M CORP

                              ANNUAL REPORT

                                   2000

<PAGE>


                                  M CORP

                       AND CONSOLIDATED SUBSIDIARIES

                               ANNUAL REPORT



DESCRIPTION AND LINES OF BUSINESS

M Corp (sometimes referred to herein as the "Company") was incorporated in
1958 and operates as a financial holding company. The Company, through its
wholly or majority-owned subsidiaries is engaged in the title insurance
business and the ownership and rental of real properties.

Title Insurance - First Montana Title Insurance Company (FMTIC, a wholly-
owned subsidiary of TSI, Inc., a ninety-two percent owned subsidiary of the
Company) was organized in 1958. FMTIC issues title insurance policies through
its subsidiaries within the State of Montana only.

Real Estate Investments - The Company owns rental properties through its
majority-owned subsidiaries. The rental properties include one commercial
building, two apartment complexes with a total of thirty-three units and
several one to four unit residential properties. The Company's investments in
real estate are set forth in Note 13 (Investments In Real Estate) of the
Notes to Consolidated Financial Statements.


The Company operates in a competitive business environment. The Company is
not dependent upon one or a few major customers. Information concerning the
Company's industry segments is set forth in Note 14 (Information on Segments
of Business) of the Notes to Consolidated Financial Statements.


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

Title insurance premiums and related fees decreased $373,771 (21.6%) in 2000
as compared with 1999 due to a general decrease in the real estate economies
within which the Company operates and a decrease in revenues of one of the
Company's consolidated subsidiaries resulting from the pirating of key
employees by the competition.


                                    1

<PAGE>

                                  M CORP

                       AND CONSOLIDATED SUBSIDIARIES

                               ANNUAL REPORT


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


Interest revenues increased $221,986 (27.7%) in 2000 as compared with
1999 due primarily to an increase in interest-bearing deposits and an
increase in interest rates earned on such deposits.

Rent revenues decreased $53,576 (8.9%) in 2000 as compared with
1999 due primarily to an increase in vacancies.

Other income decreased $60,237 (15.8%) in 2000 as compared with 1999.
During 1999 the Company recognized net gains on the disposition of
investments in the total amount of $68,206 whereas such gains recognized
during 2000 amounted to $40,606. The decrease in gains recognized on the
disposition of investments from 1999 to 2000 was the primary reason for
the decrease in other income in 2000 as compared with 1999.

Salaries and other personnel costs decreased $163,559 (14.7%) in 2000 as
compared with 1999 due primarily to an decrease in the number of personnel
employed in the Company's operations.

The provision for depreciation increased $13,800 (12.4%) in 2000 as compared
with 1999 due primarily to property acquisitions during the last half of 1999
and during 2000.

Income tax expense decreased $51,000 (10.4%) in 2000 as compared with
1999 due primarily to the decrease in pre-tax income.

The Company is considering acquisitions which would deplete the Company's
available cash and thus affect the liquidity of the Company.



                                    2
<PAGE>

                                   M CORP

                        AND CONSOLIDATED SUBSIDIARIES

                              FINANCIAL REPORT

                              DECEMBER 31, 2000





                                 CONTENTS




                                                                     PAGE

   AUDITOR'S REPORT                                                    4


   CONSOLIDATED FINANCIAL STATEMENTS

      Balance Sheets as of December 31, 2000 and 1999                 5-6

      Statements of Income and Comprehensive Income
       for the Years Ended
       December 31, 2000 and 1999                                      7

      Statements of Stockholders' Equity
       for the Years Ended
       December 31, 2000 and 1999                                      8

      Statements of Cash Flows for the Years
       Ended December 31, 2000 and 1999                               9-10

      Notes to Consolidated Financial Statements                     11-18


   OTHER INFORMATION                                                   19


                                  3
<PAGE>

                      Report of Independent Auditors



To The Board of Directors
M Corp
Great Falls, MT  59405


We have audited the accompanying consolidated balance sheets of M Corp and
consolidated subsidiaries as of December 31, 2000 and 1999 and the related
consolidated statements of income and comprehensive income, stockholders'
equity and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit 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 audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of M Corp and consolidated subsidiaries as of December 31, 2000
and 1999 and the consolidated results of their operations and their
consolidated cash flows for the years then ended, in conformity with
generally accepted accounting principles.





DWYER & KEITH, CPA's, P.C.



March 16, 2001
Great Falls, Montana

                                    4
<PAGE>

                                  M CORP

                       AND CONSOLIDATED SUBSIDIARIES

                              BALANCE SHEETS

                        DECEMBER 31, 2000 and 1999

ASSETS                                                2000           1999
Current Assets
  Cash (Note 3)                                   $19,143,153    $18,106,054
  Investment Securities (Note 4)                    1,536,755      1,671,238
  Trade Accounts Receivable, Less
    Allowance for Doubtful Accounts of
    $16,500 in 2000 and $17,500 in 1999                48,211         69,940
  Prepaid Expenses                                     45,100         40,600
  Income Tax Prepayments                               17,492        272,942

        Total Current Assets                       20,790,711     20,160,774

Other Assets
  Noncurrent Investments (Note 4)                     105,000        105,000
  Other Investments (Note 4)                        6,366,705      4,613,891

         Total Other Assets                         6,471,705      4,718,891

Investments In Property, Plant and
  Equipment, at Cost (Notes 1 and 13)
   Buildings                                        2,172,467      2,160,146
   Furniture, Fixtures and Equipment                  524,066        561,705

                                                    2,696,533      2,721,851
      Less Accumulated Depreciation                (2,035,013)    (1,975,398)
                                                      671,520        746,453

Title Plants                                          201,113        201,113
Land                                                   83,434         83,434

  Net Property, Plant and Equipment                   946,067      1,031,000

                                                  $28,208,483    $25,910,665


                 See Notes to Consolidated Financial Statements.

                                       5
<PAGE>

                                     M CORP

                          AND CONSOLIDATED SUBSIDIARIES

                                 BALANCE SHEETS

                           DECEMBER 31, 2000 and 1999


                                                    2000              1999
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
 Accounts Payable                              $   144,700       $   117,505
 Accrued Liabilities (Note 5)                      115,472           125,511
 Dividends Payable                                  54,415           194,223
 Deferred Income Taxes (Notes 1 and 7)             167,900           244,500

    Total Current Liabilities                      482,487           681,739



Provision for Estimated Title and
 Escrow Losses (Note 8)                            883,067           923,531

Minority Interests in Consolidated
 Subsidiaries                                    2,391,904         2,274,104

Deferred Income Taxes (Notes 1 and 7)            1,031,600           273,700

Excess of Fair Value of Net Assets Acquired
 Over Cost (Note 1)                                 32,195            40,415

                                                 4,338,766         3,511,750

Commitments (Note 9)

Stockholders' Equity (Notes 1, 4, 10  and 11)
  Common Stock, $1.00 Par Value,
    5,000,000 shares authorized,
    3,750,295 shares issued                      3,750,295         3,750,295
  Capital Surplus                               19,266,853        18,266,853
  Retained Earnings (Note 10)                      931,827         1,106,197
  Accumulated Other
     Comprehensive Income (Note 4)               1,822,789           969,175
  Less: Cost of Common Shares in Treasury
        2,185,495 Shares in 2000 and
        2,184,546 Shares in 1999                (2,384,534)       (2,375,344)

   Total Stockholders' Equity                   23,387,230        21,717,176

                                               $28,208,483       $25,910,665


                See Notes to Consolidated Financial Statements.

                                   6
<PAGE>

                                 M CORP

                       AND CONSOLIDATED SUBSIDIARIES

              STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

              FOR THE YEARS ENDED DECEMBER 31, 2000 and 1999


                                                    2000              1999
Revenue
 Title Insurance Premiums and Related Fees     $ 1,355,565       $ 1,729,336
 Interest                                        1,022,025           800,039
 Rent                                              547,716           601,292
 Other (Note 6)                                    320,167           380,404

                                                 3,245,473         3,511,071

Operating Expenses
 Salaries and Other Personnel Costs                947,640         1,111,199
 Depreciation                                      124,945           111,145
 Rent                                               50,643            50,691
 Title and Escrow Losses                             3,815             4,129
 Interest                                             -                   12
 Other General and Administrative Expenses         784,078           749,238

                                                 1,911,121         2,026,414

         Operating Income                        1,334,352         1,484,657

Minority Share of Consolidated Subsidiaries
 Net (Income)                                      (52,765)          (61,376)

Income Before Income Taxes                       1,281,587         1,423,281

Income Taxes (Note 7)                             (439,000)         (490,000)

         Net Income                                842,587           933,281

Other Comprehensive Income (Loss),
   Net of Income Taxes:
   Unrealized Holding Gains (Losses):
   Gain (Loss) Arising During Year                 843,597          (464,709)
   Reclassification Adjustment                      10,017             4,428

           Other Comprehensive Income (Loss)       853,614          (460,281)

           Comprehensive Income                $ 1,696,201       $   473,000



                See Notes to Consolidated Financial Statements.

                                        7
<PAGE>

                                      M CORP

                           AND CONSOLIDATED SUBSIDIARIES

                        STATEMENTS OF STOCKHOLDERS' EQUITY

                  FOR THE YEARS ENDED DECEMBER 31, 2000 and 1999

<TABLE>

                                                                   Accumulated
                                                                      Other
                             Common      Capital        Retained  Comprehensive      Treasury
                             Stock       Surplus        Earnings      Income           Stock        Total
<S>                        <C>          <C>            <C>          <C>            <C>            <C>

Balances, January 1, 1999  $3,750,905   $16,267,463    $2,329,646   $1,429,456     $(2,366,344)   $21,411,126

Net Income                                                933,281                                     933,281

Purchase Treasury Stock                                                                 (9,000)        (9,000)

Dividends Paid                                           (156,730)                                   (156,730)

Rescission of Capital
   Stock Issuance                (610)         (610)                                                   (1,220)

Recapitalization (Note 11)                2,000,000    (2,000,000)

Change in Net Unrealized
  Holding Gains                                                       (460,281)                      (460,281)

Balances, December
  31, 1999                  3,750,295    18,266,853     1,106,197      969,175      (2,375,344)    21,717,176

Net Income                                                842,587                                     842,587

Purchase Treasury Stock                                                                 (9,190)        (9,190)

Dividends Paid                                            (16,957)                                    (16,957)

Recapitalization (Note 11)                1,000,000    (1,000,000)

Change in Net Unrealized
   Holding Gains                                                       853,614                        853,614

Balances, December
  31, 2000                 $3,750,295   $19,266,853    $  931,827   $1,822,789     $(2,384,534)   $23,387,230

</TABLE>


                     See Notes to Consolidated Financial Statements.

                                         8

<PAGE>


                                     M CORP

                          AND CONSOLIDATED SUBSIDIARIES

                            STATEMENTS OF CASH FLOWS

                  FOR THE YEARS ENDED DECEMBER 31, 2000 and 1999

                           INCREASE (DECREASE) IN CASH


                                                       2000          1999
CASH FLOWS FROM OPERATING ACTIVITIES:
 Cash Received From Customers                      $ 1,923,888   $ 2,309,349
 Cash Paid to Suppliers and Employees               (1,812,862)   (2,008,939)
 Interest and Dividends Received in Cash             1,293,367     1,055,360
 Cash Proceeds From Sales of Noncurrent Assets            -           49,750
 Interest Paid in Cash                                    -              (12)
 Income Taxes Paid in Cash                            (137,550)     (761,800)

Net Cash Provided By Operating Activities            1,266,843       643,708

CASH FLOWS FROM INVESTING ACTIVITIES:
 Cash Proceeds From Sales and Redemptions
    of Property, Plant and Equipment                     4,990          -
 Cash Purchases of Minority Interests                   (5,229)       (4,851)
 Capital Expenditures Paid in Cash                     (45,002)     (173,590)
 Cash Received on Dispositions of
  Current Investments                                  137,056       200,243
 Cash Purchases of Current Investments                (155,604)      (94,983)

Net Cash (Used) By Investing Activities                (63,789)      (73,181)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Dividends Paid in Cash                               (156,765)     (385,625)
 Purchase Treasury Stock                                (9,190)       (9,000)
 Rescission of Common Stock Issuance                      -           (1,220)

Net Cash (Used) By Financing Activities               (165,955)     (395,845)

     NET INCREASE IN CASH                            1,037,099       174,682

     CASH - BEGINNING OF YEAR                       18,106,054    17,931,372

     CASH - END OF YEAR                            $19,143,153   $18,106,054

                                   (Continued)

                                        9

<PAGE>

                                     M CORP

                         AND CONSOLIDATED SUBSIDIARIES

                      STATEMENTS OF CASH FLOWS - Continued

                 FOR THE YEARS ENDED DECEMBER 31, 2000 and 1999

                RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
                            BY OPERATING ACTIVITIES



                                                     2000            1999

Net Income                                       $   842,587     $   933,281

Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities:
  Depreciation                                       124,945         111,145
  Provision for Doubtful Account Receivable             (784)         27,349
  Minority Share of Consolidated
    Subsidiaries Net Income                           52,765          61,376
  Amortization of Deferred Credit                     (8,220)         (8,220)
  Net Book Value of Assets Sold                         -              1,093
  Realized (Gains) on Dispositions
     of Investments                                  (40,606)        (68,206)

  Changes in Operating Assets and Liabilities
    (Increase) Decrease in Accounts Receivable        22,514         (20,134)
    (Increase) in Prepaid Expenses                    (4,500)        (12,300)
    (Increase) Decrease in Income Tax Prepayments    255,450        (272,942)
    (Decrease) in Payables and
       Accrued Liabilities                           (23,308)       (109,876)
    Decrease in Deferred Income Taxes                 46,000          45,000
    (Decrease) in Income Taxes Payable                  -            (43,858)

NET CASH PROVIDED BY OPERATING ACTIVITIES        $ 1,266,843     $   643,708


                See Notes to Consolidated Financial Statements.

                                   10
<PAGE>

                                 M CORP

                      AND CONSOLIDATED SUBSIDIARIES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly and majority owned subsidiaries. All significant intercompany
transactions and balances have been eliminated in consolidation.

(b) Title Insurance Income and Related Fees

The Company follows the practice of recording title insurance premiums as
income upon the issuance of the title insurance policy or the collection of
payment for the title insurance preliminary commitment, whichever occurs
first. All other fees and charges are recognized as income upon the rendering
of services.

(c) Excess of Fair Value of Net Assets of Acquired Subsidiaries Over
    Cost

The excess of fair value of the net assets of acquired subsidiaries over cost
is amortized over a twenty year period using the straight-line method.

(d) Depreciation and Amortization

Property, plant and equipment is comprised of furniture and fixtures,
buildings, title plants and land. Furniture and fixtures are carried at cost.
Depreciation is computed over recovery periods of three to ten years using
declining balance methods with a mid-quarter convention. Buildings and
building improvements are carried at cost. Depreciation is computed over
recovery periods of ten to twenty-seven and one-half years using the
straight line method with a mid-month convention. Title plants and land
are carried at cost and are not depreciated.

(e) Income Taxes

The Company follows the practice of recording deferred income taxes resulting
from timing differences between financial reporting and income tax reporting.
The Company does not provide for deferred income taxes resulting from the
undistributed earnings of subsidiary companies included in the consolidated
statements of income because the companies file consolidated federal income
tax returns and therefore any dividends paid to the Company are nontaxable.
Investment tax credits are recorded as a reduction of the provision for
federal income taxes in the year utilized.


                                     11

<PAGE>
                                   M CORP

                        AND CONSOLIDATED SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

(f) Fiduciary Assets and Liabilities

The assets and liabilities of the escrows administered by the Company are not
included in the consolidated balance sheet.

(g) Policy of Cash Equivalents

For purposes of the statements of cash flows, cash equivalents include time
deposits, certificates of deposit and money market accounts, all with
original maturities of three months or less.

(h) Retirement Plans

The Company adopted an employees' savings plan under Section 401(k) of the
Internal Revenue Code (the "Code") during 1998. The Company allows eligible
employees to contribute the maximum percentage of their compensation allowed
by the Code. The Company matches employee contributions in an amount
equal to fifty percent of the first six percent of the employee's
compensation up to a maximum of $1,080. Participants are at all times fully
vested in their contributions and are gradually vested in the Company's
contributions. The Company's 401(k) contributions and administrative costs
were $9,506 and $9,918 for 2000 and 1999, respectively.

(i) Reclassifications

Certain reclassifications have been made to the prior year amounts to make
them comparable to the 2000 presentation. These changes had no impact on
previously reported results of operations or shareholders' equity.


2.  NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES

The Company is engaged in the title insurance business within the state of
Montana, in  the  title insurance agency business in Yellowstone, Rosebud
and Cascade Counties, Montana and in the ownership and rental of properties
located primarily in Montana. The Company's primary business, based on
revenues, is title insurance. The process of preparing financial statements
in conformity with generally accepted accounting principles requires the
use of estimates and assumptions that affect the reported amounts of certain
types of assets, liabilities, revenues and expenses. Such estimates
primarily relate to unsettled transactions and events as of the date of
the financial statements. Actual results could differ from those estimates.



                                  12
<PAGE>

                                M CORP

                     AND CONSOLIDATED SUBSIDIARIES

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


2. NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES - Continued

As the Company's operations are conducted almost exclusively within the
State of Montana, items and/or events affecting the economy within the
State of Montana could adversely affect the Company and the Company's
operations.


3. CASH BALANCES

The Company maintains accounts with various financial institutions and stock
brokerage firms. Cash balances are insured up to $100,000 by either the
Securities Investor Protection Corporation ("SIPC") or the Federal Deposit
Insurance Corporation ("FDIC"). At December 31, 2000, cash balances totaling
$16,481,775 were uninsured by either the SIPC or the FDIC.


4. INVESTMENT SECURITIES AND OTHER INVESTMENTS

The Company adopted Statement of Financial Accounting Standards No. 115
("SFAS No. 115"), "Accounting For Investments in Certain Debt and Equity
Securities" effective January 1, 1994. In accordance with SFAS No. 115, the
Company has classified all of its current and other investments as available
for sale. Following is a summary of the Company's investments:

                                                        2000         1999
    Current Assets
    Cost                                           $ 1,174,805   $ 1,115,651
    Gross Unrealized Holding Gains                     374,208       558,426
    Gross Unrealized Holding Losses                    (12,258)       (2,839)

    Fair Value                                     $ 1,536,755   $ 1,671,238

    Other (Noncurrent) Assets
    Cost                                           $ 3,385,128   $ 3,385,128
    Gross Unrealized Holding Gains                   2,981,577     1,228,763

    Fair Value                                     $ 6,366,705   $ 4,613,891

Realized gains and losses are determined on the basis of specific
identification. During 2000 and 1999, sales proceeds and gross realized
gains and losses were as follows:


                                                        2000         1999

    Sales Proceeds                                 $   137,057   $   200,243

    Gross Realized Gains                           $    68,585   $    76,305

    Gross Realized Losses                          $    27,979   $     8,099



                                     13
<PAGE>


                                  M CORP

                       AND CONSOLIDATED SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


4.  INVESTMENT SECURITIES AND OTHER INVESTMENTS - Continued


Comprehensive income at December 31, 2000  increased to $1,822,789,
the difference between the total net unrealized gain at December 31, 2000
and deferred income taxes and minority interests in the net unrealized gain.
Other noncurrent investments totaling $105,000 at December 31, 2000
consist of certificates of deposit which are on deposit with the State of
Montana Commissioner of Insurance and are restricted as to use by law.
Glacier Bancorp, Inc. merged with WesterFed Financial Corporation during the
first quarter of 2001. Pursuant to the terms of the agreement subsidiaries
of the Company, received approsimately $6,526,600 in exchange for all of
their holdings in WesterFed Financial Corporation resulting in a net gain of
approximately $2,851,038 after deducting a fee of 7 per cent of gross
proceeds to Jefferson Management Company, a company controlled by the
controlling shareholder group.

5.  ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31,:

                                                        2000          1999

    Property Taxes                                $    44,926   $    44,479
    Compensation                                       47,915        53,763
    Payroll Taxes                                        -            2,731
    Other                                              22,631        24,538

                                                  $   115,472   $   125,511


6.  OTHER INCOME

Other income consists of the following:

                                                        2000          1999

    Dividends                                     $   271,341   $   255,321
    Gain on Sales of Securities                        40,606        68,206
    Gain on Sale of Real Property                        -           48,657
    Amortization of Deferred Credit                     8,220         8,220

                                                  $   320,167   $   380,404

7.  INCOME TAXES

Income tax expense consists of the following:

                                                        2000          1999

Currently Payable                                 $   393,000   $   445,000

Deferred                                               46,000        45,000

                                                  $   439,000   $   490,000




The income tax expense reflected in the financial statements differs
from the amounts that would normally be expected by applying the U.S.


                                   14

<PAGE>

                                 M CORP

                     AND CONSOLIDATED SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

7.   INCOME TAXES - Continued

Federal income tax rates to income before income taxes. The reasons for
the differences are as follows:

                                                        2000          1999

    Computed "Expected" Tax Expense               $   435,700   $   483,900
    Purchase Accounting Adjustments                    (4,500)       (4,600)
    Minority Interest in Subsidiaries' Income          17,900        20,900
    Dividends Received Deduction                      (64,600)      (60,800)
    State Income Taxes                                 48,200        45,500
    Other                                               6,300         5,100

                                                  $   439,000   $   490,000


Deferred income taxes result from timing differences in the recognition of
income and expense for tax and financial reporting purposes. The sources and
tax effects of these timing differences are as follows:

                                                        2000          1999

    Allowance for doubtful accounts               $     5,600   $     6,000
    Excess of income tax depreciation
      over financial reporting depreciation           (17,200)      (14,900)
    Contribution Deduction Carryover                   67,700       111,000
    Unrealized Gains on Investments                (1,362,500)     (727,200)
    Excess of financial reporting
      reserves for title and escrow
      losses over income tax reporting
      for title and escrow losses                     106,900       106,900

                                                  $(1,199,500)  $  (518,200)


The amounts of deferred tax assets and liabilities as of December 31,
are as follows:

                                                        2000          1999

Deferred Tax Asset, Net of Valuation
  Allowance of $0 in 2000 and 1999                $      -      $      -


Deferred Tax Liability                            $ 1,199,500   $   518,200



8.   PROVISION FOR ESTIMATED TITLE AND ESCROW LOSSES

The Company's subsidiary, First Montana Title Insurance Company (FMTIC,
wholly owned by TSI, Inc.) issues title insurance policies in the State of
Montana. The terms of policies issued are indefinite and premiums are



                                      15

<PAGE>

                                    M CORP

                         AND CONSOLIDATED SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


8.   PROVISION FOR ESTIMATED TITLE AND ESCROW LOSSES - Continued

not refundable. FMTIC is a party to various lawsuits wherein, among other
things, plaintiffs generally claim defects in insured titles, unreported
liens or improper practices. FMTIC is also required under many of its
policies issued to provide defense for its insureds in litigation founded
upon alleged defects or other matters insured against by the policy. Such
litigation and claims are normal occurrences within the title insurance
industry. In accordance with generally accepted accounting practices, FMTIC
has established a provision for estimated title and escrow losses which
appears on the consolidated balance sheets under the same title. FMTIC has
established the provision for estimated losses on (1) claims known to FMTIC
and (2) claims unknown to FMTIC but incurred upon issuance of policies as
well as for estimated external settlement expenses to be incurred. The
provision has been reduced for estimated recoveries.


9.   COMMITMENTS

The Company and its subsidiaries are obligated under various lease
agreements for office space expiring at various dates through 2002.
Rental expense for office space for the years ended December 31, 2000 and
1999, was $46,104 and $45,690, respectively. Annual rental commitments for
the ensuing calendar years are as follows: calendar year 2001 - $38,400 and
calendar year 2002 - $38,400.


10.  DIVIDEND RESTRICTIONS

M Corp, the parent company, depends in part upon cash dividends from its
subsidiaries for the funding of its cash requirements. Dividends paid by
First Montana Title Insurance Company (FMTIC), the parent company's lower
tier subsidiary, are restricted by statutes of the State of Montana. FMTIC
is required to obtain regulatory approval before making any dividend
distributions. At December 31, 2000, substantially all retained earnings
were subject to such restrictions. At December 31, 2000, FMTIC's statutory
capital and surplus as regards policyholders amounted to $9,693,766.



11. RECAPITALIZATION

During 2000 and 1999, portions of retained earnings were recapitalized as
capital surplus. The recapitalizations had no effect on total stockholders'
equity.


12. RELATED PARTY TRANSACTIONS

During the first quarter of 2001, a subsidiary of the Company loaned
$200,000 to a corporation controlled by a relative of the controlling
shareholder group. The loan was repaid in full soon after it was made
during the first quarter of 2001.



                                       16

<PAGE>


                                   M CORP

                         AND CONSOLIDATED SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


<TABLE>
<CAPTION>

13. INVESTMENTS IN REAL ESTATE

The Company is the lessor of property under operating leases expiring in
calendar year 2000. There are no minimum future rentals to be received on
non-cancelable leases as of December 31, 2000 and the consolidated statements
of income do not contain any contingent rental income. Following is a summary
of the Company's investments in real estate.


                                     GROSS AMOUNT CARRIED
                      DATE             ON BALANCE SHEET          ACCUMULATED    AMOUNT OF
DESCRIPTION         ACQUIRED    LAND      BUILDINGS    TOTAL    DEPRECIATION  ENCUMBRANCE

<S>                   <C>     <C>        <C>         <C>         <C>           <C>
December 31, 2000

Commercial Building
 Helena, Montana      1966    $  23,037  $  332,615  $  355,652  $  321,657    $     --

Apartment Complex
 Polson, Montana      1983       23,037     299,850     322,887     287,627    $     --

Apartment Complex
 Great Falls, Montana 1974       10,252     217,243     227,495     217,243    $     --
Other Rental Units    Var.         -      1,162,959   1,162,959     577,441    $     --

Buildings Occupied
 By the Company and
 Miscellaneous
 Properties           Var.       27,108     159,800     186,908     149,136    $     --

                              $  83,434  $2,172,467  $2,255,901  $1,553,104    $     --


December 31, 1999:

Commercial Building
 Helena, Montana      1966    $  23,037  $  320,294  $  343,331  $  317,290    $     --

Apartment Complex
 Polson, Montana      1983       23,037     299,850     322,887     285,256    $     --

Apartment Complex
 Great Falls, Montana 1974       10,252     217,243     227,495     217,243    $     --

Other Rental Units    Var.         -      1,162,959   1,162,959     522,791          --

Buildings Occupied
 By the Company and
 Miscellaneous
 Properties           Var.       27,108     159,800     186,908     148,015    $     --

                              $  83,434  $2,160,146  $2,243,580  $1,490,595    $     --

</TABLE>
                                       17
<PAGE>

                                    M CORP
                         AND CONSOLIDATED SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -Continued

<TABLE>
<CAPTION>
14. INFORMATION ON SEGMENTS OF BUSINESS

The Company's operations are classified into three reportable segments that
provide different products or services. The Company's reportable segments,
the title insurance business, ownership and rental of properties and
financial holding company are managed separately because of their differing
operations, customers and requirements. The Company's accounting policies for
segments are the same as those described in the summary of significant
accounting policies. Management evaluates segment performance based on
segment profit or loss before income taxes. Substantially all of the
Company's business is conducted within the state of Montana.


                       Sales to                       Segment          Total Net                      Expenditures
                        Outside         Interest     Operating           Segment      Depreciation     For Segment
                       Concerns         Revenues       Profit            Assets         Expense          Assets
<S>                    <C>            <C>          <C>              <C>                <C>               <C>
Year Ended
 December 31, 2000

Financial Holding
   Company             $   152,136    $   443,925  $    517,099     $ 12,542,444       $      289        $    -

Title Insurance
   Operations            1,523,596        588,100       610,160       14,839,077           32,275            6,900

Rental Properties          547,716           -          207,093          826,962           92,381           38,102

Consolidated           $ 2,223,448    $ 1,032,025   $ 1,334,352     $ 28,208,483       $  124,945        $  45,002



Year Ended
 December 31, 1999

Financial Holding
   Company             $   416,097    $   152,996   $   544,440     $ 11,444,536       $    1,734        $  17,860

Title Insurance
   Operations            1,892,390        448,296       651,367       13,655,312           42,600           49,783

Rental Properties          601,292           -          288,850          810,817           66,811          105,947

Consolidated           $ 2,909,779    $   601,292   $ 1,484,657     $ 25,910,665       $  111,145        $ 173,590

</TABLE>

                                   18

<PAGE>
                                 M CORP

                      AND CONSOLIDATED SUBSIDIARIES

                         DIRECTORS AND OFFICERS




        NAME                              OCCUPATION

   S. M. McCann                 Attorney at Law, Business Owner,
   Director and                 Investor
   President                    San Luis Obispo, California


   R. Bruce Robson              Data Processing Manager,
   Director                     Sletten Construction Co.
                                Great Falls, Montana


   A. M. McCann                 Investor
   Director                     Clearwater, Florida





                              MARKET INFORMATION


  The Company's common stock is not traded on any securities exchange, nor
  are there records kept of any quotations by securities dealers or Pink
  Sheets LLC. To the best knowledge of the Company, bid and asked quotations
  for the Company's common stock are not reported in any newspapers.

  A dividend of $.10 per share was declared on December 29, 2000, payable
  to shareholder's of record on December 31, 2000 to be paid on or before
  March 15, 2001. A dividend of $.10 per share was declared on December 29,
  1999, payable to shareholder's of record on December 31, 1999, to be paid
  on or before March 15, 2000.

  There are approximately 735 holders of record of the Company's common
  stock.

  A copy of the Form 10-KSB Annual Report may be obtained upon written
  request to the Company.



                                    M Corp
                                 P.O. Box 2249
                            110 Second Street South
                          Great Falls, MT  59403-2249
                                 406-727-2600

                                     19

<PAGE>