EXHIBIT 13
<PAGE>


                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------
    Selected Financial Data

    The  following   table  sets  forth  certain   information   concerning  the
    consolidated  financial  position and operating  data of the Savings Bank at
    the dates indicated:

<TABLE>
<CAPTION>
                                                                                               July 31
                                                                                        (Dollars in Thousands)
                                                                             1993      1994      1995      1996      1997
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>       <C>       <C>       <C>       <C>     
    Selected Financial Condition Data:
    Assets............................................................     $207,462  $413,725  $419,212  $457,860  $505,882
    Loans Receivable, Net.............................................      137,301   136,143   142,123   163,457   224,564
    Mortgage-Backed Securities Held to Maturity.......................       43,579   173,067   175,375   121,462   102,249
    Investment Securities Held to Maturity............................           16    62,637    55,738    40,821    42,682
    Investment Securities Available For Sale................. ........       12,898    11,269     8,567    89,967   105,592
    Excess of Cost Over Fair-Value of Net Assets Acquired, Net........          825    12,817    11,497    10,176     8,856
    Deposits..........................................................      164,130   344,915   343,489   354,247   370,787
    Borrowings........................................................       18,500    19,021    19,859    54,721    63,604
    Stockholders' Equity .............................................       22,211    46,982    49,440    45,760    61,809
    Stated Book Value Per Share ......................................          N/A      7.30      8.51      9.18     13.71
    Tangible Book Value Per Share ....................................          N/A      5.30      6.53      7.14     11.75

    Selected Operating Data:
    Gross Interest Income.............................................       15,179    18,947    28,430    30,972    32,842
    Net Interest Income...............................................        8,025    11,212    14,892    14,423    15,524
    Other Income......................................................        2,010     2,608     7,206     7,030     8,102
    Net Income........................................................        2,339     4,571     6,295     6,274     6,061
    Net Income Per Share..............................................          N/A       N/A      1.01      1.13      1.20
    Return on Average Assets..........................................         1.13%     1.16%     1.50%     1.42%     1.28%
    Cash Dividend Per Common Share....................................          N/A      .031      .125      .125      .125

    Asset Quality Data:
    Non-Performing Loans..............................................       13,540     8,928     3,372     2,417     3,811
    Other Non-Performing..............................................            -         -       850       494         -
    Real Estate Owned (REO)...........................................        6,575     3,762     3,608     1,667     1,929
----------------------------------------------------------------------------------------------------------------------------
    Total Non-Performing Assets ......................................       20,115    12,690     7,830     4,578     5,740
----------------------------------------------------------------------------------------------------------------------------
    Non-Performing Assets to Assets Ratio.............................         9.70%     3.70%     1.87%     1.00%     1.13%
    Loan Allowance....................................................        2,638     1,714     2,535     3,073     3,411
    REO Allowance.....................................................          823       188         -         -         -
----------------------------------------------------------------------------------------------------------------------------
     Total Allowances.................................................      $ 3,461   $ 1,902   $ 2,535   $ 3,073   $ 3,411
----------------------------------------------------------------------------------------------------------------------------
     Total Allowances to Non-Performing Assets (Coverage Ratio).......        17.21%    14.99%     32.4      67.1%     59.4%
</TABLE>


                                                                               1

<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
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    Management Discussion and Analysis of Financial Condition and Results of
    Operation

    FINANCIAL CONDITION

    Total assets increased $48.0 million or 10.5%, to $505.9 million at July 31,
    1997 from $457.9 million at July 31, 1996. The increase in assets  primarily
    reflects the Company's deployment of proceeds into the loan portfolio,  from
    principal  repayments  of  mortgage-backed   securities  held  to  maturity,
    increased  deposits  levels and increased  borrowings.  Before the effect of
    unrealized  gains or losses on securities  available for sale,  shareholders
    equity  decreased  $200,000  or .4% to $47.4  million at July 31, 1997  from
    $47.6 million at July 31, 1996.

    Loans receivable,  net increased $61.1 million,  or 37.4%, to $224.6 million
    at July 31, 1997, from $163.5 million at July 31, 1996.  Approximately $35.5
    million of this increase was in  multi-family  loans,  $19.4 million in home
    equity,  second  mortgage  and  home  improvement  loans,  $8.4  million  in
    commercial   business  loans  offset  by  a  decrease  of  $1.4  million  in
    residential loans, as a result of scheduled repayments. The increase was the
    result of the concerted efforts of a seasoned branch staff, a recently hired
    business  development  officer in July 1996 and specialized lending officers
    and senior management.  It is Management's intention to continue to increase
    the loan  portfolio by changing the mix of the Savings Bank's loan portfolio
    - from lower  yielding  loans  (i.e.,  one- to four family  loans) to higher
    yielding loans (i.e.,  equity loans,  multi-family  (five (5) or more units)
    buildings, and commercial (non-residential) mortgages.

    Loans  delinquent  90 days or  more  increased  $900,000  or  31.0%  to $3.8
    million,  or at July 31,  1997  from  $2.9  million  at July 31,  1996.  The
    increase  is  primarily  due to loan growth and the change in the mix of the
    loan portfolio.

    REO, net, increased  $263,000,  or 15.8%, to $1.9 million at July 31, 1997,
    from $1.7 million at July 31, 1996.  The increase was mainly  attributed  to
    $732,000 of loans receivable  being  transferred into REO offset by $545,000
    of sales and $44,000 of charge-offs.

    Investment  securities available for sale portfolio increased $15.6 million,
    or 17.4%,  to $105.6 million at July 31, 1997 from $90.0 million at July 31,
    1996. The increase was mainly attributable to purchases of $34.9 million and
    an increase in market value  (before  tax) of $25.5  million (of which $22.1
    million reflects the  reclassification  of the equity securities  portfolio,
    originally carried at cost) offset by sales of $47.7 million,  maturities of
    $3.0 million,  and principal  repayments of $1.8 million. In addition,  $7.8
    million of equity  securities  restricted  for sale were  carried at cost in
    1996 due to certain  restrictions on the sale of these securities.  However,
    during the fourth quarter of 1997, the equity  securities were  reclassified
    as available for sale since these restrictions will expire within  the  next
    twelve months. See footnote 7 to the consolidated financial statements.

    Investment  securities  held to maturity  increased $1.9 million or 4.6%, to
    $42.7  million at July 31,  1997 from $40.8  million at July 31,  1996.  The
    increase was due to net purchases of $8.8 million  offset by $7.0 million of
    maturities.

    Mortgage-backed  securities  held to maturity  decreased  $19.3 million,  or
    15.8%,  to $102.2 million at July 31, 1997,  from $121.5 million at July 31,
    1996.  The decrease in  mortgage-backed  securities resulted from  principal
    repayments of $19.4 million.

    Deposits,  after  interest  credited,  increased  $16.6  million or 4.7%, to
    $370.8  million at July 31, 1997 from $354.2  million at July 31, 1996.  Now
    accounts and money market  deposits  increased  $9.6 million or 13.7% during
    the fiscal year ended July 31, 1997.  Of theses  accounts,  growth  occurred
    primarily  in demand  deposits and  business  accounts  due to  Management's
    concerted efforts in 1997 to increase these accounts. However, there were no
    promotional rates offered on these accounts. Savings deposits increased $1.4
    million or 1.8% during the fiscal year ended July 31, 1997. The average cost
    of these  deposits  remained  unchanged at 2.38% for July 31, 1997 and 1996.
    Certificates of deposit  increased $5.7 million or 2.7% to $215.7 million at
    July 31,  1997,  compared to $210.0  million at July 31,  1996.  The cost of
    certificates of deposits increased six (6) basis points to 5.17% at July 31,
    1997 from 5.11% at July 31, 1996.
<PAGE>

    Borrowings  increased $8.9 million,  or 16.9%,  to $61.3 million at July 31,
    1997,  from $52.4  million at July 31, 1996.  The increase  included a $19.0
    million  increase  in advances  from the Federal  Home Loan Bank of New York
    ("FHLB"),  $8.3  million  increase  in a FHLB  line of  credit  offset  by a
    decrease of $18.4 million in reverse repurchase agreement borrowings.

    Net deferred tax liability  increased $6.1 million or 100% at July 31, 1997.
    The increase was  primarily  attributable  to the $7.4 million  deferred tax
    liability  related  to  the  unrealized  gain  on  the  available  for  sale
    portfolio.

    On  September  10,  1997,  the Company and  Westwood  Financial  Corporation
    ("Westwood"),  the  holding  company of  Westwood  Savings  Bank  ("Westwood
    Bank"),  Westwood,  New Jersey,  signed a definitive agreement providing for
    the merger of Westwood  into the Holding  Company and the merger of Westwood
    Bank into the Savings  Bank. It is  anticipated  that the  transaction  will
    close by  approximately  March  1998 and will be  accounted  for  under  the
    purchase method of accounting.


                                                                               9
<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    MARKET FOR COMMON STOCK

    The  common  stock of  Lakeview  Financial  Corp.  is traded  on the  Nasdaq
    National Market under the symbol of "LVSB". On October 15, 1997, the Company
    paid to all  shareholders  of record on October 1, 1997 a two for one common
    stock split. The information below reflects the two for one stock split.

    As a result  of  continued  earnings,  there  has been a  $.0625  per  share
    dividend  since the 3rd fiscal  quarter in 1994.  On November 13, 1996,  the
    Company paid a 10% common stock  dividend to all  shareholders  of record on
    October 30, 1996.  This  resulted in the issuance of an  additional  497,586
    shares of common stock.

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

    For the quarters ended:

                         1995               1996                    1997
--------------------------------------------------------------------------------
    Prices ...........   Oct.      Jan.  Apr.  Jul.  Oct.    Jan.   Apr.   Jul.

    High .............   7.91      8.13  9.04  9.55  12.44   15.69  17.13  17.32
     
    Low ..............   7.18      7.28  7.84  8.07   9.21   11.25  13.75  13.63

    Closing ..........   7.39      7.84  8.92  9.32  11.69   15.38  13.82  16.50

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

    RESULTS OF OPERATIONS

    Net income decreased $234,000 or 3.7%, to $6.1 million at July 31, 1997 from
    $6.3  million at July 31,  1996.  The  decrease in net income was  primarily
    attributable  to the SAIF  special  assessment  before taxes of $2.2 million
    offset by increases of $1.1 million in net interest  income and $1.1 million
    in other income.

    Net income  remained  unchanged at $6.3 million for the years ended July 31,
    1996 and 1995.

    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 interest rate paid on interest liabilities.

    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 reflects an
    increase  in average  loans of $37.3  million and  average  investments  and
    mortgage-backed  securities  available for sale of $34.6 million offset by a
    decrease in average mortgage- backed  securities  and investment  securities
    held  to  maturity  of  $40.4  million.  The  increase  in average interest-
    earnings  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.

10
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
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    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. As general market rates were  relatively  stable in
    1997 and 1996,  the  decline  in the yield of loans  reflects  the impact of
    increased  competition  for new loan  originations.  The decline in yield of
    investment and mortgage-backed  securities available for sale was the result
    of lower rates of interest and dividends.

    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 money
    market and checking accounts.

    Net interest income decreased $469,000 or 3.1% to $14.4 million in 1996 from
    $14.9  million in 1995.  The decrease was  primarily  due to the increase in
    interest-bearing  liabilities  to $382.9 million in 1996 from $357.4 million
    in 1995 coupled with a decrease in the interest rate spread to 3.21% in 1996
    from  3.58%  in  1995.  The  decline  in  the  interest  rate  spread  had a
    corresponding  impact on the net  interest  margin  which  declined 35 basis
    points to 3.51% in 1996.

    The increase in average  interest-bearing  liabilities  of $25.5  million in
    1996 reflects an increase in average  savings  accounts of $10.2 million and
    average   borrowings   of   $15.3   million.   The   increase   in   average
    interest-earnings  assets of $25.7  million  was funded by the  increase  in
    average   interest-bearing    liabilities.    This   increase   in   average
    interest-earning assets reflects the increase in average loan receivables of
    $16.1 million,  average investment and mortgage-backed  securities available
    for sale of $50.7  million  offset by a decrease of average  mortgage-backed
    and investment securities of $41.0 million.

    The  interest  rate  spread  declined  in 1996  compared  to 1995  due to an
    increase  in the cost of average  interest  bearing-liabilities  to 4.32% in
    1996 from  3.79% in 1995,  offset  by an  increase  in the yield on  average
    interest-earning  assets  to 7.53% in 1996 from  7.37% in 1995.  The cost of
    average interest-bearing  liabilities increased in 1996 primarily due to the
    higher volume and higher rates paid on savings accounts, offset by the lower
    cost of funds on borrowings.

    The yield on average  interest-earning  assets increased in 1996 by 16 basis
    points primarily due to the higher rates on new loan  originations  compared
    to the rates on loans repaid and the higher  volume  coupled with the higher
    rates paid on investment and mortgage-backed securities available for sale.

    Provision  for Losses on Loans:  The Company  recorded a provision  for loan
    losses of $961,000 in 1997  compared  with $664,000 in 1996 and $1.4 million
    in 1995. The increase in 1997 was attributable to loan growth and the change
    in the mix of the loan portfolio. The decrease in 1996 was attributable to a
    $955,000 decrease in the  nonperforming loans  portfolio and improved market
    conditions.

    Management  regularly performs an analysis to identify the inherent risks of
    loss  in  its  loan  portfolio.  This  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. Additionally, in July 1997, the Savings
    Bank hired a loan workout officer to focus on Management's continued efforts
    to reduce the risk of the loan portfolio.

    The Savings Bank 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.  As  discussed  previously,  it is
    Management's  intention  to  continue  to  increase  the loan  portfolio  by
    changing the mix of the Savings  Bank's loan portfolio - from lower yielding
    loans  (i.e.,  one- to four family  loans) to higher  yielding  loans (i.e.,
    equity  loans,   multi-family  (five  (5)  or  more  units)  buildings,  and
    commercial (non-residential) mortgages.  Although the Savings Bank 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.
<PAGE>

    Other  Income:  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 Federal National  Mortgage  Association  ("FNMA"),  Student Loan
    Mortgage Association ("SLMA"), Federal Home Loan

                                                                              11
<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Mortgage  Corporation  ("FHLMC")  and other equity  securities  during 1997.
    Other operating  income  decreased $1.0 million to $2.1 million in 1997 from
    $3.1 million in 1996.  This was mainly  attributable  to a decrease of other
    income from Branchview, Inc. of $2.4 million offset by an increase of income
    from subsidiary  activity of  Lakeview Mortgage  Depot, Inc. ("LMD") of $1.1
    million due to  increased  lending.  In 1995,  Branchview  sold its majority
    interest in Residential Money Center, a residential  mortgage  company.  See
    footnote 7 to the consolidated financial statements.

    Total other income  decreased  $177,000 or 2.5% to $7.0 million for the year
    ended July 31, 1996 from $7.2 million for the year ended July 31, 1995.  The
    Savings  Bank's  realized gains on  investments  increased  $662,000 to $2.8
    million in 1996 from $2.1 million in 1995.  This increase  resulted from the
    sale of FNMA,  SLMA,  FHLMC and other equity  securities  during 1996. Other
    operating  income  decreased  $756,000  to $3.1  million  in 1996  from $3.9
    million in 1995. This was mainly attributed to a decrease of income from the
    Branchview,  Inc.  subsidiary from $2.5 million in 1996 from $3.6 million in
    1995.

    Other  Expenses:  Total other expenses  increased $2.3 million or 21.0%,  to
    $13.2 million in 1997 from $10.9 million in 1996. The increase was primarily
    the result of a $2.2 million special assessment required to recapitalize the
    Savings  Association  Insurance  Fund  ("SAIF").  On September 30, 1996, the
    President signed into law legislation which included the recapitalization of
    SAIF by a one time charge to SAIF-insured  institutions of 65.7 basis points
    per $100 of insurable  deposits as of March 31, 1995. Future deposit expense
    will be lower as a result of this  one-time  charge.  The  legislation  also
    provides  that the Savings Bank will pay, in addition to the normal  deposit
    insurance  premium  as a member  of the  SAIF,  an  annual  amount  equal to
    approximately  6.4 basis  points of  outstanding  SAIF  deposits  toward the
    retirement of the Financing  Corporation  Bonds ("Fico Bonds") issued in the
    1980's to assist in the recovery of the savings and loan  industry.  Members
    of the Bank  Insurance Fund ("BIF"),  by contrast,  will pay, in addition to
    their  normal  deposit  insurance  premium,  approximately  1.3 basis points
    toward the retirement of the Fico Bonds.  Beginning no later than January 1,
    2000,  the rate paid to retire the Fico  Bonds will be equal for  members of
    the BIF and the SAIF.  The Act also  provides for the merging of the BIF and
    the SAIF by  January 1, 1999  provided  there are no  financial institutions
    still  chartered as savings  associations  at that tin, Should the insurance
    funds be merged before January 1, 2000, the rate paid by all members of this
    new fund to retire the Fico Bonds would be equal.

    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 $390,000 due to the increase of the market
    value o the Company's  stock and $410,000 for the hiring of eleven new staff
    persons for the Company's subsidiary, LMD. LMD opened two additional offices
    during the year.

    Net losses from REO  operation  decreased  $715,000 or 77.64X to $206,000 in
    1997  from  $921,000  in 1996.  The  decrease  primarily  attributed  to the
    decrease in  provisions of REO lot to $44,000 in 1997 from $655,000 in 1996.
    Management  of the  Savings  Bank  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.

    A great deal of information has been disseminated  about the global computer
    year 2000.  Many computer  programs that can only  distinguish the final two
    digits of the year entered common programming practice in earlier years) are
    expect  to read  entries  for the  year  2000 as the year  1900 and  compute
    payment,  interest or delinquency based on the wrong date or are expected to
    be unable to compute  payment,  interest or delinquency.  Rapid and accurate
    data  processing  is essential to the  operation of the Savings  Bank.  Date
    processing is also essential to most other financial  institutions  and many
    other  companies.  All of the material data processing the Savings Bank that
    could be  affected by this  problem is  provided  by a third  party  service
    bureau. The service  bureau of the Savings Bank has advised the Savings Bank
    that it  expects  to be year 2000  compliant  prior to  December  31,  1999.
    However,  if the service  bureau is unable to resolve  potential  problem in
    time, the Savings Bank would likely  experience  significant data processing
    delays, mistakes or failures.  These delays, mistakes or failures could have
    a significant adverse impact on the financial condition and result operation
    of the Savings Bank.

12
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    Total other  expenses  increased  $176,000 or 1.6%, to $10.9 million in 1996
    from $10.7 million in 1995.  The increase was primarily  attributable  to an
    increase in employee  compensation  of $282,000 to $4.6 million in 1996 from
    $4.4 million in 1995.  The increase was mainly  attributed  to the increased
    staffing  of LMD which was formed in October  of 1995.  Net losses  from REO
    operation  increased $271,000 to $921,000 in 1996 from $650,000 in 1995. The
    increase was mainly  attributed to an increase in provisions  for REO losses
    of $152,000 to $654,000 in 1996 from  $502,000 in 1995,  which was partially
    offset by a decrease in other operating expenses of $400,000 in 1996.

    Liquidity and Capital Resources

    The Savings Bank's primary sources of funds includes savings deposits,  loan
    repayments and  prepayments,  cash flow from  operations and borrowings from
    the FHLB.  The Savings Bank uses its capital  resources  principally to fund
    loan   origination  and  purchases,   repay  maturing   borrowings  and  for
    investments,  and for short and long-term  liquidity needs. The Savings Bank
    expects to be able to fund or refinance,  on a timely basis, its commitments
    and  long-term  liabilities.  As of July  31,  1997,  the  Savings  Bank had
    commitments to fund loans of $6,104,000.

    The Savings Bank'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  Savings  Bank's  operating,  financing  and
    investment  activities  during any given period.  At July 31, 1997, cash and
    cash equivalents totaled $5.4 million.

    Net cash  provided by  operating  activities  for fiscal 1997  totaled  $3.6
    million,  as compared to $2.7 million for fiscal 1996.  Net cash provided by
    operating  activities  for fiscal 1996 totaled $2.7 million,  as compared to
    $10.2 million for fiscal 1995.

    Net cash used in investing activities for fiscal 1997 totaled $23.3 million,
    a decrease  from fiscal 1996 of $17.5  million.  The decrease 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 loans of $42.2 million and 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 investing activities for fiscal 1996 totaled $40.8 million,
    an increase  from fiscal 1995 of $41.3  million.  The increase was primarily
    attributable to an increase in 1995 of $9.5 million in net proceeds from the
    sale of available  for sale  investment  securities,  cash used for net loan
    originations  and  purchases of loans of $12.0  million and net purchases of
    investment and mortgage-backed securities of $20.0 million.

    Net cash provided by financing  activities  for the year ended July 31, 1997
    totaled  $18.7  million.  This is 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.

    Net cash  provided by financing  activities  for fiscal 1996  totaled  $36.9
    million.  This is a result of a net  increase in deposits of $10.8  million,
    and an increase in net borrowings of $34.9 million offset by the purchase of
    treasury stock of $6.7 million and ESOP shares of $1.6 million.

    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 Savings Bank's  commitment to make loans and management's  assessment
    of the Savings  Bank's ability to generate  funds.  The Savings Bank is also
    subject  to  federal   regulations   that  impose  certain  minimum  capital
    requirements.

    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.

                                                                              13
<PAGE>

    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Lakeview Financial Corp. and Subsidiaries
    Consolidated Balance Sheets
    July 31, 1996 and 1997
<TABLE>
<CAPTION>

                                                                                          1996           1997  
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>         
    Assets
    Cash on hand and in banks...................................................     $  6,902,040   $  5,399,466
    Investment securities held to maturity, market value of
    $40,083,449 and $41,934,692 at July 31, 1996 and 1997,
    respectively (note 4).......................................................       40,821,195     42,681,799
    Investment securities available for sale (note 5) ..........................       89,967,424    105,592,249
    Equity securities restricted for sale, market value of $19,942,272
    at July 31, 1996 (note 7) ..................................................        7,806,358              -
    Mortgage-backed securities held to maturity, market value of
    $119,471,910 and $102,343,945 at July 31, 1996 and 1997,
    respectively (notes 6 and 13) ..............................................      121,461,936    102,248,545
    Loans receivable, net (notes 8 and 13)......................................      163,457,374    224,563,595
    Real estate owned, net (note 9).............................................        1,666,553      1,929,447
    Investments required by law - stock in the Federal Home
    Loan Bank of New York, at cost (note 13) ...................................        2,587,400      3,550,000
    Accrued interest receivable (note 10).......................................        3,646,512      3,475,581
    Office properties and equipment, net (note 11)..............................        4,182,639      4,027,940
    Excess of cost over fair value of net assets acquired, net (note 3).........       10,176,424      8,856,136
   Other assets.................................................................        5,184,150      3,557,442
-----------------------------------------------------------------------------------------------------------------
    Total assets................................................................     $457,859,985   $505,882,200
-----------------------------------------------------------------------------------------------------------------
    Liabilities and Stockholders, Equity
    Deposits (note 12)..........................................................      354,246,770    370,787,103
    Borrowings (note 13)........................................................       52,384,015     61,250,000
    Borrowings - ESOP (note 16).................................................        2,337,414      2,353,825
    Advance payments by borrowers for taxes and insurance.......................        1,711,930      2,259,134
    Net deferred tax liability (note 14)........................................                -      6,094,000
    Other liabilities...........................................................        1,420,176      1,329,003
-----------------------------------------------------------------------------------------------------------------
    Total liabilities...........................................................      412,100,305    444,073,065

    Common  stock  - $2.00  par  value;  authorized  10,000,000  
    shares, issued 6,441,504 shares and outstanding 4,531,408 and 4,509,054
    shares at July 31, 1996 and 1997............................................        5,856,152      6,441,504
    Additional paid-in capital..................................................       26,186,632     33,188,027
    Retained income substantially restricted....................................       29,186,632     28,617,200
    Unrealized (loss) gain on securities available for sale, net of tax.........       (1,884,921)    14,457,898
    Treasury stock at cost, 1,457,218 and 1,932,450 shares at
    July 31, 1996 and 1997......................................................      (10,655,120)   (17,357,996)
    Unallocated ESOP shares.....................................................       (2,306,895)    (2,407,250)
    Unallocated MSBP shares.....................................................       (1,420,648)    (1,130,248)
-----------------------------------------------------------------------------------------------------------------
    Total stockholders' equity (notes 2, 14, 16, and 18)........................       45,759,680     61,809,135
    Commitments and contingencies (notes 8 and 17)..............................    
-----------------------------------------------------------------------------------------------------------------
    Total liabilities and stockholders' equity .................................     $457,859,985   $505,882,200
-----------------------------------------------------------------------------------------------------------------
</TABLE>

14         See accompanying notes to consolidated financial statements.
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

Lakeview Financial Corp. and Subsidiaries
Consolidated Statements of Income
Years ended July 31, 1995, 1996 and 1997
<TABLE>
<CAPTION>

                                                                                       1995            1996            1997
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>             <C>         
Interest income:
Loans receivable ...............................................................  $ 12,509,446    $ 14,131,327    $ 16,841,183
Mortgage-backed securities .....................................................    11,162,655       9,604,671       7,319,449
Investment securities, held to maturity and Federal funds ......................     4,535,201       3,004,345       3,425,496
Investment securities available for sale .......................................       222,924       4,232,012       5,255,997
------------------------------------------------------------------------------------------------------------------------------
Total interest income ..........................................................    28,430,226      30,972,355      32,842,125
------------------------------------------------------------------------------------------------------------------------------
Interest expense:
Interest on deposits (note 12) .................................................    11,943,596      14,064,295      13,987,512
Interest on borrowings .........................................................     1,594,984       2,485,475       3,330,542
------------------------------------------------------------------------------------------------------------------------------
Total interest expense .........................................................    13,538,580      16,549,770      17,318,054
------------------------------------------------------------------------------------------------------------------------------
Net interest income ............................................................    14,891,646      14,422,585      15,524,071

Provision for losses on loans (note 8)..........................................     1,376,404         664,221         961,217
------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for losses on loans.........................    13,515,242      13,758,364      14,562,854
------------------------------------------------------------------------------------------------------------------------------
Other income:
Loan fees and service charges ..................................................     1,235,073       1,153,266       1,192,971
Net realized gains on sales of investment securities
available for sale and trading securities ......................................     2,107,244       2,768,781       4,787,866
Other operating income (note 7) ................................................     3,864,028       3,107,539       2,120,763
------------------------------------------------------------------------------------------------------------------------------
Total other income .............................................................     7,206,345       7,029,586       8,101,600
------------------------------------------------------------------------------------------------------------------------------
Other Expenses:
Compensation and employee benefits (notes 15 and 16)............................     4,366,722       4,648,774       5,707,554
Office occupancy and equipment expense (note 11) ...............................       829,861         871,113         932,128
Net loss on real estate owned activities (note 9)...............................       650,194         920,917         206,369
Other operating expenses .......................................................     3,524,382       3,106,738       2,769,553
SAIF recapitalization assessment (note 22) .....................................             -               -       2,218,674
Amortization of the excess of cost over fair value of net
assets acquired ................................................................     1,320,288       1,320,288       1,320,288
------------------------------------------------------------------------------------------------------------------------------
Total other expenses............................................................    10,691,447      10,867,830      13,154,566
------------------------------------------------------------------------------------------------------------------------------
Income before federal and state income tax .....................................    10,030,140       9,920,120       9,509,888
------------------------------------------------------------------------------------------------------------------------------
Federal and state income tax expense (benefit) (note 14):
Current ........................................................................     3,889,513       4,112,206       3,835,877
Deferred........................................................................      (154,000)       (466,000)       (387,000)
------------------------------------------------------------------------------------------------------------------------------
Total federal and state income tax .............................................     3,735,513       3,646,206       3,448,877
------------------------------------------------------------------------------------------------------------------------------
Net income .....................................................................   $ 6,294,627     $ 6,273,914     $ 6,061,011
------------------------------------------------------------------------------------------------------------------------------
Earnings per common share
(reflects two for one stock split) .............................................   $      1.01     $      1.13     $      1.20
------------------------------------------------------------------------------------------------------------------------------
</TABLE> 

          See accompanying notes to consolidated financial statements.

                                                                              15
<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Lakeview Financial Corp. and Subsidiaries
    Consolidated Statements of Cash Flows
    Years ended July 31, 1995, 1996 and 1997
<TABLE>
<CAPTION>
                                                                                       1995              1996             1997
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>               <C>              <C>         
    Cash flows from operating activities:
    Net income..................................................................  $  6,294,627      $  6,273,914     $  6,061,011
    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................................................     1,320,288         1,320,288        1,320,288
    Amortization of discounts and premiums, net.................................      (259,384)         (473,518)        (374,070)
    Provision for losses on loans and real estate...............................     2,303,781         1,318,710        1,005,000
    Gain on sale of loans.......................................................        (6,040)           (9,598)          (5,104)
    Net realized gains on investment securities
    available for sale and trading securities...................................    (2,107,244)       (2,768,781)      (4,787,866)
    Net gain on sale of real estate owned.......................................      (223,884)          (26,043)         (47,612)
    (Decrease) increase in accrued interest receivable..........................         2,695          (928,163)         170,931
    Net decrease in deferred loan fees..........................................      (137,479)          (67,691)         (33,646)
    (Increase) decrease in other assets.........................................    (1,654,851)         (507,487)       1,626,708
    Amortization of ESOP shares.................................................       297,881           312,708          900,638
    Amortization of MSBP shares.................................................       505,454           445,564          481,731
    Increase (decrease) in other liabilities....................................     3,556,573        (2,473,471)      (3,055,672)
    Depreciation, net...........................................................       264,081           288,225          320,279
----------------------------------------------------------------------------------------------------------------------------------
    Net cash provided by operating activities...................................    10,156,498         2,704,657        3,582,616
----------------------------------------------------------------------------------------------------------------------------------
    Cash flows from investing activities:
    Originations of loans.......................................................   (31,274,312)      (40,782,321)     (81,639,026)
    Principal payments on loans.................................................    19,582,717        20,366,983       22,406,474
    Purchase of loans...........................................................      (136,946)       (2,686,962)      (3,975,546)
    Proceeds from the sale of loans.............................................     1,171,675           924,888          409,900
    Net increase in office properties and equipment.............................      (402,733)         (171,270)        (165,580)
    Principal payments on mortgage-backed securities held to maturity...........    16,629,760        25,230,317       19,381,231
    Purchases of mortgage-backed securities
    held to maturity............................................................   (18,762,454)       (2,773,214)               -
    Maturities of investment securities held to maturity........................    10,975,000        41,096,117        7,000,000
    Purchase of investment securities held to maturity..........................    (4,057,500)     (107,027,312)      (8,811,748)
    Proceeds from sale of investment securities
    available for sale..........................................................    20,864,634        37,440,781       51,894,066
    Purchases of investment securities available for sale.......................   (16,141,726)      (34,163,638)     (34,873,300)
    Proceeds from maturity of investment securities
    available for sale..........................................................             -        18,319,150        3,000,000
    Principle payments on investment securities
    available for sale..........................................................             -         1,534,201        1,784,698
</TABLE>

                                                                     (continued)
16


<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    Lakeview Financial Corp. and Subsidiaries
    Consolidated Statements of Cash Flows
    Years ended July 31, 1995, 1996 and 1997 continued
<TABLE>
<CAPTION>
                                                                                       1995            1996           1997
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>              <C>            <C>       
    Cash flows from investing activities, cont.:
    Proceeds from sale of trading securities....................................             -      16,147,077     21,416,368
    Purchases of trading securities.............................................             -     (15,871,424)   (20,776,177)
    Increase in Federal Home Loan Bank stock....................................      (731,100)              -       (962,600)
    Proceeds from sale of real estate owned.....................................     2,771,608       1,644,527        592,862
----------------------------------------------------------------------------------------------------------------------------------
    Net cash provided by (used in) investing activities.........................       488,623     (40,771,830)   (23,318,378)
----------------------------------------------------------------------------------------------------------------------------------
    Cash flows from financing activities:
    Net decrease (increase) in deposits.........................................    (1,425,210)     10,757,443     16,540,333
    Net increase in borrowings..................................................       837,500      34,862,500      8,882,396
    Net increase in advance payments by borrowers
    for taxes and insurance.....................................................        61,161         210,477        547,204
    Proceeds from stock offering................................................             -               -              -
    Purchase of treasury stock..................................................    (3,970,106)     (6,685,014)    (6,702,876)
    Purchase of shares by ESOP..................................................             -      (1,615,985)      (446,881)
    Dividends paid..............................................................      (615,430)       (581,874)      (586,988)
----------------------------------------------------------------------------------------------------------------------------------
    Net cash (used in) provided by financing activities.........................    (5,112,085)     36,947,547     18,233,188
----------------------------------------------------------------------------------------------------------------------------------
    Increase (decrease) in cash and cash equivalents............................     5,533,036      (1,119,626)    (1,502,574)
    Cash and cash equivalents at beginning of year..............................     2,488,630       8,021,666      6,902,040
----------------------------------------------------------------------------------------------------------------------------------
    Cash and cash equivalents at end of year....................................   $ 8,021,666     $ 6,902,040    $ 5,399,466
----------------------------------------------------------------------------------------------------------------------------------
    Cash paid during the year for:
    Interest....................................................................    12,923,418      14,055,717     14,372,086
    Income taxes................................................................     3,995,000       4,767,992      1,735,153
    Supplemental disclosure of noncash investing
    and financing activities:
    Transfer of loans  receivable  to real  estate  owned.......................     3,084,247         331,114        732,276
    Transfer of  investment  securities  held to  maturity  to  
    investments securities available for sale...................................    11,579,750      80,858,447              -
    Transfer of federal funds deposit to loans..................................       850,000               -              - 
    Transfer of mortgage-backed securities held to maturity
    to investment securities available for sale.................................             -      31,746,557              -

    Transfer of restricted equity securities to investment securities 
      available for sale........................................................             -               -      7,806,358
</TABLE>

          See accompanying notes to consolidated financial statements.
                                                                              17
<PAGE>

    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Lakeview Financial Corp. and Subsidiaries
    Consolidated Statements of Stockholders' Equity
    Years ended July 31, 1995, 1996 and 1997
<TABLE>
<CAPTION>
                                                                                         Common stock
-----------------------------------------------------------------------------------------------------------------------------
                                                                                      Number                     Additional
                                                                                        of          Dollar        Paid-in
                                                                                      shares        amount        capital 
-----------------------------------------------------------------------------------------------------------------------------

<S>                                                                                  <C>          <C>            <C>        
    Balance at July 31, 1994....................................................     4,840,000    $ 4,840,000    $18,574,374
    Amortization of ESOP shares.................................................             -              -        116,791
    Amortization of MSBP shares.................................................             -              -        199,654
    Net income..................................................................             -              -              -
    Cash dividend...............................................................             -              -              -
    Purchase of treasury stock..................................................      (519,016)             -              -
    Stock dividend..............................................................       483,920        483,920      2,843,030
    Cumulative effect of accounting change -
    Adoption of FASB 115, net of tax (see note 1)...............................             -              -              -
    Change in unrealized loss on securities available for sale, net of tax......             -              -              -
-----------------------------------------------------------------------------------------------------------------------------
    Balance at July 31, 1995....................................................     4,804,904    $ 5,323,920     $21,733,849
-----------------------------------------------------------------------------------------------------------------------------
    Common stock acquired by ESOP...............................................             -              -               -
    Amortization of ESOP shares.................................................             -              -         168,708
    Amortization of MSBP shares.................................................             -              -         126,012
    Net income..................................................................             -              -               -
    Cash dividend...............................................................             -              -               -
    Purchase of treasury stock..................................................      (643,982)             -               -
    Stock dividend distribution.................................................       370,486        532,232       4,158,063
    Change in unrealized loss on securities available for sale, net of tax......             -              -               -
-----------------------------------------------------------------------------------------------------------------------------
    Balance at July 31, 1996....................................................     4,531,408     $5,856,152     $26,186,632
-----------------------------------------------------------------------------------------------------------------------------
    Common stock acquired by ESOP...............................................             -              -               -
    Amortization of ESOP shares.................................................             -              -         554,113
    Amortization of MSBP........................................................             -              -         191,331
    Net income..................................................................             -              -               -
    Purchase of treasury stock..................................................       475,232              -               -
    Stock dividend..............................................................      (497,586)       585,352       6,255,951
    Change in unrealized gain on securities available for sale, net of tax......             -              -               -
-----------------------------------------------------------------------------------------------------------------------------
    Balance at July 31, 1997....................................................     4,509,054     $6,441,504     $33,188,027
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

18
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                                   Net unrealized gain         Total
       Treasury     Retained         Unallocated shares            (loss) on securities    stockholders'
       stock        income         ESOP               MSBP         available for sale          equity
--------------------------------------------------------------------------------------------------------
<S>            <C>                 <C>           <C>                     <C>               <C>         
            -  $ 26,630,488        $(1,016,000)   $(2,046,000)                     -        $ 46,982,862
            -             -            181,090              -                      -             297,881
            -             -                  -        305,800                      -             505,454
            -     6,294,627                  -              -                      -           6,294,627
            -      (615,430)                 -              -                      -            (615,430)
   (3,970,106)            -                  -              -                      -          (3,970,106)
            -    (3,326,950)                 -              -                      -                   - 
            -             -                  -              -                198,920             198,920
                          -                  -              -               (253,974)           (253,974)
--------------------------------------------------------------------------------------------------------
 ($ 3,970,106) $ 28,982,735         ($ 834,910)   ($1,740,200)             ($ 55,054)        $49,440,234
--------------------------------------------------------------------------------------------------------
            -             -         (1,615,985)             -                      -          (1,615,985)
            -             -            144,000              -                      -             312,708
            -             -                  -        319,552                      -             445,564
            -     6,273,914                  -              -                      -           6,273,914
            -      (581,874)                 -              -                      -            (581,874)
   (6,685,014)            -                  -              -                      -          (6,685,014)
            -    (4,690,295)                 -              -                      -                   -
            -             -                  -              -             (1,829,867)         (1,829,867)
--------------------------------------------------------------------------------------------------------
($ 10,655,120) $ 29,984,480       ($ 2,306,895)  ($ 1,420,648)          ($ 1,884,921)       $ 45,759,680
--------------------------------------------------------------------------------------------------------
            -             -           (446,881)             -                      -            (446,881)
            -             -            346,526              -                      -             900,639
            -             -                  -        290,400                      -             481,731
            -     6,061,011                  -              -                      -           6,061,011
            -      (586,988)                 -              -                      -            (586,988)
   (6,702,876)            -                  -              -                      -          (6,702,876)
            -    (6,841,303)                 -              -                      -                   -
            -             -                  -              -              16,342,819         16,342,819
--------------------------------------------------------------------------------------------------------
 ($17,357,996)  $28,617,200        ($2,407,250)   ($1,130,248)            $14,457,898        $61,809,135
--------------------------------------------------------------------------------------------------------
</TABLE>
           See accompanying notes to consolidated financial statements
                                                                              19
<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Lakeview Financial Corp. and Subsidiaries
    Notes to Consolidated Financial Statements
    July 31, 1996 and 1997

    Note 1
    Summary of Significant Accounting Policies

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

    Business:

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

    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 (LSB),  LVS, Inc.  (LVS),  Lakeview  Investment  Services Inc.  (LISI),
    Branchview,  Inc. (Branchview),  Lakeview Credit Card Services, Inc. (LCCS),
    and Lakeview Mortgage Depot, Inc. (LMD).

    On August 25, 1994, LSB completed a  reorganization  into a holding  company
    form of  ownership,  and LSB became a  wholly-owned  subsidiary  of Lakeview
    Financial  Corp. The  stockholders  of LSB exchanged their shares of LSB for
    the same number of shares of Lakeview Financial Corp.

    Investment Securities 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 over the estimated  life of the respective
    security using a method that approximates the level yield method.

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


<PAGE>

    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 non-interest income or expense.

    Income Taxes:

    The Bank  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

20
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    assets and  liabilities  using  enacted  tax rates in effect for the year in
    which the differences are expected to be settled (see note 14).

    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.

    The Bank  accounts  for  impaired  loans in  accordance  with  Statement  of
    Financial  Accounting  Standards ("SFAS") No. 114,  "Accounting by Creditors
    for  Impairment  of a Loan"  ("SFAS 114") and SFAS No. 118,  "Accounting  by
    Creditors for Impairment of a Loan - Income  Recognition  and  Disclosures".
    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 impaired
    loan portfolio.

    Real Estate Owned:

    Real  estate  owned,  acquired  through  foreclosure  or  deed  in  lieu  of
    foreclosure,  is carried at the lower of estimated fair value 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 Losses On Loans And Real Estate Owned:

    The  allowances  for  losses  on loans  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.  Subsequent  recoveries,  if any, are added back to
    the allowances.

    Cash and Cash Equivalents:

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

    Earnings Per Share:

    Income per common share is calculated by dividing net income, by the average
    number  of  shares  of common  stock  and  average  number  of common  stock
    equivalents  outstanding  during the period.  The weighted average number of
    shares  outstanding during the year ended July 31, 1997 used in the earnings
    per share  calculation  was  5,071,444.  As shares  from the Bank's ESOP are
    released from  collateral,  they become  outstanding  for earnings per share
    computations.  Per share data has been  adjusted  to  reflect  the 10% stock
    dividends  paid during 1995,  1996 and 1997. On September 4, 1997,  Lakeview
    Financial  Corp.  declared a two for one stock split  payable on October 15,
    1997, to stockholders  of record as of October 1, 1997.  Share data has been
    adjusted to reflect the stock split.

    Reclassifications:

    Certain  reclassifications  have been made to the 1995 and 1996  amounts  to
    conform to the 1997 presentation.

    
<PAGE>

    Note 2
    Conversion from Mutual to Stock Form of Ownership:

    On  December  22,  1993,  the Bank  completed  its  conversion  from a state
    chartered  mutual savings bank to a state  chartered stock savings bank. The
    Bank issued  2,420,000  shares at $10 per share for a total of  $24,200,000.
    The net proceeds of the stock offering,  after reflecting  offering expenses
    of $880,626, were $23,319,374. The proceeds were added to the Bank's general
    funds to be used for general corporate purposes.

                                                                              21

<PAGE>

    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    As part of the  reorganization to the stock form of ownership,  the Lakeview
    Savings Bank Employee Stock Ownership Plan (ESOP)  purchased  110,000 shares
    of the Bank's common stock at $10 per share, or $1,100,000, which was funded
    by  a  loan  from  an  unaffiliated   lender.   The  Bank  intends  to  make
    discretionary  cash  contributions  to the ESOP  sufficient  to service  the
    amount  borrowed.  Additionally,  the Lakeview Savings Bank Management Stock
    Bonus  Plan  (MSBP)  purchased  220,000  shares  at $10 per  share  totaling
    $2,200,000.  The funds used to acquire the MSBP shares were  contributed  by
    the Bank. The Bank has allocated 66% of the shares to directors officers and
    other key employees of the Bank (see note 16j.

    Note 3
    Excess of Cost Over Fair Value of Net Assets Acquired, Net:

    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 asset and liabilities  acquired  amounted to $12,430,000 and is
    being amortized on a straight-line  basis over ten years. Total amortization
    charged to date amounts to $4,110,000  at July 31 1997.  The Bank also has a
    core deposit  premium of $536,136  from a prior  acquisition  which is being
    amortized  on  a  straight  line  basis  over  15  years,  which  has  total
    amortization charged to date of $548,237, at July 31, 1997.

    Note 4
    Investment Securities Held to Maturity:
    The amortized cost and estimated market values of investment securities held
    to maturity as of July 31, 1996 and 1997 are as follows:

<TABLE>
<CAPTION>

                                                                                             Gross        Gross       Estimated  
                                                                               Amortized   unrealized   unrealized      market
                                                                                 cost        gains        losses        value
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>           <C>           <C>         <C>        
    July 31, 1996:
    FHLB obligations.......................................................  $20,741,938   $   8,062     ($518,850)   $20,231,150
    FHLMC obligations......................................................   14,079,257     115,743      (264,225)    13,930,775
    FNMA obligations.......................................................    6,000,000           -       (78,476)     5,921,524
----------------------------------------------------------------------------------------------------------------------------------
                                                                             $40,821,195   $ 123,805     ($861,551)   $40,083,449 
----------------------------------------------------------------------------------------------------------------------------------
    July 31, 1997:
    FHLB obligations.......................................................  $22,574,313   $   1,845     ($561,798)   $22,014,360
    FHLMC obligations......................................................   14,107,486      11,398      (173,195)    13,945,689
    FNMA obligations.......................................................    6,000,000      20,800       (46,157)     5,974,643
----------------------------------------------------------------------------------------------------------------------------------
                                                                             $42,681,799   $  34,043     ($781,150)   $41,934,692
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
     
    The yield on the  obligations  increases  periodically  over the contractual
    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, 1997, by contractual maturity, are shown below:
<TABLE>
<CAPTION>
                                                                                                 Estimated
                                                                                 Amortized         market
                                                                                    cost           value 
-----------------------------------------------------------------------------------------------------------
<S>                                                                              <C>            <C>         
    Due in one year or less..................................................... $          -   $         - 
    Due after one year through five years.......................................            -             -
    Due after five years through ten years......................................    9,230,917     9,155,930
    Due after ten years.........................................................   33,450,882    32,778,762
-----------------------------------------------------------------------------------------------------------
                                                                                 $42,681,799    $41,934,692
-----------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------


    Note 5
    Investments Available for Sale

    The amortized cost and estimated market values of investments  available for
    sale at July 31, 1996 and 1997 are as follows:
<TABLE>
<CAPTION>
                                                                                                Gross     Gross      Estimated
                                                                                Amortized    unrealized unrealized     market
                                                                                   cost         gains     losses       value
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>           <C>         <C>          <C>        
    July 31, 1996:
    U.S. Agency Securities ..............................................     $59,899,079             - $(1,853,868) $ 58,045,211
    GNMA MBS.............................................................       4,520,361       163,406           -     4,683,767
    FNMA\FHLMC REMICS....................................................       1,994,239        41,499      (2,067)    2,033,671
    Private issue REMICS.................................................       9,999,368             -    (477,784)    9,521,584
    Municipal Bonds......................................................       3,229,386             -    (146,776)    3,082,610
    Equity Securities....................................................      13,269,260       121,670    (790,349)   12,600,581
------------------------------------------------------------------------------------------------------------------------------------
                                                                              $92,911,693   $   326,575 $(3,270,844) $ 89,967,424
------------------------------------------------------------------------------------------------------------------------------------

    July 31, 1997:
    U.S. Agency Securities...............................................     $48,931,454   $     8,843 ($  159,450) $ 48,780,847
    GNMA MBS.............................................................       3,979,652       212,005           -     4,191,657
    FNMA\FHLMC REMICS....................................................       1,440,104        54,970      (6,093)    1,488,981
    Private issue REMICS.................................................       9,377,799             -     (93,881)    9,283,918
    Equity Securities....................................................      19,406,190    22,699,555    (258,899)   41,846,846
------------------------------------------------------------------------------------------------------------------------------------
                                                                              $83,135,199   $22,975,373 ($  518,323) $105,592,249
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    The amortized cost and estimated market values of debt investments available
    for sale at July 31, 1997, by contractual maturities are shown below:

<TABLE>
<CAPTION>
                                                                                                Estimated
                                                                                Amortized         market
                                                                                  cost            value
----------------------------------------------------------------------------------------------------------
<S>                                                                           <C>             <C>         
    Due in one year or less..............................................     $          -    $          -
    Due after one year through five years................................        3,000,000       2,980,449
    Due after five years through ten years...............................       22,954,704      22,950,348
    Due after ten years..................................................       37,774,305      37,814,606
----------------------------------------------------------------------------------------------------------
                                                                              $ 63,729,009    $ 63,745,403
----------------------------------------------------------------------------------------------------------
</TABLE>

    During the years ended July 31, 1995, 1996, and 1997,  proceeds from sale of
    securities available for sale of $20,864,634,  $37,440,781, and $51,894,066,
    respectively,  were  received,  resulting  in  gross  gains  of  $2,107,244,
    $2,493,128, and $4,147,674, respectively.

    During the years ended July 31, 1995, 1996, and 1997,  proceeds from sale of
    trading securities of $0, $16,147,077, and $21,416,368,  respectively,  were
    received,   resulting  in  gross  gains  of  $0,  $275,653,   and  $640,192,
    respectively.

                                                                              23



<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Note 6
    Mortgage-backed Securities Held to Maturity

    The amortized cost and estimated market values of mortgage-backed securities
    held to maturity as of July 31, 1996 and 1997 are as follows:
<TABLE>
<CAPTION>
                                                                                        Gross        Gross          Estimated   
                                                                        Amortized     unrealized    unrealized        market
                                                                           cost         gains        losses           value
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>           <C>            <C>            <C>          
                                                                                                                  
    July 31, 1996:                                                                                                
    FHLMC...........................................................  $ 47,954,027    $130,680     $  (944,332)   $ 47,140,375 
    FNMA ...........................................................    38,922,756     253,491        (584,785)     38,591,462
    FNMA/FHLMC/REMICs ..............................................    34,585,153     265,693      (1,110,773)     33,740,073
-------------------------------------------------------------------------------------------------------------------------------
                                                                      $121,461,936    $649,864     ($2,639,890)   $119,471,910
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                               
    July 31, 1997:
    FHLMC...........................................................   $40,305,745  $  423,638     $  (395,976)   $ 40,333,407
    FNMA............................................................    32,149,057     558,347        (156,021)     32,551,383
    FNMA/FHLMC/REMICS...............................................    29,793,743     284,807        (619,395)     29,459,155
-------------------------------------------------------------------------------------------------------------------------------
                                                                      $102,248,545  $1,266,792     ($1,171,392)   $102,343,945
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    The amortized cost and market value of  mortgage-backed  securities  held to
    maturity at July 31,  1997,  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.
<TABLE>
<CAPTION>
                                                                                    Estimated
                                                                       Amortized      market
                                                                         cost         value

<S>                                                                 <C>             <C>         
    Due in one year or less.........................................$          -    $          -
    Due after one year through five years...........................  39,363,174      39,032,002
    Due after five years through ten years..........................  17,374,783      17,471,249
    Due after ten years.............................................  45,510,588      45,840,694
-------------------------------------------------------------------------------------------------------------------------------
                                                                    $102,248,545    $102,343,945
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

24
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    Note 7 Investments Held By Subsidiary

    On February 6, 1995,  Branchview Inc., a subsidiary of the Savings Bank 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 owns 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  $4,778,000.  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.

    As of July 31, 1996,  the carrying value of  Branchview's  investment in IMC
    was $7,806,000  represented by the 830,928 shares of restricted common stock
    of IMC. Although the investment in IMC is represented by equity  securities,
    it is carried at cost because the restriction period at July 31, 1996 was in
    excess of one year.  The market value of such  investment  at July 31, 1996,
    based on the quoted market price per share of the unrestricted  common stock
    was $19.9 million.  Included in other income in 1996 is  approximately  $2.3
    million  representing the Bank's share of partnership  earnings in IMC prior
    to its reorganization.

    On February 13, 1997, IMC paid a 2 for 1 stock dividend raising Branchview's
    share total to 1,661,856  shares at July 31, 1997,  with a current  price of
    $18 per share for a total  market value of  $29,913,408.  On April 23, 1997,
    IMC  completed  a  secondary  offering  of  which  Branchview  purchased  no
    additional  shares  of  their  stock.  However,  during  the  year  Lakeview
    purchased  an  additional  40,000  shares  of IMC stock  for  $585,600.  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 the  offering.  No
    restricted  shareholder  is  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 $8,391,958 into the Investment Securities
    Available for Sale category at a market value of  $30,633,408,  resulting in
    an  unrealized  gain  net of tax,  of  $14,319,872,  which  is  included  in
    stockholders' equity.

    On January 12, 1996, Lakeview granted a line of credit to IMC for $7 million
    with an  interest  rate of  10%.  As of July  31,  1997,  $6.8  million  was
    outstanding.  For the fiscal year ended July 31,  1997,  interest  income on
    this line of credit amounted to $269,444.

    Note 8
    Loans Receivable, Net

    A  comparative  summary of loans  receivable at July 31, 1996 and 1997 is as
    follows:
<TABLE>
<CAPTION>
                                                                                      1996             1997
----------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>              <C>         
     Loan balances by type:
     Real estate loans..........................................................  $163,279,564     $216,895,904
     Construction loans.........................................................       762,715          377,120
     Consumer loans.............................................................     1,517,033        1,913,722
     Other......................................................................     1,191,082        8,982,009
----------------------------------------------------------------------------------------------------------------
                                                                                   166,750,394      228,168,755
----------------------------------------------------------------------------------------------------------------
    Less:
    Allowance for loan losses...................................................     3,073,158        3,411,461
    Deferred loan fees..........................................................       219,862          193,699
----------------------------------------------------------------------------------------------------------------
                                                                                  $163,457,374     $224,563,595
----------------------------------------------------------------------------------------------------------------
</TABLE>
                                                                              25
<PAGE>

    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    The Bank serviced loans for others in the approximate amount of $17,927,900,
    $13,792,727 and $11,781,761 at July 31, 1995, 1996 and 1997, respectively.

    A comparative  summary of non-accrual  loans at July 31, 1996 and 1997 is as
    follows:
<TABLE>
<CAPTION>
                                                                                         1996               1997
---------------------------------------------------------------------------------------------------------------------------
                                                                                     No.     Amount     No.     Amount
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>   <C>          <C>   <C>       
    Real estate and other loans ................................................     40    $2,910,953   46    $3,810,868
    Percent of real estate and other loans......................................                  1.8%               1.7%   
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

    An  analysis of the  allowance  for loan losses for the years ended July 31,
    1995, 1996 and 1997 is as follows:
<TABLE>
<CAPTION>

                                                                                        1995        1996     1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>          <C>          <C>       
    Balance at beginning of year................................................ $1,713,590   $2,534,836   $3,073,158
    Provision charged to operations ............................................  1,376,404      664,221      961,217
    Charge-offs ................................................................ (1,405,337)    (429,341)    (699,263)
    Recoveries..................................................................    849,879      303,442       76,349
---------------------------------------------------------------------------------------------------------------------
    Balance at end of year...................................................... $2,534,836   $3,073,158   $3,411,461
---------------------------------------------------------------------------------------------------------------------
</TABLE>

    For the years ended July 31, 1995, 1996 and 1997, additional interest income
    before taxes amounting to approximately  $234,000,  $201,000,  and $256,000,
    respectively,  would have been  recognized if interest on non-accrual  loans
    had been  recorded  based on  original  terms.  The  Bank had  $645,184  and
    $650,172 of impaired loans at July 31, 1996, and 1997 as defined by SPAS 114
    and SPAS 118.

    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,
    primarily   fixed-rate  loans,  at  July  31,  1996  and  1997  amounted  to
    $13,295,000 and $6,104,000, respectively.

26
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    Note 9
    Real Estate Owned, Net

    Activity  in the  allowance  for losses on real  estate  owned for the years
    ended July 31, 1995, 1996 and 1997 is as follows:
<TABLE>
<CAPTION>
                                                                                      1995         1996       1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>         <C>          <C>     
    Balance at beginning of year................................................   $ 188,119   $        -   $      -
    Provision for losses........................................................     502,377      654,489     43,783
    Charge-offs, net............................................................    (690,496)    (654,489)   (43,783)
---------------------------------------------------------------------------------------------------------------------
    Balance at end of year......................................................   $       -   $        -   $      -   
---------------------------------------------------------------------------------------------------------------------
</TABLE>

    Net loss on real estate owned  activities for the years ended July 31, 1995,
    1996 and 1997 consists of the following:
<TABLE>
<CAPTION>

                                                                                      1995        1996        1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>         <C>          <C>     
    Provision for real estate owned losses......................................   $ 502,377   $ 654,489    $ 43,783
    Net loss on sale of real estate owned and related expenses..................     147,817     266,428     162,586
---------------------------------------------------------------------------------------------------------------------
                                                                                   $ 650,194   $ 920,917    $206,369
---------------------------------------------------------------------------------------------------------------------
</TABLE>

    Note 10
    Accrued Interest Receivable

    Accrued  interest  receivable  at July 31, 1996 and 1997,  is  summarized as
    follows:
<TABLE>
<CAPTION>
                                                                                       1996            1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>              <C>       
    Investment securities held to maturity......................................   $ 1,021,063      $  908,118
    Investment securities available for sale....................................       961,514         629,695
    Mortgage-backed securities held to maturity.................................       668,487         554,498
    Loans receivable............................................................       995,448       1,383,270
---------------------------------------------------------------------------------------------------------------------
                                                                                   $ 3,646,512      $3,475,581
---------------------------------------------------------------------------------------------------------------------
</TABLE>

    Note 11
    Office Properties and Equipment, net

    Office properties and equipment,  net, at July 31, 1996 and 1997 consists of
    the following:
<TABLE>
<CAPTION>
                                                                                       1996            1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>              <C>       
    Cost:
    Land.......................................................................    $   793,158      $  793,158
    Parking lot improvements....................................................        26,913          26,913
    Building and building improvements..........................................     3,600,269       3,609,574   
    Furniture and equipment.....................................................     1,290,631         985,907  
    Automobiles.................................................................       102,636          99,036  
---------------------------------------------------------------------------------------------------------------------
                                                                                     5,813,607       5,514,588
---------------------------------------------------------------------------------------------------------------------
    Less accumulated depreciation...............................................     1,630,968       1,486,648
---------------------------------------------------------------------------------------------------------------------
                                                                                   $ 4,182,639      $4,027,940
---------------------------------------------------------------------------------------------------------------------
</TABLE>

   Office  occupancy and  equipment  expense  includes  rentals for premises and
   equipment  of  $156,000,  $177,000  and $187,000 for the years ended July 31,
   1995, 1996 and 1997 respectively.

                                                                              27
<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Note 12
    Deposits

    Deposit balances at July 31, 1996 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
                                                     1996                                     1997
-----------------------------------------------------------------------------------------------------------------------
                                  Interest    Weighted                         Interest   Weighted
                                    Rate      average                            Rate     average
                                   Ranges      rate        Amount         %    Ranges       rate      Amount        %
-----------------------------------------------------------------------------------------------------------------------
    NOW accounts and money                                              
<S>                              <C>          <C>     <C>               <C>   <C>          <C>     <C>            <C> 
    market deposits...........    O - 2.85     1.86%   $ 69,588,989      19.6  0 - 2.35     1.67%   $ 79,149,736   21.3
    Savings deposits..........    0 - 2.85     2.38%     74,612,769      21.1  0 - 2.55     2.38%     75,966,675   20.5
    Certificates of deposit...    0 - 8        5.11%    210,045,012      59.3  0 - 8        5.17%    215,670,692   58.2
-----------------------------------------------------------------------------------------------------------------------
                                                       $354,246,770     100.0                       $370,787,103  100.0
-----------------------------------------------------------------------------------------------------------------------
</TABLE>                                                                
                                                                        
                                                                        
    Certificates   of  deposit   greater  than  $100,000   total   approximately
    $17,512,390 and $23,990,768 at July 31, 1996 and 1997, respectively.

    The  contractual  maturities of certificates of deposit at July 31, 1996 and
    1997 are as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                                 1996        1997
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>         <C>     
    Within one year.............................................................               $170,389    $189,026
    One to three years..........................................................                 35,069      24,046
    Thereafter..................................................................                  4,587       2,599
-------------------------------------------------------------------------------------------------------------------
                                                                                                $210,045   $215,671  
-------------------------------------------------------------------------------------------------------------------
</TABLE>

    lnterest  expense on deposits  for the years ended July 31,  1995,  1996 and
    1997 consists of the following:
<TABLE>
<CAPTION>
                                                                                     1995        1996        1997
-------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>          <C>          <C>        
    Certificates of deposit.................................................. $ 8,429,880  $10,880,983  $10,908,550
    Passbook and club accounts...............................................   2,695,257    2,384,500    2,262,469
    NOW and money market accounts ...........................................     818,459      798,812      816,493
-------------------------------------------------------------------------------------------------------------------
                                                                              $11,943,596  $14,064,295  $13,987,512
-------------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------


    Note 13
    Borrowings
    Borrowings at July 31, 1996 and 1997 consists of the following:
<TABLE>
<CAPTION>
                                                                                                       Interest
                                                                       1996             1997             Rate      Maturity
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>            <C>                     <C>      <C> 
    FHLB of New York Advance..................................... $ 10,000,000               -           5.44%     Aug. 22, 1996
    FHLB of New York Advance.....................................   10,000,000               -           5.44%     Aug. 26, 1996
    FHLB of New York Line of Credit..............................   14,000,000               -           6.00%     Aug.  1, 1996
    Reverse Repurchase Agreement.................................   18,384,015               -           5.60%     Aug.  8, 1996
    FHLB of New York Advance.....................................            -    $ 17,000,000           5.85%     Aug.  7, 1997
    FHLB of New York Advance.....................................            -      22,000,000           6.00%    Sept.  2, 1997
    FHLB of New York Line of Credit..............................            -      20,250,000           6.13%     Aug.  1, 1997
    Line of Credit...............................................            -       2,000,000           8.00%     Aug.  1, 1997
------------------------------------------------------------------------------------------------------------------------------------
                                                                  $ 52,384,015    $ 61,250,000
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    The line of credit and advances  from the Federal Home Loan Bank of New York
    ("FHLB")  are secured by stock in the FHLB of New York and a blanket  pledge
    over the Banks  agency  securities,  qualifying  loans  and  mortgage-backed
    securities.  At July 31,  1997,  the Bank had a  credit  line  available  of
    $57,000,000, from the Federal Home Loan Bank of New York.

    At July 31, 1997,  the Savings Bank had entered into a line of credit with 1
    major  national  broker/dealer  which  totaled $2 million.  During the years
    ended July 31, 1996 and 1997, the maximum  month-end  balance of the line of
    credit was $0 and $2 million,  respectively.  The average amount of the line
    of credit during the years ended July 31, 1996 and 1997 was $0 and $506,000.
    Interest  paid on the line of credit in the fiscal  1996 and 1997 was $0 and
    $47,556, respectively.

    Note 14
    Federal and State Income Taxes

    Income tax expense  (benefit)  for the years ended July 31,  1995,  1996 and
    1997 is comprised of the following:
<TABLE>
<CAPTION>
                                                                                         1995               1996             1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>               <C>               <C>       
    Current:
    Federal.....................................................................     $3,377,513        $ 3,582,788       $3,467,327
    State.......................................................................        512,000            529,418          368,550
------------------------------------------------------------------------------------------------------------------------------------
                                                                                     $3,889,513        $ 4,112,206        3,835,877
------------------------------------------------------------------------------------------------------------------------------------
    Deferred:
    Federal.....................................................................       (141,000)          (428,000)        (355,000)
    State.......................................................................        (13,000)           (38,000)         (32,000)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                       (154,000)          (466,000)        (387,000)
------------------------------------------------------------------------------------------------------------------------------------
    Total income tax expense....................................................     $3,735,513         $3,646,206       $3,448,877
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    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.  The Bank  prepares  and files its tax return on a calendar  year
    basis.  The Bank used the experience  method in preparing the Federal income
    tax return for calendar year 1995 and 1994.  The tax bad debt reserve method
    was repealed for tax

                                                                              29

<PAGE>

    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    years  beginning  after  1995.  As a result,  the Bank may no longer use the
    percentage of taxable income reserve  method.  A small thrift (one with $500
    million or less in assets) is allowed to use either the specific  charge-off
    method or the  "bank"  experience  method  of  Section  585 of the  Internal
    Revenue Code to compute its bad debt deduction.

    Upon  repeal,  the Bank 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  basis) over
    a six-year period.  If the Bank meets the residential loan requirement for a
    tax year  beginning in 1996 or 1997,  the  recapture of the reserves will be
    suspended for such tax year. Thus, the recapture can potentially be deferred
    for up to two years.

    The Bank has not  recognized  a  deferred  tax  liability  of  approximately
    $1,246,000  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 the Bank  expects that charges to the bad
    debt reserves,  other than the losses on loans or recomputations of bad debt
    deductions  resulting from operating loss  carrybacks to prior years,  would
    result in taxable income.  The Bank 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,  1995,  1996 and
    1997 is as follows:
<TABLE>
<CAPTION>
                                                                                     1995              1996              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>               <C>               <C>       
    Expected income tax expense.................................................  $3,410,248        $3,372,841        $3,233,362
    Dividends received deduction................................................     (52,263)          (88,246)          (56,711)
    State income taxes, net of Federal tax benefit..............................     377,920           324,336           222,123
    Amortization of goodwill and other, net.....................................      39,608            37,275            50,103
------------------------------------------------------------------------------------------------------------------------------------
    Total income tax expense....................................................  $3,735,513        $3,646,206        $3,448,877
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    The tax  effects  of  temporary  differences  that give rise to  significant
    portions of the deferred tax asset (liability) at July 31, 1996 and 1997 are
    as follows:
<TABLE>
<CAPTION>

                                                                                      1996               1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>               <C>       
    Deferred tax assets:
    Management recognition plan.................................................  $  216,000        $  172,000
    Allowance for loan losses...................................................   1,059,000         1,210,000
    Loan fees...................................................................      81,000            70,000
    Uncollected interest........................................................      93,000           111,000
    Accrued bonus...............................................................      65,000            76,000
    Goodwill ...................................................................     344,000           485,000
    Unrealized loss or securities available for sale............................   1,059,348                 -
    SERP expense................................................................      23,000            65,000
    Other.......................................................................           -            26,000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                  $2,940,348        $2,215,000   
------------------------------------------------------------------------------------------------------------------------------------
    Deferred tax liabilities:
    Intangible assets...........................................................     225,000           193,000
    Depreciation................................................................      85,000            94,000
    Other.......................................................................      53,000            23,000
    Unrealized gain on securities available for sale.............................          -         7,999,000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                     363,000         8,309,000
    Net deferred asset (liability)..............................................  $2,577,348      $ (6,094,000)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    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 assurance about the levels
    of future earnings.

30
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    Note 15
    Employee Benefit Plans

    Defined Benefit Plan

    The Bank 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 cost (benefit) for the years ended July 31, 1995,  1996 and 1997
    includes the following:
<TABLE>
<CAPTION>
                                                                                        1995               1996            1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>           <C>             <C>      
    Service cost - benefits earned during the period............................         $ 39,095      $  36,915       $  62,077
    Interest cost on projected benefit obligation...............................           35,103         38,638          46,041
    Return on plan assets.......................................................          (98,518)       (83,128)       (414,414)
    Net amortization and deferral...............................................            9,832        (45,089)        296,313
------------------------------------------------------------------------------------------------------------------------------------
    Total pension benefit.......................................................         ($14,488)     ($ 52,664)      ($ 9,983)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    The following table sets forth the plan's funded status at July 31, 1996 and
1997:
<TABLE>
<CAPTION>
                                                                                                            1996             1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                    <C>             <C>       
    Actuarial  present value of  obligations - accumulated  benefit
    obligation, including vested benefits of $519,641 and $640,793
    at July 31, 1996 and 1997, respectively ....................................                       $  527,475      $  675,093
    Projected benefit obligation................................................                          569,452         730,831
------------------------------------------------------------------------------------------------------------------------------------
    Plan assets at fair value ..................................................                        1,223,715       1,608,409
------------------------------------------------------------------------------------------------------------------------------------
    Plan assets in excess of projected benefit obligation.......................                       $  654,263      $  877,578
    Unrecognized net transition obligation......................................                          (68,187)        (59,663)
    Unrecognized prior service cost.............................................                          (40,748)        37,613)
    Unrecognized deferred loss..................................................                         (497,219)       (722,210)
------------------------------------------------------------------------------------------------------------------------------------
    Prepaid pension cost........................................................                       $   48,109      $   58,092
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    The weighted average discount rate used in determining the actuarial present
    value of the projected benefit  obligation was 6.5% in fiscal 1996 and 1997.
    The assumed long-term rate of return on plan assets was 7.25% in fiscal 1996
    and 1997, and the assumed rate of increase in future compensation levels was
    5.5% in fiscal 1996 and 1997.

    Supplemental Executive Retirement Plan ("SERP")

    During  fiscal year 1996,  the Bank  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
    $84,006 and $97,392 for the years ended July 31,1996 and 1997.

                                                                              31
<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Note 16
    Stock Benefit Plans

    Stock Option Plan:

    At July 31, 1997, the company has a stock-based  compensation plan, which is
    described  below.  The  Company  applies  APB  Opinion  No.  25 and  related
    interpretations  in accounting for its plan.  Accordingly,  no  compensation
    cost is recognized  for its fixed stock option plan. Had  compensation  cost
    for the Company's  fixed stock option plan been  determined  consistent with
    SPAS No. 123,  the  Company's  net income and  earnings per share would have
    been reduced to the pro forma amounts indicated below (in thousands,  except
    per share amounts):
<TABLE>
<CAPTION>
                                                                                   1996       1997
---------------------------------------------------------------------------------------------------
<S>                                                                             <C>         <C>   
    Net Income..............................As reported..................       $ 6,274     $6,061
                                            Pro forma....................         5,951      5,941
    Primary earnings per share..............As reported..................          1.13       1.20
                                            Pro forma....................          1.07       1.17
    Fully diluted earnings per share........As reported..................          1.13       1.20
                                            Pro forma....................          1.07       1.17
</TABLE>

    The fair value of each option  grant 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 0.75 percent for all years; expected volatility of 20 percent;  risk-free
    interest  rates of 5.48  percent and 6.34  percent.  The effects of applying
    SPAS 123 on the pro forma net income may not be representative of the effect
    on the pro forma  income for future  years.  

    The Bank adopted a stock option and incentive plan (Option  Plan).  Pursuant
    to the Option Plan,  stock options of 959,948  common  shares,  adjusted for
    stock  dividends and stock split 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 $7.28 to $14.75 per share.  All
    options have been  adjusted to reflect stock  dividends and stock split.  At
    July 31, 1997, 959,948 granted qualified stock options were outstanding, and
    none of the stock options granted were exercised during this period.

    A summary of the status of the  Company's  stock  option plan as of July 31,
    1995,  1996,  and 1997, and changes during the years ended on those dates is
    presented below:
<TABLE>
<CAPTION>
                                                                     Shares under   Weighted - avg.
                                                                        option      exercise price
---------------------------------------------------------------------------------------------------
<S>                                                                   <C>              <C>   
    Outstanding at July 31, 1994..............................        644,068          $ 3.76
    Grant in fiscal year ended July 31, 1995..................         79,860            5.64
    Expired unexercised in fiscal year ended July 31, 1995 ...              0            0.00
    Outstanding at July 31, 1995..............................        723,928            3.96
---------------------------------------------------------------------------------------------------
    Grant in fiscal year ended July 31, 1996..................        196,020            7.28
    Expired unexercised in fiscal year ended July 31, 1996 ...              0            0.00
    Outstanding at July 31, 1996..............................        919,948            4.67
---------------------------------------------------------------------------------------------------
    Grant in fiscal year ended July 31, 1997..................         40,000           12.33
    Expired unexercised in fiscal year ended July 31, 1997 ...              0            0.00
    Outstanding at July 31, 1997..............................        959,948          $ 4.99
---------------------------------------------------------------------------------------------------
</TABLE>

    32



<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    The following table summarizes  information about stock options  outstanding
    at July 31, 1997. No stock options were exercised during 1996 and 1997.
<TABLE>
<CAPTION>

                         Number             Weighted            Weighted
    Exercise           outstanding      average remaining        average
     Prices              7131/97        contractual life     exercise price
--------------------------------------------------------------------------------
<S> <C>                 <C>                <C>                 <C>   
     $ 3.76              644,068            6.4 years           $ 3.76
       5.64               79,860            7.3 years             5.64
       7.28              196,020            8.4 years             7.28
      12.07 - 14.75       40,000            9.5 years            12.33
--------------------------------------------------------------------------------
                         959,948                                $ 4.99
--------------------------------------------------------------------------------
</TABLE>

    Employee Stock Ownership Plan:

    The Bank  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 the Bank'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 $1,615,985. During the fiscal year
    ended July 31, 1997,  the ESOP Trust  purchased an additional  15,000 shares
    for $446,881.

    The Bank makes cash  contributions to the ESOP on an annual basis sufficient
    to enable the ESOP to make the required  loan  payments to the  unaffiliated
    lender.  Dividends  declared on ESOP shares are used to purchase  additional
    common shares of the Bank, for inclusion in the Plan, as Plan assets.

    The ESOP loan is a  reverse  repurchase  agreement,  with  interest  payable
    monthly and principal payable equal to the shares allocated.

    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.  The  Bank  accounts  for its ESOP in  accordance  with  Statement  of
    Position 93-6. Accordingly, the shares pledged as collateral are reported as
    deferred ESOP shares in the statement of financial  position.  As shares are
    released from collateral, the Bank reports compensation expense equal to the
    current market price of the shares,  and the shares become  outstanding  for
    earnings per share computations.

    Management Stock Bonus Plans:

    The Bank adopted an 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 220,000 shares of restricted stock were purchased
    on December 22, 1993, the conversion  date.  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  purchased in the  conversion  initially
    were   recorded   as  a  contra   equity   account   excluded   from  stock-
    holders'equity.  The Bank recognizes  compensation  expense in the amount of
    the fair market value of the common  stock at the grant 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  $305,800,  $319,522  and  $290,400  in  1995,  1996  and 1997,
    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.

    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 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 the Bank,  all
    allocated shares become unrestricted.

                                                                              33
<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

    Note 17
    Commitments and Contingencies

    At July 31, 1997,  the Bank was  obligated  under  non-cancelable  operating
    leases for premises and equipment as follows (in thousands):

----------------------------------------------
    1998............................$ 137,312
    1999............................  116,985
    2000............................   94,560
    2001............................   94,560
    Thereafter......................   39,400
----------------------------------------------

    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 the Bank's consolidated financial position.

    Note 18
    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, 1997,  that the Bank meets all capital
    adequacy requirements to which it is subject.

    As of July 31, 1997, 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
    table.
<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, 1996:
    Total capital (to risk-weighted assets).................  $ 41,540,507   19.3%     $ 17,211,156   8.0% $ 21,513,945  10.0%
    Tier 1 capital (to risk-weighted assets)................    33,200,112   15.4%        8,605,578   4.0%   12,908,367   6.0%
    Tier 1 capital (to average assets)......................    33,200,112    7.5%       17,630,520   4.0%   22,038,150   5.0%
------------------------------------------------------------------------------------------------------------------------------------
    As of July 31, 1997:
    Total capital (to risk-weighted assets).................  $ 45,129,304   17.0%     $ 21,245,864   8.0% $ 26,557,330  10.0%
    Tier 1 capital (to risk-weighted assets)................    36,120,761   13.6%       10,622,932   4.0%   15,934,398   6.0%
    Tier 1 capital (to average assets)......................    36,120,761    7.6%       19,107,837   4.0%   23,884,796   5.0%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
    
34
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------


    Note 19
    Stock Repurchase Program

    Lakeview  Financial  Corp. 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. The
    Bank has completed the repurchase of 1,932,450 shares as of July 31, 1997.

    Note 20
    Fair Value of Financial Instruments

    Accounting  Standards  No. 107,  "Disclosure  about Fair Value of  Financial
    Instruments" (SEAS 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
    instrument. Such estimates do not include any premium or discount that could
    result from  offering for sale at one time the Bank'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 the Bank 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, 1996 and 1997:

    Financial Assets:

    The  carrying  amount  of  cash  and  cash   equivalents  is  considered  to
    approximate  fair  value.  The fair values of  securities  held for sale and
    investment  securities 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.  Long term borrowing
    fair values are discounted  using rates available on borrowings with similar
    terms and maturities.

                                                                              35


<PAGE>
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 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, 1996 and 1997 are as follows:
<TABLE>
<CAPTION>
                                                                                    Carrying amount        Fair value
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                 <C>         
    1996:
    Financial assets:
    Cash and cash equivalents...................................................     $  6,902,040        $  6,902,040
    Investment securities held to maturity......................................       40,821,195          40,083,449
    Investment securities available for sale ...................................       89,967,424          89,967,424
    Mortgage-backed securities held to maturity................................       121,461,936         119,471,910
    Equity securities restricted ...............................................        7,806,358          19,942,272
    Loans receivable, net.......................................................      163,457,374         163,873,689
    Federal Home Loan Bank of New York stock................................            2,587,400           2,587,400
    Financial liabilities:
    Deposits ...................................................................      354,246,770         355,068,772
    Borrowings .................................................................       54,721,429          54,721,429
------------------------------------------------------------------------------------------------------------------------------------
    1997:
    Financial assets:
    Cash and cash equivalents...................................................     $  5,399,466        $  5,399,466
    Investment securities held to maturity......................................       42,681,799          41,934,692
    Investment securities available for sale ...................................      105,592,249         105,592,249
    Mortgage-backed securities held to maturity................................       102,248,545         102,343,945
    Loans receivable, net.......................................................      224,563,595         229,260,441
    Federal Home Loan Bank of New York stock....................................        3,550,000           3,550,000
    Financial liabilities:
    Deposits ...................................................................      370,787,103         374,661,012
    Borrowings..................................................................       63,603,825          63,603,825
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    Note 21
    Recent Accounting Pronouncements

    Statement of Financial  Accounting  Standards No. 128,  "Earnings per Share"
    ("SFAS 128") establishes standards for computing and presenting earnings per
    share (EPS) and  applies to  entities  with  publicly  held common  stock or
    potential  common stock.  SFAS 128 replaces the  presentation of primary EPS
    with a presentation of basic EPS and requires dual presentation of basic and
    diluted  EPS on the  face of the  income  statement  for all  entities  with
    complex capital  structures and requires a  reconciliation  of the numerator
    and   denominator  of  the  basic  EPS  computation  to  the  numerator  and
    denominator  of the  diluted  EPS  computation.  SFAS 128 is  effective  for
    financial  statements  issued for periods  ending  after  December 15, 1997,
    including interim periods; earlier application is not permitted and requires
    restatement of all prior-period EPS data presented.  If the Bank had adopted
    SFAS 128 basic EPS would have been $1.00,  $1.13,  and $1.20 for 1995, 1996,
    and  1997,  respectively.  Dilluted  EPS  would  have  been  the same as the
    earnings per share reported.

36
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    Statement   of   Financial   Accounting   Standards   No.  130,   "Reporting
    Comprehensive  Income ("SFAS 130")  establishes  standards for reporting and
    display of  comprehensive  income and its  components  (revenues,  expenses,
    gains, and losses) in a full set of general - purpose financial  statements.
    SFAS 130 requires  that all items that are required to be  recognized  under
    accounting  standards as components of comprehensive income be reported in a
    financial  statement  that is displayed  with the same  prominence  as other
    financial  statements.  SFAS 130 does not require a specific format for that
    financial  statement  but  requires  that an  enterprise  display  an amount
    representing  total  comprehensive  income for the period in that  financial
    statement.  SFAS 130 requires that an enterprise (a) classify items of other
    comprehensive  income  by their  nature  in a  financial  statement  and (b)
    display the accumulated  balance of other  comprehensive  income  separately
    from retained  earnings and additional paid in capital in the equity section
    of a statement of financial position. SFAS 130 is effective for fiscal years
    beginning after December 15, 1997.  Reclassification of financial statements
    for  earlier  periods   provided  for  comparative   purposes  is  required.
    Management  has  not  yet  determined  the  impact  of the  adoption  on its
    reporting of operations.

    Note 22
    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 Funds Act also  spreads the  obligations  for  payment of the  Financing
    Corporation  ("FICO")  bonds  across  all  SAIF and BIF  members.  Beginning
    January 1, 1997,  BIF deposits  will be assessed for FICO payments at a rate
    of 20% of the rate assessed on SAIF deposits.  BIF deposits will be assessed
    a FICO  payment  of 1.3  basis  points,  while  SAIF  deposits  will  pay an
    estimated  6.5 basis points on the FICO bonds.  Full pro rata sharing of the
    FICO  payments  between  BIF and SAIF  will be  merged  on  January  1, 1999
    provided no savings associations remain as of that time.

    As a  result  of the  Funds  Act,  and  recently  passed  legislation,  SAIF
    assessments were lowered to 0 to 27 basis points effective  January 1, 1997,
    a range  comparable  to that of BIF  members.  However,  SAIF  members  will
    continue to make the higher FICO payments described above. Management cannot
    predict the level of FDIC  insurance on whether the SAIF will  eventually be
    merged.  The Bank paid  $375,529,  $794,011 and $581,768 in Federal  deposit
    insurance  premiums for the fiscal years ended July 31, 1995, 1996 and 1997,
    respectively.

    Note 23
    Subsequent Event

    On September 10, 1997, Lakeview signed a definitive  agreement providing for
    the merger of Lakeview and Westwood  Corporation  ("Westwood"),  the holding
    company of  Westwood  Savings  Bank,  a New Jersey  Savings  Bank with total
    assets of $111  million  located in  Westwood  New  Jersey,  into  Lakeview.
    Lakeview will acquire 100% of the outstanding  stock of Westwood.  Shares of
    Westwood Common Stock will be exchanged for $29.25, payable in the aggregate
    in the form of 50% cash and 50% Lakeview Common Stock.  The number of shares
    of Lakeview  Common Stock to be exchanged for Westwood  Common Stock will be
    determined  based upon the average  market  price of Lakeview  Common  Stock
    during  the 15  trading  days  one  week  prior  to the  closing  date.  The
    transaction is subject to certain  contingencies  including  satisfaction of
    State and Federal  regulatory  approvals,  approval by the  shareholders  of
    Westwood and receipt of a fairness  opinion by Westwood.  It is  anticipated
    that the transaction  will occur in the first calendar  quarter of 1998. The
    transaction is expected to be accounted for under the purchase method.

    Note 24
    Parent Company Only

    At fiscal year end 1997,  Lakeview  Financial Corp. (Parent only), which was
    formed in  August  1994,  had three  subsidiaries:  Lakeview  Savings  Bank,
    Branchview,  Inc.,  and Lakeview  Mortgage  Depot,  Inc. The earnings of the
    subsidiaries are recognized by the Parent company using the equity method of
    accounting.  Accordingly,  earnings  of the  subsidiaries  are  recorded  as
    increases  in  the  Parent  Company's  investment  in the  subsidiaries  and
    dividends paid reduce the Parent company's  investment in the  subsidiaries.
    The following  information should be read in conjunction with other Notes to
    the Consolidated Financial Statements.


                                                                              37
<PAGE>

    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------

<TABLE>
<CAPTION>
    Condensed Statement of Financials (Parent Company Only)
    Condensed Balance Sheet                                                                             1996               1997
                                                                                ----------------------------------------------------
<S>                                                                                                 <C>              <C>        
    Assets
    Cash on hand and in banks...................................................                    $   244,371      $   167,943
    Investments in subsidiaries.................................................                     45,515,234       51,973,415
    Investment securities available for sale....................................                              -          720,000   
    Other assets................................................................                             75          297,128
------------------------------------------------------------------------------------------------------------------------------------
    Total assets................................................................                    $45,759,680      $53,158,486
------------------------------------------------------------------------------------------------------------------------------------
    Liabilities and Stockholders' Equity
    Borrowings..................................................................                              -        2,000,000
    Other Liabilities...........................................................                              -          832,306
    Stockholders' equity........................................................                     45,759,680       50,326,180
------------------------------------------------------------------------------------------------------------------------------------
    Total liabilities and Stockholders' equity..................................                    $45,759,680      $53,158,486
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
    Condensed Statement of Income
    Year ended July 31, 1995, 1996, and 1997                                             1995           1996               1997     
                                                                                ----------------------------------------------------
<S>                                                                                 <C>             <C>              <C>            
    Dividends from subsidiary...................................................    $  4,619,027    $ 7,650,404      $ 5,550,807    
    Other income................................................................          36,836              -           13,384  
----------------------------------------------------------------------------------------------------------------------------------
    Total income................................................................       4,655,863      7,650,404        5,564,191
    Interest expense............................................................               -              -           47,556
    Other expense...............................................................          17,431         34,957           60,846
----------------------------------------------------------------------------------------------------------------------------------
    Total expense...............................................................          17,431         34,957          108,402
    Net income before taxes.....................................................       4,638,432      7,615,447        5,455,789
    Taxes expense...............................................................           4,612          1,964          (11,674)
------------------------------------------------------------------------------------------------------------------------------------
    Undistributed income (loss) of subsidiary...................................       1,660,807     (1,339,569)         593,548
----------------------------------------------------------------------------------------------------------------------------------
    Net income................................................................. .   $  6,294,627    $ 6,273,914      $ 6,061,011
</TABLE>
<TABLE>
<CAPTION>
    Condensed Statement of Cash Flows
    Year ended July 31, 1995, 1996 and 1997                                              1995           1996               1997     
                                                                                ----------------------------------------------------
<S>                                                                                 <C>             <C>              <C>        
    Cash flows from operating activities:
    Net income..................................................................    $  6,294,627    $ 6,273,914      $ 6,061,011
    Adjustments to reconcile net income to net cash
    provided by operating activities
    Undistributed (income) loss from subsidiary.................................      (1,660,807)     1,339,569         (593,548)
    Investment in subsidiaries..................................................          99,997       (250,180)        (150,000)
    Change in other assets......................................................               -            (75)        (350,733)
    Change in other liabilities.................................................           4,574         (4,824)         832,306
----------------------------------------------------------------------------------------------------------------------------------
    Net cash provided by operating activity.....................................       4,738,391      7,358,404        5,799,036
----------------------------------------------------------------------------------------------------------------------------------
    Cash flows from investing activities:
    Purchase of treasury stock..................................................      (3,970,106)    (6,685,014)      (6,702,876)
    Purchase of investment securities available for sale........................               -              -         (585,600)
    Dividend paid...............................................................        (615,430)      (581,874)        (586,988)
------------------------------------------------------------------------------------------------------------------------------------
    Net cash used in investing activities.......................................      (4,585,536)    (7,266,888)      (7,875,464)
------------------------------------------------------------------------------------------------------------------------------------
    Cash flows from financing activities:
    Increase in borrowings......................................................               -              -        2,000,000
------------------------------------------------------------------------------------------------------------------------------------
    Net cash provided by financing activities...................................               -              -        2,000,000
------------------------------------------------------------------------------------------------------------------------------------
    Net change in cash and cash equivalents.....................................         152,855         91,516          (76,428)
    Cash and cash equivalents at beginning of period............................               -        152,855          244,371
------------------------------------------------------------------------------------------------------------------------------------
    Cash and cash equivalents at end of period..................................    $    152,855      $ 244,371       $  167,943
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

38
<PAGE>
                                      Building Value GRAPHICS OMITTED [CUBE [$]]
--------------------------------------------------------------------------------

    Note 25
    Quarterly Financial Data (Unaudited)

    The following  table contains  quarterly  financial data for the years ended
    July 31, 1996 and 1997 (dollars in thousands):
<TABLE>
<CAPTION>

                                                          First           Second           Third            Fourth
    Year Ended July 31, 1996                             Quarter          Quarter          Quarter          Quarter         Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>              <C>              <C>              <C>            <C>    
    Total Interest Income..............................   $7,482           $7,533           $7,697           $ 8,260        $30,972
    Total Interest Expense.............................    4,078            4,024            4,151             4,297         16,550
------------------------------------------------------------------------------------------------------------------------------------
    Net Interest Income Before Provision
    for Loan Losses....................................    3,404            3,509            3,546             3,963         14,422
    Provision for Loan Losses..........................      184              175              184               121            664
------------------------------------------------------------------------------------------------------------------------------------
    Net Interest Income After Provision
    for Loan Losses....................................    3,220            3,334            3,362             3,842         13,758
    Total Other Income.................................      968            1,708            1,697             2,657          7,030
    Total Other Expense................................    2,648            2,679            2,616             2,925         10,868
    Net Income Before Taxes............................    1,540            2,363            2,443             3,574          9,920
    Federal and State Income Taxes.....................      519              863              936             1,328          3,646
------------------------------------------------------------------------------------------------------------------------------------
    Net Income.........................................  $ 1,021          $ 1,500          $ 1,507           $ 2,246        $ 6,274
------------------------------------------------------------------------------------------------------------------------------------
    Earnings per share restated for stock split........  $  0.19          $  0.29          $  0.30           $  0.35         $ 1.13
</TABLE>
<TABLE>
<CAPTION>

                                                          First           Second           Third            Fourth
    Year Ended July 31, 1997                             Quarter          Quarter          Quarter          Quarter         Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>             <C>              <C>           <C>     
    Total Interest Income..............................  $ 8,058           $7,983         .$ 8,372          $ 8,429       $ 32,842
    Total Interest Expense.............................    4,209            4,357            4,312            4,440         17,318
------------------------------------------------------------------------------------------------------------------------------------
    Net Interest Income Before Provision                                                                                 
    for Loan Losses....................................    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
    Total Other Income.................................    1,614            3,166              972            2,350          8,102
    Total Other Expense................................    4,801            2,649            2,847            2,858         13,155
    Net Income Before Taxes............................      557            3,887            1,885            3,181          9,510
    Federal and State Income Taxes.....................      211            1,417              546            1,275          3,449
------------------------------------------------------------------------------------------------------------------------------------
    Net Income.........................................  $   346           $2,470          $ 1,339          $ 1,906        $ 6,061
------------------------------------------------------------------------------------------------------------------------------------
    Earnings per share restated for stock split........  $  0.06           $ 0.48          $  0.27          $  0.39        $  1.20
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                                                             
    39                                                                   
                                                                         
                                                                      
                                                                         
<PAGE>                                                                   
    [L, F, C CUBES GRAPHICS OMITTED] LAKEVIEW FINANCIAL CORP. 1997 ANNUAL REPORT
    ----------------------------------------------------------------------------
                                                                         
    Independent Auditors' Report                                         
                                                                         
    [KPMG LOGO] 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,  1996 and 1997,  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, 1997.
    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,  1996 and 1997,  and the
    results  of their  operations  and their cash flows for each of the years in
    the  three-year  period  ended July 31, 1997 in  conformity  with  generally
    accepted accounting principles.



                                        /s/KPMG Peat Marwick LLP



    Short Hills, New Jersey 
    September 4, 1997, except as to note 23, 
    which is as of September 10, 1997.

40