
                                                                       FOCUS '99

Interest  expense on deposits for the years ended July 31,  1996,  1997 and 1998
consists of the following (in thousands):

                                            1996         1997        1998
--------------------------------------------------------------------------------
Certificates of deposit...................$10,881......$10,909.....$12,103......
Passbook and club accounts..................2,385........2,262.......2,322......
NOW and money market accounts.................798..........817.........910......
--------------------------------------------------------------------------------
 ..........................................$14,064......$13,988.....$15,335......
--------------------------------------------------------------------------------

Note 12 
Borrowings 

Borrowings at July 31, 1997 and 1998 consist of the following (in thousands):

                                                        Interest
                                    1997      1998        Rate        Maturity
--------------------------------------------------------------------------------
FHLB of New York Advance..........$17,000...$......-......5.85%.....Aug. 7, 1997
FHLB of New York Advance...........22,000..........-......6.00.....Sept. 2, 1997
FHLB of New York Line of Credit....20,250..........-......6.13......Aug. 1, 1997
Line of Credit......................2,000..........-......8.00......Aug. 1, 1996
FHLB of New York Advance................-.....10,000......5.96......Nov.25, 1998
FHLB of New York Advance................-.....10,000......5.43......Nov.17, 2000
FHLB of New York Advance................-.....20,000......5.40......Nov.17, 2000
FHLB of New York Advance................-......5,000......5.33..... June 1, 2005
FHLB of New York Advance................-.....10,000......5.01....March 17, 2008
Lines of Credit.........................-......9,928......8.25......Aug. 3, 1998
--------------------------------------------------------------------------------
 ..................................$61,250....$64,928............................
--------------------------------------------------------------------------------

The Bank has a blanket  pledge  with the FHLB of New York and has pledged all of
its stock in the FHLB,  federal  funds sold,  U. S. agency  securities,  certain
qualifying loans, and mortgage-backed securities.

At July  31,  1998,  Lakeview  had a line of  credit  with  one  major  national
broker/dealer  and one  commercial  bank which  totaled  $8.6  million  and $1.3
million,  respectively.  During  the years  ended  July 31,  1997 and 1998,  the
maximum  month-end  balance of the lines of credits  were $2.0 million and $10.7
million, respectively. The average amounts outstanding under the lines of credit
during July 31, 1997 and 1998 were $506,000 and $7.0  million.  Interest paid on
the  lines  of  credit  in  fiscal  1997  and 1998  was  $48,000  and  $565,000,
respectively.

Note 13 
Income Taxes

Income tax expense for the years ended July 31, 1996, 1997 and 1998 is comprised
of the following (in thousands):

                                     1996          1997          1998
--------------------------------------------------------------------------------
Current:
Federal............................$3,583.........$3,467........$5,437..........
State.................................529............369...........488.........
--------------------------------------------------------------------------------
 ...................................$4,112.........$3,836........$5,925.........
--------------------------------------------------------------------------------

Deferred:     
Federal..............................(438)..........(355).........(307).........
State.................................(38)...........(32)..........(28)........
--------------------------------------------------------------------------------
 .....................................(466)..........(387).........(335)........
--------------------------------------------------------------------------------
Total income tax expense...........$3,646.........$3,449........$5,590..........
--------------------------------------------------------------------------------
                                                                              31
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT


If certain conditions were met, under tax law that existed prior to 1996, thrift
institutions,  in determining  taxable  income,  were allowed a special bad debt
deduction  based on a  percentage  of  taxable  income  before  such  deduction.
Lakeview  prepares and files its tax return on a calendar  year basis.  Lakeview
used the  experience  method in preparing  their  Federal  Income Tax return for
calendar  year 1995 and 1994.  The tax bad debt reserve  method was repealed for
tax years beginning after 1995.  Lakeview must instead use the direct charge-off
method to compute its bad debt  deduction. 

Upon repeal, Lakeview is generally required to recapture into income the portion
of its bad debt reserve (other than supplemental reserves) that exceeds its base
year (December 31, 1987) reserves.  The recapture amount generally will be taken
into income ratably (on a straight-line bases) over a six-year period. 

Lakeview  has not  recognized a deferred tax  liability  of  approximately  $1.3
million  for bad  debt  reserves  for tax  purposes  which  arose  in tax  years
beginning  before December 31, 1987 (i.e.,  base year). A deferred tax liability
will be  recognized if Lakeview  expects that charges to the bad debt  reserves,
other than the losses on loans or recomputation of bad debt deductions resulting
from operating loss  carrybacks to prior years,  would result in taxable income.
Lakeview does not anticipate any such recognition in the foreseeable future.

A  reconciliation  of expected  income tax expense  (computed by multiplying the
U.S. Federal corporate income tax rate of 34% to income before income taxes) and
total income tax expense for the years ended July 31, 1996,  1997 and 1998 is as
follows (in thousands):


                                                    1996        1997      1998
--------------------------------------------------------------------------------
Expected income tax expense........................$3,373......$3,233....$5,112.
Dividends received deduction..........................(88)........(56)......(58
State income taxes, net of Federal tax benefit........324.........222.......304.
Amortization of the excess of cost over fair  
value of net assets acquired ..........................37..........50.......121.
Other...................................................-...........-.......111.
--------------------------------------------------------------------------------
Total income tax expense...........................$3,646......$3,449....$5,590.
--------------------------------------------------------------------------------

The tax effects of temporary  differences that give rise to significant portions
of the deferred tax asset  (liability)  at July 31, 1997 and 1998 are as follows
(in thousands):

                                                          1997            1998
--------------------------------------------------------------------------------
Deferred tax assets:
Premium on deposits.....................................$.....-.........$...419
Management stock bonus plan.................................172.............131
Allowance for loan losses.................................1,210...........1,599
Loan fees....................................................70..............72
Uncollected interest........................................111.............161
Accrued bonus................................................76..............76
Excess of cost over fair value of net assets acquired.......485.............636
Supplemental Executive Retirement Plan expense...............65.............135
Other........................................................26..............22
--------------------------------------------------------------------------------
 ....................................................... $ 2,215.........$.3,251
--------------------------------------------------------------------------------
Deferred tax liabilities:
Intangible assets............................................193............167
Depreciation expense..........................................94.............82
Unrealized gain on securities available for sale...........7,999..........2,977
Other.........................................................23.............42
--------------------------------------------------------------------------------
 ...........................................................8,309..........3,268
Net deferred liability..................................$.(6,094).......$...(17)
--------------------------------------------------------------------------------

Management  believes,  based upon current facts, that it is more likely than not
that there will be  sufficient  taxable  income in future  years to realize  the
deferred tax assets.  However,  there can be no  assurances  about the levels of
future earnings.

32
<PAGE>
                                                                       FOCUS '99


Note 14
Employee Benefit Plans

Defined Benefit Plan

Lakeview  has  in  effect  a  noncontributory   defined  benefit  plan  covering
substantially  all of its employees upon their becoming  eligible.  The benefits
are based on years of service  and  compensation.  Net  pension  benefit for the
years ended July 31, 1996, 1997 and 1998 includes the following (in thousands):

                                                      1996     1997      1998
--------------------------------------------------------------------------------
Service cost - benefits earned during the period.....$..37....$..62.....$..69
Interest cost on projected benefit obligation...........38.......46........56
Return (loss) on plan assets...........................(83)....(414)......582
Net amortization and deferral..........................(45).....296......(741)
--------------------------------------------------------------------------------
Total pension benefit................................$.(53)...$.(10)....$.(34)
--------------------------------------------------------------------------------

The  following  table sets forth the plan's  funded  status at July 31, 1997 and
1998 (in thousands):

                                                               1997       1998
--------------------------------------------------------------------------------
Actuarial present value of obligations - accumulated benefit
obligation, including vested benefits of $641 and $771
at July 31, 1997 and 1998, respectively.......................$...675....$..855
Projected benefit obligation......................................731.......935
Plan assets at fair value (primarily equities)..................1,608.......980
Plan assets in excess of projected benefit obligation.............877........45
Unrecognized net transition obligation............................(60)......(51)
Unrecognized prior service cost...................................(37)......(34)
Unrecognized deferred (gain)loss.................................(722) .....132
--------------------------------------------------------------------------------
Prepaid pension cost..........................................$....58....$...92
--------------------------------------------------------------------------------
                                                       
The weighted  average  discount rate used in determining  the actuarial  present
value of the projected benefit  obligation was 6.50% in fiscal 1997 and 6.00% in
fiscal 1998.  The assumed  long-term  rate of return on plan assets was 7.25% in
fiscal 1997 and 1998,  and the assumed  rate of increase in future  compensation
levels was 5.50% in fiscal 1997 and 5.00% in fiscal 1998.

Supplemental Executive Retirement Plan 

During  fiscal  year  1996,  Lakeview   implemented  a  Supplemental   Executive
Retirement  Plan  ("SERP"),   which  provides  a  post-employment   supplemental
retirement benefit to the participant's  Pension Plans Annual Benefit.  The SERP
is not a  tax-qualified  employee  benefit  plan.  The SERP expense was $84,000,
$97,000 and $195,000 for the years ended July 31, 1996, 1997 and 1998.

                                                                              33
<PAGE>
LAKEVIEW FINANCIAL CORP 1998 ANNUAL REPORT


Note 15
Stock Benefit Plans

Stock Option Plan:

At July  31,  1998,  Lakeview  has a  stock-based  compensation  plan,  which is
described below. Lakeview applies APB Opinion No. 25 and related interpretations
in accounting for its plan. Accordingly,  no compensation cost is recognized for
its stock option plan. Had  compensation  cost for Lakeview's stock option plans
been determined  consistent with Statement of Financial Accounting Standards No.
123 "Stock Based  Compensation," (SFAS 123) Lakeview's net income and net income
per share would have been reduced to the pro forma amounts  indicated  below (in
thousands, except per share amounts):


 ............................................1996............1997...........1998
--------------------------------------------------------------------------------
Net Income................As reported ....$6,274.........  $6,061........$9,445
 ..........................Pro forma........5,951............5,941.........9,445
Basic net income..........As reported.......1.22.............1.49..........2.51
 ..........................Pro forma.........1.16.............1.46..........2.51
Diluted net income........As reported ......1.14.............1.28..........2.28
 ..........................Pro forma.........1.08.............1.27.......   2.28

                                        
The fair  value of each  option  is  estimated  on the date of grant  using  the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions  used for grants in 1996 and 1997,  respectively;  dividend yield of
 .75% for both  years;  expected  volatility  of 20% for  both  years;  risk-free
interest  rates of 5.48% and 6.34%.  The effects of applying SFAS 123 on the pro
forma net income may not be representative of the effect on the pro forma income
for future years. 

Lakeview  adopted a stock option and incentive plan (Option  Plan).  Pursuant to
the Option Plan,  stock  options may be granted to directors and officers of the
Bank.  Options  granted under the Option Plan may be either options that qualify
as Incentive  Stock  Options as defined in Section 422 of the  Internal  Revenue
Code of 1986 (the Code), as amended, or options that do not qualify.

Exercise prices of the options range from $3.76 to $14.75 per share. All options
have been  adjusted to reflect  stock  dividends  and splits.  At July 31, 1998,
501,024 stock options were outstanding, and 458,924 stock options were exercised
during this period. 

A summary of the status of  Lakeview's  stock  option plans as of July 31, 1996,
1997, and 1998, and changes during the years then ended is presented below:



 .................................................Shares under....Weighted - avg.
 ....................................................option.......exercise price
--------------------------------------------------------------------------------
Outstanding at July 31, 1995..........................723,928........$...3.96
Grant in fiscal year ended July 31, 1996..............196,020............7.28
--------------------------------------------------------------------------------
Outstanding at July 31, 1996..........................919,948............4.67
Grant in fiscal year ended July 31, 1997...............40,000...........12.33
--------------------------------------------------------------------------------
Outstanding at July 31, 1997..........................959,948............4.99
Exercised in fiscal year ended July 31, 1998..........458,924............4.58
--------------------------------------------------------------------------------
Outstanding at July 31, 1998..........................501,024........$...5.37
--------------------------------------------------------------------------------
34
<PAGE>
                                                                       FOCUS '99

The following table summarizes  information  about stock options  outstanding at
July 31, 1998.
<TABLE>
<CAPTION>
 ..........Range of............Number..............Weighted.............Weighted...............Number...............Weighted
 ..........exercise..........of options........average remaining.........average.............of options..............average
 ...........prices...........outstanding.......contractual life......exercise price..........excercised..........exercise price
------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                   <C>                  <C>                    <C>                 <C>                    <C>   
 ......$.........3.76.........289,894..............5.4 years..............$.3.76...............354,174...............$.3.76
 ................5.64..........39,930..............6.3 years................5.64................39,930.................5.64
 ................7.28.........145,200..............7.4 years................7.28................50,820.................7.28
 .......12.06 - 14.75..........26,000..............8.5 years...............12.27................14,000................12.06
------------------------------------------------------------------------------------------------------------------------------
 .............................501,024.....................................$ 5.37...............458,924...............$.4.58
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The  purpose of the Stock  Option  Plan is to provide  additional  incentive  to
certain officers,  directors and key employees by facilitating their purchase of
a stock  interest in Lakeview.  The Stock Option Plan provides for a term of ten
years, after which no awards may be made, unless earlier terminated by the Board
of  Directors  pursuant to the Stock  Option Plan.  Options  become  immediately
vested in the event of death, disability or a "change-in-control" of Lakeview or
the Bank.

Employee Stock Ownership Plan ("ESOP"):  

Lakeview  established  an  ESOP  for the  benefit  of  employees  who  meet  the
eligibility requirements which include having completed one year of service with
the Bank and having attained age 21. The ESOP Trust purchased  110,000 shares of
common stock in  Lakeview's  initial  public  offering with proceeds from a loan
from an  unaffiliated  lender.  On July 31,  1996 the ESOP  Trust  purchased  an
additional 84,744 shares for $1.6 million. During the fiscal year ended July 31,
1997, the ESOP Trust purchased an additiona  15,000 shares for $447,000.  During
the fiscal year ended July 31,  1998,  the ESOP Trust  purchased  an  additional
349,404  shares for $9  million. 

The ESOP debt as of July 31, 1997 and 1998 was $2.4  million  and $8.8  million,
respectively,  and bears an interest  rate equal to the prime rate less .10%, as
published in the Wall Street Journal.  Lakeview makes cash  contributions to the
ESOP on an annual basis  sufficient to enable the ESOP to make the required debt
payments to the unaffiliated lender.  Dividends declared on ESOP shares are used
to purchase additional common shares of Lakeview,  for inclusion in the Plan, as
Plan assets. 

As the debt is repaid,  shares are released  from  collateral  and  allocated to
qualified  employees  based on the  proportion of debt service paid in the year.
Lakeview  accounts for its ESOP in accordance  with  Statement of Position 93-6.
Accordingly,  the shares pledged as collateral are reported as unallocated  ESOP
shares  in  the  Consolidated  Balance  Sheets.  As  shares  are  released  from
collateral,  Lakeview reports  compensation  expense equal to the current market
price of the shares,  and the shares become outstanding for net income per share
computations.

Lakeview recognized $313,000,  $901,000 and $566,000 in compensation expense for
the years ended July 31, 1996, 1997, and 1998, respectively.  Lakeview allocated
32,303,  35,649 and 16,757  shares for the years ended July 31,  1996,  1997 and
1998. The ESOP has 548,255 shares  remaining at July 31, 1998 with a fair market
value of $12.9 million.

Management  Stock Bonus Plans ("MSBP"):

Lakeview  adopted the MSBP for  directors  and  management to enable the Bank to
attract  and retain  experienced  and  capable  personnel  in key  positions  of
responsibility.  A total of 585,640 shares of restricted stock were purchased on
December 22, 1993,  Lakeview's  initial public  offering,  as adjusted for stock
dividends  and splits.  Allocated  restricted  stock is payable over a five-year
vesting period,  at 20% per year,  beginning in the year of the award.  The MSBP
shares are  recorded  as a contra  equity  accoun  excluded  from  stockholders'
equity.  Lakeview recognizes  compensation  expense in the amount of the cost of
the common stock at the  acquisition  date, pro rata over the years during which
the shares are payable and recorded as an addition to stockholders' equity.

Compensation  expense  attributable to the MSBPs amounted to $320,000,  $290,000
and $379,000 in 1996,  1997 and 1998,  respectively.  The shares are entitled to
all  voting  and  other  stockholder  rights,  except  that  the  shares,  while
restricted,  cannot be sold,  pledged or otherwise disposed of, and are required
to be held in escrow.  Lakeview has 199,807  shares  remaining at July 31, 1998,
190,147 of which are unallocated. 

If a holder of restricted stock under the MSBP terminates employment for reasons
other than death,  disability,  or retirement following five years of service or
change of control in Lakeview or the Bank, such employee  forfeits all rights to
any allocated  shares which are still  restricted.  If  termination is caused by
death, disability,  retirement or change in control of Lakeview or the Bank, all
allocated shares become unrestricted.

                                                                              35
<PAGE>
LAKEVIEW FINANCIAL CORP. 1998 ANNUAL REPORT

Note 16
Commitments and Contingencies

At July 31, 1998, the Bank was obligated under  non-cancelable  operating leases
for premises and equipment as follows (in thousands):

------------------------------------------------------------
1999....................................................$252
2000.................................................... 229
2001.................................................... 217
2002.................................................... 882
2003....................................................  41 
------------------------------------------------------------

In  the  normal  course  of  business,   there  are  various  outstanding  legal
proceedings and claims.  In the opinion of management,  after  consultation with
legal counsel,  the  disposition of such legal  proceedings  and claims will not
materially affect Lakeview's consolidated financial position.

Note 17
Regulatory Matters 

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

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require  the Bank to  maintain  minimum  amounts  and  ratios.  Total and Tier I
capital (as defined in the  regulations) to  risk-weighted  assets (as defined),
and of Tier I capital (as defined) to average  assets (as  defined).  Management
believes,  as of July 31,  1998,  that  the  Bank  meets  all  capital  adequacy
requirements  to  which it is  subject. 

As of July 31,  1998,  the most recent  notification  from the  Federal  Deposit
Insurance  Corporation  categorized  the  Bank as  well  capitalized  under  the
regulatory  framework for prompt  corrective  action.  To be categorized as well
capitalized the Bank must maintain minimum total risk-based,  Tier I risk-based,
Tier I leverage ratios as set forth in the table below.  There are no conditions
or events since that  notification  that  management  believes  have changed the
institution's  category.  

The Bank's actual capital amounts and ratios are also presented in the following
table (dollars in thousands).
<TABLE>
<CAPTION>

                                                                 Required        To be well capitalized  
                                                                for capital      under prompt corrective
                                                Actual        adequacy purposes    action provision
--------------------------------------------------------------------------------------------------------
                                           Amount    Ratio     Amount    Ratio     Amount     Ratio
--------------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>       <C>       <C>       <C>       <C> 
As of July 31, 1997:
Total capital (to risk-weighted assets)....$45,129....17.0%....$21,246....8.0%.....$26,557....10.0%                               
Tier 1 capital (to risk-weighted assets)....36,121....13.6......10,623....4.0.......15,934.....6.0                                
Tier 1 capital (to average assets)..........36,121.....7.6......19,108....4.0.......23,885.....5.0                                
----------------------------------------------------------------------------------------------------
As of July 31, 1998:                                                                                                              
Total capital (to risk-weighted assets)....$51,418....15.0%....$27,416....8.0%.....$34,270....10.0%                              
Tier 1 capital (to risk-weighted assets)....31,651.....9.2......13,708....4.0.......20,562.....6.0                                
Tier 1 capital (to average assets)..........31,651.....5.8......21,888....4.0.......27,360.....5.0                                
----------------------------------------------------------------------------------------------------
</TABLE>

36
<PAGE>
                                                                       FOCUS '99

Note 18 
Stock Repurchase Program

Lakeview has repurchased  shares  beginning on October 28, 1994, under its stock
repurchase programs. The repurchased shares have been held as treasury stock and
are  available  for general  corporate  purposes.  Lakeview  has  completed  the
repurchase of 489,053 shares  totaling $11.4 million for the year ended July 31,
1998.

Note 19
Fair Value of Financial Instruments

Statement  of  Accounting  Standards  No. 107,  "Disclosure  about Fair Value of
Financial Instruments" (SFAS 107), requires disclosures of information about the
fair  value  of  all  financial  instruments.  The  fair  value  of a  financial
instrument is the amount at which the asset or obligation  could be exchanged in
a  current  transaction  between  willing  parties,  other  than in a forced  or
liquidation  sale.  Fair value  estimates  are made at a specific  point in time
based on  relevant  market  information  and  information  about  the  financial
instruments.  Such  estimates do not include any premium or discount  that could
result  from  offering  for sale at one time  Lakeview's  entire  holdings  of a
particular  financial   instrument.   Because  no  market  value  exists  for  a
significant portion of the financial instruments, fair value estimates are based
on  judgments  regarding  future  expected  loss  experience,  current  economic
conditions,  risk  characteristics of various financial  instruments,  and other
assumptions,  many  of  which  involve  circumstances  outside  the  control  of
management.   Because  of  the  uncertainties   surrounding  these  factors  and
assumptions,  the reported fair values represent  estimates only and, therefore,
cannot be compared to the historical accounting model. Changes in assumptions or
methodologies could significantly affect the estimates of fair value. 

Fair value estimates  presented are based on financial  instruments both on- and
off-balance  sheet,  and no  attempt  has been  made to  estimate  the  value of
anticipated  future  business,  and the value of assets and liabilities that are
not considered financial instruments.  In addition, the tax consequences related
to the  realization  of the  unrealized  gains and losses  can have a  potential
effect  on fair  value  estimates  and have not  been  considered  in any of the
estimates. The fair value information supplements the basic financial statements
and  other  traditional   financial  data  presented  throughout  the  financial
statements, and the aggregate fair value of financial instruments presented does
not represent the  underlying  value of Lakeview taken as a whole and should not
be  compared  with the fair  value of other  financial  institutions,  which may
differ depending on the assumptions used and the valuation  techniques employed.
The following  methods and  assumptions  were used to estimate the fair value of
significant  financial  instruments at July 31, 1997 and 1998:

Financial Assets:

The carrying  amount of cash and cash  equivalents  is considered to approximate
fair value.  The fair values of securities  available for sale,  mortgage-backed
securities held to maturity and investment securities held to maturity are based
on quoted market prices. The fair value of loans represents the present value of
the estimated future cash flows discounted at estimates of market interest rates
adjusted for criteria  discussed above. Fair value of significant  nonperforming
loans is  generally  based on the  estimated  cash  flows  which are  discounted
employing a rate that incorporates the risk associated with such cash flows. The
fair  value of the  FHLB  stock is the  same as its  carrying  value.

Financial Liabilities:  

The carrying amounts of deposit  liabilities payable on demand are considered to
approximate fair value. The fair value of fixed maturity  deposits was estimated
by discounting  estimated  future cash flows using rates  currently  offered for
deposit  products  with  similar  maturities.  For  short-term  borrowings,  the
carrying amounts are considered to approximate fair value.  Long-term borrowings
fair values are  discounted  using rates  available on  borrowings  with similar
terms and maturities.

                                                                              37
<PAGE>
LAKEVIEW FINANCIAL CORP. 1998 ANNUAL REPORT


Off-balance-sheet Financial Instruments: 

The fair  value of  commitments  to extend  credit is  estimated  using the fees
currently charged to enter into similar arrangements.

The  carrying  amounts and related  fair values at July 31, 1997 and 1998 are as
follows (in thousands):

                                                  Carrying amount    Fair value
--------------------------------------------------------------------------------
1997: 
Financial assets:
Cash and cash equivalents............................$...5,399.........$..5,399.
Investment securities held to maturity..................42,682...........41,935
Securities available for sale..........................105,592..........105,592
Mortgage-backed securities held to maturity............102,249..........102,345
Loans receivable, net..................................224,564..........229,260
Federal Home Loan Bank of New York stock.................3,550............3,550
Financial liabilities:  
Deposits...............................................370,787..........374,661
Borrowings..............................................63,604...........63,60

1998:
Financial assets:
Cash and cash equivalents............................$..48,673.........$.48,673
Investment securities held to maturity..................83,831...........83,109
Securities available for sale...........................37,867...........37,867
Mortgage-backed securities held to maturity............101,771..........101,798
Loans receivable, net..................................286,869..........293,526
Federal Home Loan Bank of New York stock.................4,626............4,626
Financial liabilities:
Deposits...............................................456,880..........460,443
Borrowings..............................................73,711...........81,796



Note 20
Recent Accounting Pronouncements

Statement of Financial  Accounting  Standards No. 130, "Reporting  Comprehensive
Income"  (SFAS 130)  establishes  standards  for  reporting  and  displaying  of
comprehensive  income  and  its  components  in a full  set of  general  purpose
financial statements.  Under SFAS 130,  comprehensive income is divided into net
income and other comprehensive income. Other comprehensive income includes items
previously  recorded  directly in equity,  such as unrealized gains or losses on
securities  available for sale.  Prior period  financial  statements  need to be
reclassified to reflect the applications of the provisions of SFAS 130. SFAS 130
is effective for fiscal years beginning after December 15, 1997. The adoption of
SFAS 130 is not  expected  to have a  material  impact on  Lakeview's  financial
statement  presentation. 

Statement of Financial  Accounting  Standards  No. 132,  "Employers  Disclosures
about  Pensions  and  Other   Post-retirement   Benefits"  (SFAS  132),  revises
employers' disclosures about pension and other post-retirement benefit plans. It
does not change the  measurement or recognition of those plans.  It standardizes
the disclosure  requirements for pensions and other post-retirement  benefits to
the  extent  practicable,  requires  additional  information  in  changes in the
benefit obligations and fair value of plan asset that will facilitate  financial
analysis and eliminates  certain  required  disclosures  of previous  accounting
pronouncements.  SFAS 132 is effective for fiscal years beginning after December
15, 1997.  Restatement of disclosures for earlier periods is required unless the
information is not readily  available.  The adoption of SFAS 132 is not expected
to have a significant impact on Lakeview's  financial statement  presentation or
footnote disclosure.

38
<PAGE>
                                                                       FOCUS '99


Statement of Financial  Accounting  Standards No. 133 "Accounting for Derivative
Instruments  and  Hedging  Activities"  (SFAS 133)  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other  contracts,   (collectively   referred  to  as
derivatives)  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. SFAS 133 is effective for
all fiscal  quarters of fiscal  years  beginning  after June 15,  1999.  Initial
application  of SFAS 133 should be as of the  beginning  of an  entity's  fiscal
quarter;  on that  date,  hedging  relationships  must be  designated  anew  and
documented pursuant to the provisions of this statement.  Earlier application of
all of the provisions of SFAS 133 is encouraged,  but it is permitted only as of
the beginning of any fiscal quarter that begins after issuance of the statement.
This statement should not be applied  retroactively  to financial  statements of
prior periods.  Lakeview has not  determined  the impact,  if any, SFAS 133 will
have on Lakeview's consolidated financial statements.

Note 21
Savings Association Insurance Fund ("SAIF") 
Recapitalization Assessment

On September 30, 1996, the President signed into law the Deposit Insurance Funds
Act of 1996 (the  "Funds  Act")  which,  among other  things,  imposes a special
one-time  assessment  on  SAIF  member  institutions,  including  the  Bank,  to
recapitalize  the SAIF. As required by the Funds Act, the FDIC imposed a special
assessment of 65.7 basis points on SAIF assessable deposits held as of March 31,
1995,  payable  November 27, 1996.  The special  assessment was recognized as an
expense on September 30, 1996 and is tax deductible. The Bank incurred a pre tax
charge of $2.2 million in 1997 as a result of the FDIC special  assessment.  The
Bank paid $794,000,  $582,000 and $255,000 in Federal deposit insurance premiums
for the fiscal years ended July 31, 1996, 1997 and 1998, respectively.

Note 22
Subsequent Event

Lakeview,  including its subsidiary  Branchview,  Inc., has an equity investment
with a cost basis of $8.4  million  in IMC  Mortgage  Company,  L.P.  (IMC).  In
addition,  Lakeview has an unsecured  line of credit to IMC for $7 million as of
July 31, 1998 (see Note 6).

IMC reached an agreement on October 15, 1998 for a $33 million standby revolving
credit facility with a lender and certain affiliates of the lender. The facility
is available to provide  working  capital for a period of up to 90 days,  during
which time IMC intends to explore financial and strategic alternatives including
the possible sale of IMC. The terms of the new facility  result in a substantial
dilution of existing common  stockholders'  equity equating to a minimum of 40%,
up to a maximum of 90%, on a fully diluted basis, depending on when, or whether,
a change of control  transaction  occurs, as described below.  Lakeview's equity
investment in IMC  represents  approximately  5.5% of IMC's  outstanding  common
shares.  IMC has also entered  into  intercreditor  arrangements  with its three
largest  warehouse  and  residual  certificate  lenders  which have  agreed to a
"standstill"  keeping  their  facilities in place for up to 90 days in order for
IMC to explore its financial  alternatives.  In addition, IMC has entered into a
forbearance  and  intercreditor  agreement  with  respect  to  its  $95  million
revolving bank credit facility,  which has matured by its terms.  That agreement
provides  that the lender will take no collection  action fo 45 days,  extending
for an  additional  45 days (to a total of 90 days)  if a letter  of  intent  to
effectuate  a change of control has been  entered into by IMC during the initial
45-day period.

In view of,  among  other  things,  reductions  in  available  cash  and  credit
resources,  IMC has retained an  investment  banker to advise it as to financial
and strategic  alternatives.  IMC is actively working with the investment banker
to seek a long-term investor in IMC or a sale or similar  transaction  resulting
in a change of control of IMC. 

In light of, among other things, the factors noted above, IMC does not expect to
meet  earnings  expectations  for the quarter  ended  September  30,  1998,  and
presently anticipates the possibility of a third quarter loss. 

As of October  16,  1998,  the market  value of the IMC stock held by  Lakeview,
based on the quoted market price per share,  was $1.8  million,  resulting in an
unrealized loss, net of tax, of $4.0 million.

Management of Lakeview cannot presently  predict what effect the actions of IMC,
as described above,  will have on the  collectibility of the outstanding line of
credit and recoverability of their equity investment.

Note 23
Parent Company Only

At fiscal year end 1998,  Lakeview  Financial  Corp.  (Parent)  had three active
subsidiaries:  Lakeview Savings Bank,  Branchview,  Inc., and Lakeview  Mortgage
Depot,  Inc. The earnings of the subsidiaries are recognized by the Parent using
the equity method of accounting.  Accordingly,  earnings of the subsidiaries are
recorded  as  increases  in the  Parent's  investment  in the  subsidiaries  and
dividends paid reduce the Parent's investment in the subsidiaries. The following
information  should be read in conjunctio  with other Notes to the  Consolidated
Financial Statements.

                                                                              39
<PAGE>
LAKEVIEW FINANCIAL CORP. 1998 ANNUAL REPORT
<TABLE>
<CAPTION>
                                                                                  1997           1998
                                                           ------------------------------------------------
                                                                                  (Dollars in thousands)
<S>                                                             <C>            <C>           <C>         
Condensed Financial Statements (Parent Only)...............................................................
Condensed Balance Sheets...................................................................................
Assets.....................................................................................................
Cash on hand and in banks.......................................................$.....168.....$........107
Investments in subsidiaries........................................................63,456...........60,227
Securities available for sale.........................................................720............1,390
Excess of cost over fair value of assets acquired, net..................................-.............(990)   
Other assets..........................................................................297..............357
------------------------------------------------------------------------------------------------------------
Total assets....................................................................$..64,641.....$.....61,091
------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Borrowings..........................................................................2,000........... 4,307
Other liabilities.....................................................................832........ .....177
Stockholders' equity...............................................................61,809....... ...56,607
------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity......................................$..64,641.... $ ....61,091
------------------------------------------------------------------------------------------------------------

Condensed Statements of Income.....................................1996..............1997............1998..
Dividends from subsidiaries......................................$..7,651.......$....5,551....$......8,700
Other income............................................................-...............13...............6
------------------------------------------------------------------------------------------------------------
Total income........................................................7,651............5,564...........8,706
Interest expense........................................................-...............47.............459
Amortization of excess cost over fair value of net
assets acquired, net....................................................-................-.............(28)    
Other expense..........................................................35...............61..............86
------------------------------------------------------------------------------------------------------------
Total expense..........................................................35..............108.............517
Income before income taxes and equity of undistributed
income of subsidiaries..............................................7,616............5,456.......... 8,189
Income tax expense (benefit)............................................2..............(12)............. -
Equity in undistributed income (loss) of subsidiaries..............(1,340).............593...........1,256
------------------------------------------------------------------------------------------------------------
Net income.......................................................$..6,274.......$....6,061....$......9,445
------------------------------------------------------------------------------------------------------------

Condensed Statement of Cash Flows....................................1996.............1997............1998
Cash flows from operating activities:
   Net income....................................................$..6,274.......$....6,061....$......9,445
   Adjustments to reconcile net income to net cash
   provided by operating activities:
   Equity in undistributed (income) loss from subsidiary............1,340.............(593).........(1,256) 
   (Decrease) increase in investment in subsidiaries.................(250)............(150)............150
   Amortization of excess of cost over fair value of.
   assets acquired, net.................................................-................-.............(28)    
   Increase in other assets.............................................-.............(351)............(60)    
   (Increase) decrease in other liabilities............................(5).............832............(655)   
------------------------------------------------------------------------------------------------------------
   Net cash provided by operating activity..........................7,359............5,799.........  7,596 
------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
   Payment for purchase of Westwood Financial
   Corporation, net of cash acquired....................................- ...............-...........1,148
   Purchase of securities available for sale............................-.............(585).........(1,000) 
------------------------------------------------------------------------------------------------------------
   Net cash used in investing activities................................-.............(585)............148
------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
   Cash dividends paid...............................................(582)............(587)...........(845)   
   Purchase of treasury stock......................................(6,685)..........(6,703).........(11,389)
   Exercise of stock options............................................-................-............2,122
   Increase in borrowings...............................................-............2,000............2,307
------------------------------------------------------------------------------------------------------------
Net cash used in financing activities..............................(7,267)..........(5,290)..........(7,805) 
------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents................................92..............(76).............(61)    
Cash and cash equivalents at beginning of period......................152..............244..............168
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period......................$.....244.......$......168.....$........107
------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
                                                                       FOCUS '99

Note 24
Quarterly Financial Data (Unaudited)

The following table contains  quarterly  financial data for the years ended July
31, 1997 and 1998 (dollars in thousands):
<TABLE>
<CAPTION>

 .........................................................First.........Second.........Third ........Fourth
Year Ended July 31, 1997............................... Quarter........Quarter........Quarter.......Quarter......Total..
-----------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>            <C>           <C>          <C>    
Interest Income........................................$.8,058........$.7,983........$..8,372......$..8,429.....$32,842
Interest Expense.........................................4,209..........4,357...........4,312.........4,440..... 17,318
-----------------------------------------------------------------------------------------------------------------------
Net Interest Income......................................3,849..........3,626...........4,060.........3,989..... 15,524
Provision for Loan Losses..................................105............256.............300...........300........ 961
-----------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision
for Loan Losses..........................................3,744..........3,370...........3,760.........3,689..... 14,563
Other Income.............................................1,614..........3,166.............972.........2,350...... 8,102
Other Expense............................................4,801..........2,649...........2,847.........2,858..... 13,155
Income Before Income Taxes.................................557..........3,887...........1,885.........3,181...... 9,510
Income Taxes...............................................211..........1,417.............546.........1,275...... 3,449
-----------------------------------------------------------------------------------------------------------------------
Net Income.............................................$...346........$.2,470........$..1,339.......$.1,906.....$ 6,061
Net Income Per Share:
   Basic...............................................$..0.08........$..0.60........$...0.33.......$..0.48.....$  1.49
   Diluted.............................................$..0.05........$..0.52........$...0.29.......$..0.42.....$  1.28
</TABLE>

<TABLE>
<CAPTION>


 ........................................................First.........Second...........Third.............Fourth
Year Ended July 31, 1998.............................. Quarter........Quarter..........Quarter..........Quarter.......Total
----------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>            <C>                <C>        <C>      
Interest Income........................................$.8,971........$8,683`........$...9,645..........$.10,078...$..37,377
Interest Expense.........................................4,636..........4,664............5,084.............5,418......19,802
----------------------------------------------------------------------------------------------------------------------------
Net Interest Income......................................4,335..........4,019............4,561.............4,661......17,575
Provision for Loan Losses..................................301............300..............449...............450.......1,500
----------------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision
for Loan Losses..........................................4,034..........3,719............4,112.............4,211......16,075
Other Income...............................................745..........3,371............3,587.............4,109......11,812
Other Expense............................................2,823..........3,027............3,133.............3,869......12,852
Income Before Income Taxes...............................1,956..........4,063............4,566.............4,450......15,035
Income Taxes...............................................690..........1,515............1,524.............1,861.......5,590
----------------------------------------------------------------------------------------------------------------------------
Net Income.............................................$.1,266.......$..2,548........$...3,042...........$.2,589...$...9,445
----------------------------------------------------------------------------------------------------------------------------
Net Income Per Share:
   Basic...............................................$..0.28.......$...0.75........$....0.83...........$..0.65...$....2.51
   Diluted.............................................$..0.29.......$...0.63........$....0.75...........$..0.61...$....2.28

</TABLE>


                                                                              41