<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934

       For the quarterly period ended December 31, 1998

                                       or

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934

       For the transition period from             to
                                      ------------   -------------


                         COMMISSION FILE NUMBER 0-20006


                          ANCHOR BANCORP WISCONSIN INC.
                          -----------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


          Wisconsin                                      39-1726871
          ---------                                      ----------
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

       25 West Main Street
        Madison, Wisconsin                                 53703
        ------------------                               ---------
(Address of principal executive office)                  (Zip Code)


                                 (608) 252-8700
                                 --------------
               Registrant's telephone number, including area code

                                 Not Applicable
                                 --------------
              (Former name, former address, and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X]     No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                      Class: Common stock -- $.10 Par Value


         Number of shares outstanding as of January 31, 1999: 17,984,293



<PAGE>   2



                          ANCHOR BANCORP WISCONSIN INC.
                                INDEX - FORM 10-Q


PART I - FINANCIAL INFORMATION                                          PAGE #
                                                                        ------


         Item 1       Financial Statements (Unaudited)

                            Consolidated Balance Sheets as of
                            December 31, 1998 and March 31, 1998            2

                            Consolidated Statements of Income for the
                            Three and Nine Months Ended December
                            31, 1998 and 1997                               3

                            Consolidated Statements of Cash Flows for
                            the Nine Months Ended December 31, 
                            1998 and 1997                                   4

                            Notes to Unaudited Consolidated
                            Financial Statements                            6

         Item 2       Management's Discussion and Analysis of Financial 
                                Condition and Results of Operations

                            Results of Operations                          10

                            Financial Condition                            15

                            Asset Quality                                  17

                            Liquidity & Capital Resources                  20

                            Asset/Liability Management                     22

         Item 3       Quantitative and Qualitative Disclosures 
                                About Market Risk                          24


PART II - OTHER INFORMATION

         Item 1       Legal Proceedings                                    24
         Item 2       Changes in Securities                                24
         Item 3       Defaults upon Senior Securities                      24
         Item 4       Submission of Matters to Vote of Security Holders    24
         Item 5       Other Information                                    24
         Item 6       Exhibits and Reports on Form 8-K                     24

SIGNATURES                                                                 25

<PAGE>   3
                          CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                    DECEMBER 31,     MARCH 31,
                                                       1998            1998
                                                    ---------------------------
                                                           (In Thousands)
<S>                                                 <C>             <C>
ASSETS
Cash                                                $    30,802     $    31,999
Interest-bearing deposits                                 1,265           7,168
                                                      ---------     -----------
  Cash and cash equivalents                              32,067          39,167
Investment securities available for sale                 25,623          39,555
Investment securities held to maturity 
  (fair value of $8,100 and $17,600, respectively)        8,104          17,587
Mortgage-related securities available for sale           53,649          67,526
Mortgage-related securities held to maturity 
  (fair value of $180,800 and $128,100, 
  respectively)                                         179,079         127,239
Loans receivable, net:
  Held for sale                                          22,381          18,060
  Held for investment                                 1,698,609       1,591,089
Foreclosed properties and repossessed assets, net         2,487           4,723
Real estate held for development and sale                28,924          22,630
Office properties and equipment                          18,272          18,640
Federal Home Loan Bank stock--at cost                    22,177          22,002
Accrued interest on investments and loans                14,380          13,875
Prepaid expenses and other assets                        17,709          17,214
                                                    -----------     -----------
     Total assets                                   $ 2,123,461     $ 1,999,307
                                                    ===========     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits                                            $ 1,497,715     $ 1,392,472
Federal Home Loan Bank and other borrowings             449,345         411,625
Reverse repurchase agreements                            24,095          42,935
Advance payments by borrowers for taxes 
  and insurance                                           1,074           6,955
Other liabilities                                        15,066          17,369
                                                     ----------     -----------
     Total liabilities                                1,987,295       1,871,356

Preferred stock, $.10 par value, 5,000,000 shares
 authorized, none outstanding                                 -               -
Common stock, $.10 par value, 30,000,000 shares
 authorized, 24,998,648 shares issued                     2,500           2,500
Additional paid-in capital                               50,673          49,084
Retained earnings                                       134,205         125,615
Less:   Treasury stock (7,098,556 shares 
               and 7,073,460 shares,
               respectively), at cost                   (48,532)        (47,959)
        Borrowings of Employee Stock Ownership Plan      (1,379)         (1,379)
        Common stock purchased by benefit plans          (2,108)           (851)
        Net unrealized gain on securities available
               for sale, net of tax                         807             941
                                                    -----------     -----------
     Total stockholders' equity                         136,166         127,951
                                                    -----------     -----------
     Total liabilities and stockholders' equity     $ 2,123,461     $ 1,999,307
                                                    ===========     ===========
</TABLE>


See accompanying Notes to Unaudited Consolidated Financial Statements.

                                       2
<PAGE>   4
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                    DECEMBER 31,                DECEMBER 31,
                                                              ----------------------       ---------------------     
                                                                 1998         1997           1998         1997
                                                              ----------------------       ---------------------    
                                                                     (In Thousands, Except Per Share Data)
<S>                                                           <C>          <C>             <C>         <C>        
INTEREST INCOME:
Loans                                                         $  35,127    $  32,405       $ 104,232   $  96,243  
Mortgage-related securities                                       3,069        3,664           8,637      10,990  
Investment securities                                             1,319        1,391           3,987       3,685  
Interest-bearing deposits                                            71          256             400         531  
                                                              ---------    ---------       ---------   ---------  
  Total interest income                                          39,586       37,716         117,256     111,449  
                                                                                                                  
INTEREST EXPENSE:                                                                                                 
Deposits                                                         17,157       16,240          50,902      47,938  
Notes payable and other borrowings                                6,356        6,275          19,448      18,891  
Other                                                               170          176             429         446  
                                                              ---------    ---------       ---------   ---------  
  Total interest expense                                         23,683       22,691          70,779      67,275  
                                                              ---------    ---------       ---------   ---------  
  Net interest income                                            15,903       15,025          46,477      44,174  
Provision for loan losses                                           275          110             600         135  
                                                              ---------    ---------       ---------   ---------  
  Net interest income after provision for loan losses            15,628       14,915          45,877      44,039  
                                                                                                                  
NON-INTEREST INCOME:                                                                                              
Loan servicing income                                                87          541             937       1,769  
Service charges on deposits                                       1,038        1,004           3,080       2,965  
Insurance commissions                                               233          283             905         833  
Gain on sale of loans                                             1,602          903           4,823       2,010  
Net income (loss) from operations of real estate investment         141           43           2,506        (460) 
Other                                                               826          853           1,826       1,690  
                                                              ---------    ---------       ---------   ---------  
  Total non-interest income                                       3,927        3,627          14,077       8,807  
                                                                                                                  
NON-INTEREST EXPENSES:                                                                                            
Compensation                                                      5,708        4,717          16,969      14,373  
Occupancy                                                           782          748           2,276       2,246  
Federal insurance premiums                                          208          209             627         625  
Furniture and equipment                                             780          714           2,464       2,208  
Data processing                                                     768          603           2,207       1,849  
Marketing                                                           571          574           1,726       1,695  
Net cost of operations of foreclosed properties                     (12)          (7)            161         (24) 
Other                                                             1,320        1,767           4,312       5,077  
                                                              ---------    ---------       ---------   ---------  
  Total non-interest expenses                                    10,125        9,325          30,742      28,049  
                                                              ---------    ---------       ---------   ---------  
  Income before income taxes                                      9,430        9,217          29,212      24,797  
Income taxes                                                      3,647        3,560          11,202       9,545  
                                                              ---------    ---------       ---------   ---------  
  Net income                                                  $   5,783    $   5,657       $  18,010   $  15,252  
                                                              =========    =========       =========   =========  
Earnings per share:                                                                                               
  Basic                                                       $    0.34    $    0.31       $    1.05   $    0.84  
  Diluted                                                          0.32         0.29            0.98        0.79  
                                                                                                                  
</TABLE>


See accompanying Notes to Unaudited Consolidated Financial Statements.


                                       3
<PAGE>   5
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                        NINE MONTHS ENDED DECEMBER 31,
                                                                      --------------------------------
                                                                            1998         1997
                                                                      --------------------------------
                                                                             (In Thousands)
<S>                                                                      <C>          <C>      
OPERATING ACTIVITIES
 Net income                                                              $  18,010    $  15,252
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Provision for losses on loans and foreclosed properties                     800          631
   Provision for depreciation and amortization                               1,705        1,712
   Net proceeds from origination and sale of loans held for sale            83,987       26,850
   Net gain on sales of loans and securities                                (5,198)      (2,035)
   Increase in accrued interest receivable                                    (570)        (145)
   Increase (decrease) in accrued interest payable                            (397)         432
   Increase (decrease) in accounts payable                                  (3,914)        (379)
   Other                                                                     1,597        1,956
                                                                         ---------    ---------
    Net cash provided by operating activities                               96,020       44,274


INVESTING ACTIVITIES
 Proceeds from sales of investment securities available for sale            32,216       12,639
 Proceeds from maturities of investment securities                          40,384       47,972
 Purchase of investment securities available for sale                      (47,601)     (55,887)
 Purchase of investment securities held to maturity                         (1,750)     (12,013)
 Proceeds from sales of mortgage-related securities available for sale       3,664         --
 Purchase of mortgage-related securities held to maturity                  (14,966)      (4,171)
 Purchase of mortgage-related securities available for sale                 (6,905)      (4,741)
 Principal collected on mortgage-related securities                         63,786       31,575
 Net increase in loans receivable                                         (273,170)     (97,504)
 Purchase of office properties and equipment                                (1,379)      (1,872)
 Sales of office properties and equipment                                       61          101
 Sales of real estate                                                        7,451        9,559
 Purchase of real estate held for sale                                     (13,162)      (3,789)
                                                                         ---------    ---------
 Net cash used by investing activities                                   (211,371)      (78,131)
</TABLE>



                                       4
<PAGE>   6
                 Consolidated Statements of Cash Flows (Cont'd)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                    Nine Months Ended December 31,
                                                                    -----------------------------
                                                                        1998            1997
                                                                    -----------------------------
                                                                         (In Thousands)
<S>                                                                  <C>              <C>         
Financing Activities                                                                              
 Increase in deposit accounts                                        $ 105,243        $  42,901   
 Decrease in advance payments by borrowers                                                        
   for taxes and insurance                                              (5,881)          (6,301)  
 Proceeds from notes payable to Federal Home Loan Bank                 671,550          379,100   
 Repayment of notes payable to Federal Home Loan Bank                 (638,500)        (320,720)  
 Decrease in securities sold under agreements                                                     
  to repurchase                                                        (18,839)         (39,335)  
 Increase (decrease) in other loans payable                              4,670          (10,750)  
 Treasury stock purchased                                               (9,676)          (4,860)  
 Reissuance of treasury stock for options                                2,267              499   
 Payments of cash dividends to stockholders                             (2,583)          (2,089)  
                                                                     ---------        ---------   
   Net cash provided by financing activities                           108,251           38,445   
                                                                     ---------        ---------   
   Net decrease in cash and cash equivalents                            (7,100)           4,588   
 Cash and cash equivalents at beginning of year                         39,167           38,025   
                                                                     ---------        ---------   
   Cash and cash equivalents at end of year                          $  32,067        $  42,613   
                                                                     =========        =========   
                                                                                                  
Supplementary cash flow information:                                                              
Cash paid or credited to accounts:                                                                
  Interest on deposits and borrowings                                $  70,382        $  68,066   
  Income taxes                                                          10,100            8,030   
                                                                                                  
Non-cash transactions:                                                                            
 Securitization of mortgage loans held for sale to mortgage-backed                                
   securities and other adjustments                                     85,837           28,670   
 Loans transferred to foreclosed properties                               --              2,406   
 Securities available for sale market value adjustment                    (236)           7,768   
</TABLE>


See accompanying Notes to Unaudited Consolidated Financial Statements.


                                        5
<PAGE>   7


                          ANCHOR BANCORP WISCONSIN INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - PRINCIPLES OF CONSOLIDATION

The unaudited consolidated financial statements include the accounts and results
of operations of Anchor BanCorp Wisconsin Inc. (the "Corporation") and its
wholly-owned subsidiaries, AnchorBank, S.S.B. (the "Bank"), Investment
Directions, Inc. ("IDI") and Nevada Investment Directions, Inc. ("NIDI"). The
Bank's statements include its wholly-owned subsidiaries, Anchor Insurance
Services, Inc. ("AIS"), ADPC Corporation ("ADPC"), and Anchor Investment
Corporation ("AIC"). One subsidiary, ADPC II, LLC ("ADPC II") was dissolved in
September 1998. All significant intercompany balances and transactions have been
eliminated. Investments in joint ventures and other less than 50% owned
partnerships, which are not material, are accounted for on the equity method.
Partnerships with 50% ownership or more are consolidated, with significant
intercompany accounts eliminated.


NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") and with
the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by GAAP for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation of
the consolidated financial statements have been included.


In preparing the consolidated financial statements in conformity with GAAP,
management is required to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual
results could differ from those estimates. The results of operations and other
data for the nine month period ended December 31, 1998 are not necessarily
indicative of results that may be expected for any other interim period or the
entire fiscal year ending March 31, 1999. The unaudited consolidated financial
statements presented herein should be read in conjunction with the audited
consolidated financial statements and related notes thereto included in the
Corporation's Annual Report for the year ended March 31, 1998.

NEW ACCOUNTING STANDARDS As of January 1, 1998, the Corporation adopted
Statement 130, Reporting Comprehensive Income. Statement 130 establishes new
rules for the reporting and display of comprehensive income and its components;
however, the adoption of this Statement had no impact on the Corporation's net
income or shareholders' equity. Statement 130 requires unrealized gains or
losses on the Corporation's available-for-sale securities, which prior to
adoption were reported separately in shareholders' equity, to be included in
other comprehensive income. Prior year financial statements have been
reclassified to conform to the requirements of Statement 130.

During the quarter ended December 31, 1998 and 1997, total comprehensive income
amounted to $5.5 million and $6.1 million, respectively.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosure about Segments of an
Enterprise and Related Information (Statement 131), which is effective for years
beginning after December 15, 1997. Statement 131 establishes standards for the
way that public business enterprises report information about operating segments
in annual and interim financial statements. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The Corporation is not required to disclose segment information in
accordance with Statement 131 until March 31, 1999.



                                       6



<PAGE>   8



RECLASSIFICATIONS Certain 1997 accounts have been reclassified to conform to the
1998 presentations. Specifically, non-interest income and non-interest expense
items associated with the operation of partnership investments in real estate
have been restated as one category called Net income (loss) from operations of
real estate investment, under non-interest income, for all periods shown.
Additionally, the amortization of Originated Mortgage Servicing Rights (OMSR's)
was formerly treated as a charge to other income. The amortization of OMSR's
will now be charged to loan servicing income for all periods shown.


NOTE 3 - STOCKHOLDERS' EQUITY

On December 16, 1998, 7,200 shares granted pursuant to the Corporation's
management recognition plan were earned by the recipients. During the quarter
ended December 31, 1998, options for 180,760 shares of common stock were
exercised at a weighted price of $2.85 per share. Treasury shares were issued in
exchange for the options using the last-in-first-out method. The cost of
treasury shares issued in excess of the option price paid was charged to
retained earnings ($3.36 million). During the quarter ended December 31, 1998,
the Corporation repurchased 20,400 shares of common stock on the open market for
an average price of $19.89. During the quarter, 11,890 shares of common stock
were repurchased from treasury stock for several management retirement plans.
The weighted cost of these repurchases was $18.63 per share or $220,000 and the
excess of the cost of the treasury shares over the market price ($20,000) was
charged to retained earnings. On November 15, 1998, the Corporation paid out a
cash dividend of $.05 per share, amounting to $890,000.


NOTE 4 - EARNINGS PER SHARE

The weighted average number of shares of common stock and common stock
equivalents outstanding for December 31, 1998 and 1997 have been adjusted to
reflect the two-for-one stock split effected on August 24, 1998. Earnings per
share for the three and nine months ended December 31, 1998 and 1997 have been
determined by dividing net income for the respective periods by the weighted
average number of shares of common stock and common stock equivalents
outstanding. Common stock equivalents are computed using the treasury stock
method.





                                       7



<PAGE>   9
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED DECEMBER 31,
                                                       -------------------------------
                                                          1998               1997     
                                                       -------------------------------
<S>                                                    <C>                <C>             
Numerator:
       Net income                                      $ 5,782,496        $ 5,656,627     
                                                       -----------        -----------     
       Numerator for basic and diluted earnings                                           
         per share--income available to common                                            
         stockholders                                  $ 5,782,496        $ 5,656,627     
                                                                                          
Denominator:                                                                              
       Denominator for basic earnings per                                                 
         share--weighted-average shares                 17,130,657         18,126,002     
       Effect of dilutive securities:                                                     
         Employee stock options                          1,151,364          1,306,086     
                                                       -----------        -----------     
       Denominator for diluted earnings per                                               
         share--adjusted weighted-average                                                 
         shares and assumed conversions                 18,282,021         19,432,088     
                                                       ===========        ===========     
Basic earnings per share                               $      0.34        $      0.31     
                                                       ===========        ===========     
Diluted earnings per share                             $      0.32        $      0.29     
                                                       ===========        ===========     
</TABLE> 




<TABLE>
<CAPTION>
                                                         NINE MONTHS ENDED DECEMBER 31,
                                                         ------------------------------
                                                             1998               1997
                                                         ------------------------------
<S>                                                       <C>              <C>              
Numerator:
       Net income                                         $18,009,963      $15,252,139      
                                                          -----------      -----------    
       Numerator for basic and diluted earnings                                           
         per share--income available to common                                            
         stockholders                                     $18,009,963      $15,252,139    
                                                                                          
Denominator:                                                                              
       Denominator for basic earnings per                                                 
         share--weighted-average shares                    17,141,624       18,124,148    
       Effect of dilutive securities:                                                     
         Employee stock options                             1,261,407        1,171,418    
       Denominator for diluted earnings per                                               
         share--adjusted weighted-average                                                 
                                                          -----------      -----------    
         shares and assumed conversions                    18,403,031       19,295,566    
                                                          ===========      ===========    
Basic earnings per share                                  $      1.05      $      0.84    
                                                          ===========      ===========    
Diluted earnings per share                                $      0.98      $      0.79    
                                                          ===========      ===========    
</TABLE>



                                       8
<PAGE>   10





NOTE 5 - SUBSEQUENT EVENTS

On January 15, 1999, the Corporation announced a definitive agreement to merge
with FCB Financial Corp. It is anticipated that the merger will be accounted for
as a pooling of interests. On January 21, 1999, the Corporation declared a $.05
per share cash dividend to be paid on February 15, 1999 to stockholders of
record on February 1, 1999.






                                       9





<PAGE>   11



                          ANCHOR BANCORP WISCONSIN INC.

    ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

This report contains certain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Corporation desires to take
advantage of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 and is including this statement for the expressed purpose of
availing itself of the protection of the safe harbor with respect to all of such
forward-looking statements. These forward-looking statements describe future
plans or strategies and include the Corporation's expectations of future
financial results. The Corporation's ability to predict results or the effect of
future plans or strategies is inherently uncertain and the Corporation can give
no assurance that those results or expectations will be attained. Factors that
could affect actual results include but are not limited to i) general market
rates, ii) changes in market interest rates and the shape of the yield curve,
iii) general economic conditions, iv) real estate markets, v)
legislative/regulatory changes, vi) monetary and fiscal policies of the U.S.
Treasury and the Federal Reserve, vii) changes in the quality or composition of
the Corporation's loan and investment portfolios, viii) demand for loan
products, ix) the level of loan and MBS repayments, x) deposit flows, xi)
competition, xii) demand for financial services in the Corporation's markets,
and xiii) changes in accounting principles, policies or guidelines. These
factors should be considered in evaluating the forward-looking statements, and
undue reliance should not be placed on such statements.


The Corporation does not undertake and specifically disclaims any obligation to
update any forward-looking statements to reflect occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.

The following discussion is designed to provide a more thorough discussion of
the Corporation's financial condition and results of operations as well as to
provide additional information on the Corporation's asset/liability management
strategies, sources of liquidity and capital resources. Management's discussion
and analysis should be read in conjunction with the consolidated financial
statements and supplemental data contained elsewhere in this report.

RESULTS OF OPERATIONS

General. Net income for the three and nine months ended December 31, 1998
increased $130,000 to $5.8 million and $2.7 million to $18.0 million,
respectively, from the same periods in the prior year. The increase in net
income for the periods was largely due to the increase in interest income of
$1.9 million and $5.8 million, respectively, for the three and nine months ended
December 31, 1998, as well as an increase in non-interest income of $300,000 and
$5.3 million, respectively, during the periods. Such increases for the three and
nine months ended December 31, 1998 were offset by (i) an increase in interest
expense of $1.0 million and $3.5 million, respectively, (ii) an increase in
non-interest expense of $800,000 and $2.7 million, respectively, and (iii) an
increase in income taxes of $90,000 and $1.7 million, respectively.

Net Interest Income. Net interest income increased $880,000 and $2.3 million for
the three and nine months ended December 31, 1998 respectively, compared to the
same periods in 1997. The net interest margin decreased to 3.12% from 3.18% for
the respective three-month periods and decreased to 3.11% from 3.17% for the
respective nine-month periods. The interest rate spread decreased to 2.93% from
2.98% and decreased to 2.92% from 2.99%, respectively, for the same periods.

Interest income on loans increased $2.7 million and $8.0 million for the three
and nine months ended December 31, 1998 respectively, compared to the same
periods in the prior year. This increase was a result of an increase of $196.3
million and $180.1 million, respectively, in the average balance of loans for
the periods due to increased loan originations. Interest income on
mortgage-related securities decreased $600,000 and $2.4 million for the same
periods due primarily to the decrease of $16.4 million and $40.4 million,
respectively in the average balance of mortgage-related securities. Interest
income on investment securities (including Federal Home Loan Bank stock)



                                       10


<PAGE>   12



decreased $70,000 and increased $300,000, respectively, for the three- and
nine-month periods ended December 31, 1998 as compared to the same periods in
the prior year. This was primarily a result of a decrease of $16.2 million and
$7.2 million, respectively, in the average balance of investment securities for
the three and nine months ended December 31, 1998 as compared to the same
periods in 1997. The nine-month figure was slightly offset by an increase of
$650,000 in the average balance of Federal Home Loan Bank stock. Interest income
on interest-bearing deposits decreased $190,000 and $130,000, respectively, for
the three and nine months ended December 31, 1998, due to the decrease of $12.9
million and $2.9 million in the average balance of interest-bearing deposits.

Interest expense on deposits increased $900,000 and $3.0 million, respectively,
for the three and nine months ended December 31, 1998 as compared to the same
periods in 1997. The increase was due primarily to the increase in the average
balance of deposits of $134.9 million and $113.1 million, respectively, for the
three- and nine-month periods as a result of various demand deposit and
certificate promotions. Interest expense on notes payable and other borrowings
increased $80,000 and $560,000, respectively, during the same periods.

Provision for Loan Losses. Provision for loan losses increased $170,000 and
$470,000 for the three- and nine-month periods ended December 31, 1998 as
compared to the same periods in the prior year. The provision was based on
management's ongoing evaluation of asset quality.

Average Interest-Earning Assets, Average Interest-Bearing Liabilities and
Interest Rate Spread. The following tables show the Corporation's average
balances, interest, average rates and the spread between the combined average
rates earned on interest-earning assets and average cost of interest-bearing
liabilities for the periods indicated. The average balances are derived from
average daily balances.



                                       11
<PAGE>   13
<TABLE>
<CAPTION>
                                                              
                                                                         THREE MONTHS ENDED DECEMBER 31,
                                                 -----------------------------------------------------------------------------
                                                               1998                                   1997
                                                 -----------------------------------   ---------------------------------------
                                                                            AVERAGE                                   AVERAGE
                                                   AVERAGE                   YIELD/    AVERAGE                         YIELD/
                                                   BALANCE     INTEREST      COST(1)   BALANCE       INTEREST          COST(1)
                                                 -----------------------------------------------------------------------------
                                                                        (Dollars In Thousands)
<S>                                              <C>          <C>             <C>     <C>          <C>                  <C>  
INTEREST-EARNING ASSETS
Mortgage loans (2)                               $1,371,230   $   26,678      7.78%   $1,180,925      $   23,879         8.09%
Consumer loans (2)                                  342,628        7,627      8.90       341,729           7,752         9.07
Commercial business loans(2)                         35,415          822      9.28        30,312             774        10.21
                                                 ----------   ----------              ----------      ----------              
  Total loans receivable (2)                      1,749,273       35,127      8.03     1,552,966          32,405         8.35
Mortgage-related securities                         195,270        3,069      6.29       211,644           3,664         6.92
Investment securities                                67,492          952      5.64        83,726           1,003         4.79
Interest-bearing deposits                             5,766           71      4.93        18,709             256         5.47
Federal Home Loan Bank stock                         21,950          367      6.69        21,963             388         7.07
                                                 ----------   ----------              ----------      ----------              
  Total interest-earning assets                   2,039,751       39,586      7.76     1,889,008          37,716         7.99
  Non-interest-earning assets                        89,898                  -----        77,936                        -----
                                                 ----------                           ----------                              
  Total assets                                   $2,129,649                           $1,966,944  
                                                 ==========                           ==========  
                                                                                                                 
INTEREST-BEARING LIABILITIES                                                                                     
Demand deposits                                  $  413,069        2,755      2.67    $  344,109           2,481         2.88   
Regular passbook savings                            101,476          520      2.05        99,103             569         2.30  
Certificates of deposit                             974,815       13,882      5.70       911,245          13,190         5.79  
                                                 ----------   ----------              ----------      ----------              
  Total deposits                                  1,489,360       17,157      4.61     1,354,457          16,240         4.80  
Notes payable and other borrowings                  455,216        6,356      5.59       440,035           6,275         5.70  
Other                                                17,623          170      3.86        18,732             176         3.76  
                                                 ----------   ----------              ----------      ----------              
  Total interest-bearing liabilities              1,962,199       23,683      4.83     1,813,224          22,691         5.01  
Non-interest-bearing liabilities                     33,798   ----------     -----        23,945      ----------        -----  
                                                 ----------                           ----------                              
  Total liabilities                               1,995,997                            1,837,169                               
Stockholders' equity                                133,652                              129,775                               
                                                 ----------                           ----------                              
  Total liabilities and stockholders'                                                                                          
   equity                                        $2,129,649                           $1,966,944                                   
                                                 ==========                           ==========                                   
                                                                                                                               
  Net interest income/interest rate spread                    $   15,903      2.93%                   $   15,025         2.98% 
                                                              ==========      ====                    ==========         ====  
  Net interest-earning assets                    $   77,552                           $   75,784                               
                                                 ==========                           ==========                               
  Net interest margin                                                         3.12%                                      3.18% 
                                                                              ====                                       ====  
  Ratio of average interest-earning assets                                                                                     
   to average interest-bearing liabilities             1.04                                 1.04                               
                                                       ====                                 ====                               
</TABLE>

--------------------------------------------
(1) Annualized
(2) The average balances of loans include non-performing loans, interest of
    which is recognized on a cash basis.



                                       12
<PAGE>   14
<TABLE>
<CAPTION>
                                                                   NINE MONTHS ENDED DECEMBER 31,
                                              --------------------------------------------------------------------------
                                                           1998                                      1997
                                              -----------------------------------   ------------------------------------
                                                                         AVERAGE                               AVERAGE
                                               AVERAGE                   YIELD/       AVERAGE                   YIELD/
                                               BALANCE      INTEREST     COST(1)      BALANCE     INTEREST     COST(1)
                                              --------------------------------------------------------------------------
                                                                  (Dollars In Thousands)
<S>                                           <C>           <C>          <C>         <C>           <C>         <C>  
INTEREST-EARNING ASSETS
Mortgage loans (2)                            $ 1,335,239    $ 78,671    7.86%       $ 1,165,373   $ 71,261      8.15%
Consumer loans (2)                                341,598      23,080     9.01           336,796     22,663      8.97
Commercial business loans(2)                       34,574       2,480     9.56            29,120      2,319     10.62
                                              -----------    --------                -----------   --------          
  Total loans receivable (2)                    1,711,411     104,232     8.12         1,531,289     96,243      8.38
Mortgage-related securities                       181,063       8,637     6.36           221,463     10,990      6.62
Investment securities                              66,538       2,914     5.84            73,699      2,611      4.72
Interest-bearing deposits                          10,093         400     5.28            13,042        531      5.43
Federal Home Loan Bank stock                       21,495       1,073     6.66            20,848      1,074      6.87
                                              -----------    --------                -----------   --------          
  Total interest-earning assets                 1,990,600     117,256     7.85         1,860,341    111,449      7.99
                                                                        ------                                  -----
Non-interest-earning assets                        86,437                                 78,231
                                              -----------                            -----------
  Total assets                                $ 2,077,037                            $ 1,938,572
                                              ===========                            ===========

INTEREST-BEARING LIABILITIES
Demand deposits                               $   388,344       8,055     2.77       $   328,455      7,101      2.88
Regular passbook savings                          101,829       1,567     2.05           100,234      1,720      2.29
Certificates of deposit                           954,953      41,280      .76           903,299     39,117      5.77
                                              -----------    --------                -----------   --------          
  Total deposits                                1,445,126      50,902     4.70         1,331,988     47,938      4.80
Notes payable and other borrowings                455,393      19,448     5.69           444,718     18,891      5.66
Other                                              15,179         429     3.77            16,125        446      3.69
                                              -----------    --------                -----------   --------          
  Total interest-bearing liabilities            1,915,698      70,779     4.93         1,792,831     67,275      5.00
Non-interest-bearing liabilities                   30,547    --------    -----            20,500   --------     -----
                                              -----------                            -----------
  Total liabilities                             1,946,245                              1,813,331
Stockholders' equity                              130,792                                125,241
                                              -----------                            -----------
  Total liabilities and stockholders' 
   equity                                     $ 2,077,037                            $ 1,938,572
                                              ===========                            ===========

  Net interest income/interest rate spread                  $  46,477     2.92%                    $ 44,174      2.99%
                                                            =========    =====                    =========     =====
  Net interest-earning assets                   $ 74,902                               $ 67,510
                                                ========                               ========
  Net interest margin                                                     3.11%                                  3.17%
                                                                         =====                                  =====
  Ratio of average interest-earning assets
   to average interest-bearing liabilities          1.04                                   1.04
                                                    ====                                   ====
</TABLE>


--------------------------------------------
(1) Annualized
(2) The average balances of loans include non-performing loans, interest of
    which is recognized on a cash basis.



                                       13



















<PAGE>   15


Non-Interest Income. Non-interest income increased $300,000 to $3.9 million and
$5.3 million to $14.1 million, respectively, for the three and nine months ended
December 31, 1998 as compared to the same periods in the prior year as a result
of several factors. The gain on sale of loans increased $700,000 and $2.8
million, respectively, for the three- and nine-month periods due to increased
volume of loan sales. Net income (loss) from operations of real estate
investments for the three and nine months ended December 31, 1998 increased
$100,000 and $3.0 million because of an increase in sales of partnership
interests at IDI. Service charges on deposits increased $30,000 and $120,000 for
the same three- and nine-month periods ended December 31, 1998 due to increased
volume in this area. Insurance commissions decreased $50,000 for the three-month
period and increased $70,000 for the nine-month period. In addition, loan
servicing income decreased $450,000 and $830,000, respectively, for the three
and nine months ended December 31, 1998. This decrease is attributed to the fact
that the amortization of Originated Mortgage Servicing Rights (OMSR's) was
formerly charged to the category of other income rather than to loan servicing
income. Other non-interest income decreased $30,000 for the three-month period
and increased $140,000 for the nine-month period.

Non-Interest Expense. Non-interest expense increased $800,000 to $10.1 million
and $2.7 million to $30.7 million, respectively, during the three and nine
months ended December 31, 1998 as compared to the same periods in 1997 as a
result of several factors. Compensation expense increased $990,000 and $2.6
million, respectively, due primarily to an increase in incentive compensation
resulting from increased loan production. Data processing expense increased
$170,000 and $360,000, respectively, for the three and nine months ended
December 31, 1998. Furniture and equipment expenses increased $70,000 and
$260,000 for the same time periods, largely due to normal increases in
depreciation and other costs. Occupancy expense increased $30,000 for both the
three and nine months ended December 31, 1998. Net cost of operations of
foreclosed properties decreased $10,000 for the three-month period and increased
$190,000 for the nine-month period. These increases were partially offset by a
decrease in other non-interest expenses such as legal and consulting and audit
and accounting of $450,000 and $770,000, respectively.

Income Taxes. Income tax expense increased $90,000 and $1.7 million, during the
three and nine months ended December 31, 1998 as compared to the same periods in
1997. The effective tax rate was 38.7% and 38.3%, respectively, for the current
year as compared to 38.6% and 38.5% for the three- and nine-month periods last
year.



                                       14





<PAGE>   16




FINANCIAL CONDITION


During the nine months ended December 31, 1998, the Corporation's assets
increased by $124.2 million from $2.0 billion at March 31, 1998, to $2.12
billion. The majority of this increase was attributable to increases in loans
and mortgage-related securities.

Investment securities (both available for sale and held to maturity) decreased
$23.4 million during the nine months ended December 31, 1998 as a result of
purchases of $48.9 million of U.S. Government and agency securities which was
partially offset by sales and maturities of $72.6 million.

Mortgage-related securities (both available for sale and held to maturity)
increased $38.0 million during the nine months ended December 31, 1998 as a
result of (i) securitization of $83.5 million of loans held for investment into
securities guaranteed by the Federal National Mortgage Association and backed by
such loans and (ii) purchases of $21.9 million. These increases were partially
offset by principal repayments and market value adjustments of $63.8 million.
Mortgage-related securities consisted of $214.9 million of mortgage-backed
securities and $17.8 million of Collateralized Mortgage Obligations ("CMO's")
and Real Estate Mortgage Investment Conduits ("REMIC's") at December 31, 1998.

The Corporation's investments in CMO's and REMIC's are limited to federal agency
issued REMIC's which represent an interest in mortgage-backed securities. These
investments are deemed to have limited credit risk. The investments do have
interest rate risk due to, among other things, actual prepayments being more or
less than those predicted at the time of purchase. The Corporation invests only
in short-term tranches in order to limit the reinvestment risk associated with
greater than anticipated prepayments, as well as changes in value resulting from
changes in interest rates.

Total loans (including loans held for sale) increased $111.8 million during the
nine months ended December 31, 1998. Activity for the period included (i)
originations and purchases of $1.05 billion, (ii) sales of $345.9 million, which
included securitization of $83.5 million of loans into mortgage-backed
securities and (iii) principal repayments and other adjustments of $589.8
million.

Deposits increased $105.2 million during the nine months ended December 31,
1998. The increase was due primarily to new demand deposit products and
certificate promotions. Brokered deposits have been used in the past and may be
used in the future as the need for funds requires it. Brokered deposits totaled
$82.7 million at December 31, 1998 and generally mature in one year. FHLB
advances increased $33.1 million during the nine months ended December 31, 1998.
Reverse repurchase agreements and other borrowings decreased $14.2 million
during the nine months ended December 31, 1998. Advance payments by borrowers
for taxes and insurance decreased $5.9 million.

Stockholders' equity increased $8.2 million during the nine months ended
December 31, 1998 as a net result of (i) comprehensive income of $17.88 million,
(ii) stock options exercised of $9.10 million (with the excess of the cost of
treasury shares over the option price ($6.80 million) charged to retained
earnings) and (iii) the tax benefit from certain stock options of $1.59 million.
These were offset by (i) treasury stock repurchased of $9.68 million, (ii) cash
dividends of $2.58 million and (iii) benefit plan shares earned and related tax
adjustments totaling $1.26 million, and (iv) loss on treasury shares repurchased
for management employee retirement plans of $40,000.



IMPACT OF YEAR 2000



STATE OF READINESS The Corporation is currently in the process of addressing a
potential problem that faces all users of automated systems including
information systems. Many computer systems process transactions based on two
digits representing the year of transaction, rather than four digits. These
computer systems may not operate properly when the last two digits become "00",
as will occur on January 1, 2000. The problem could affect a wide variety of
automated information systems, such as mainframe applications, personal
computers, communication systems, environmental systems and other information
systems.



                                       15


<PAGE>   17



The Corporation has identified areas of operations critical for the delivery of
its products and services. The majority of the Corporation's applications used
in operations are purchased from an outside vendor (referred to later in this
paragraph as the primary third party data processing provider). The vendor
providing the software is responsible for maintenance of the systems and
modifications to enable uninterrupted usage after December 31, 1999. The
Corporation's plan includes obtaining certification of compliance from third
parties and testing all of the impacted applications (both internally developed
and third party provided). The Corporation's goal is to be fully compliant by
March 31, 1999. The Corporation has completed two tests with its primary third
party data processing provider. The tests, completed on August 16, 1998 and
September 20, 1998, were both successful in all applications. On December 6,
1998, the loan origination system was tested by a third party and found to be
Year 2000 compliant. The following table indicates the Corporation's progress in
the assessment, remediation, testing and implementation of becoming Year 2000
compliant.

------------------------------------------------------------------------------
         RESOLUTION PHASES OF YEAR 2000 COMPLIANCE AT DECEMBER 31, 1998
------------------------------------------------------------------------------
  EXPOSURE
    TYPE       ASSESSMENT      REMEDIATION      TESTING         IMPLEMENTATION
------------------------------------------------------------------------------

Information    100% Complete   100% Complete    95% Complete    80% Complete
Technology
                                                Expected        Expected
                                                completion      completion 
                                                date, 3/31/99   date, 3/31/99

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

Operating      100% Complete   100% Complete    100% Complete   100% Complete
Equipment 
with
Embedded Chips
or Software

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

3rd Party      100% Complete   95% Complete      95% Complete   90% Complete 
               for System      for system        for system     for system
               interface;      interface         interface      interface
               100% Complete
               for all other   Develop           Expected       Expected
               material        contingency       completion     completion
               exposures       plans as          date for       date for 
                               appropriate,      system         system
                               3/31/99           interface      interface work,
                                                 work, 3/31/99  3/31/99

                                                                Implement
                                                                contingency
                                                                plans or
                                                                other
                                                                alternatives
                                                                as necessary,
                                                                3/31/99
------------------------------------------------------------------------------
                                                                

COSTS The Corporation will utilize both internal and external resources to
reprogram, or replace, test, and implement the software and operating equipment
for Year 2000 modifications. The total cost of the Year 2000 project is



                                       16




<PAGE>   18



estimated at $500,000 and is being funded through operating cash flows. To date,
the Corporation has incurred $250,000 ($100,000 expensed and $150,000
capitalized for new systems and equipment), related to all phases of the Year
2000 project. Of the total remaining project costs, approximately $100,000 is
attributable to the purchase of new software and operating equipment, which will
be capitalized. The remaining $150,000 relates to consulting and remediation of
hardware and software. Both of the latter will be expensed as incurred.

RISKS Management of the Corporation believes it has an effective program in
place to resolve the Year 2000 issue in a timely manner. As noted above, the
Corporation has not yet completed all necessary phases of the Year 2000 program.
In the event that the Corporation does not complete any additional phases, the
Corporation could be unable to accept deposits or withdrawals, open accounts, or
process loan payments. In addition, disruptions in the economy generally
resulting from Year 2000 issues could also materially adversely affect the
Corporation. The Corporation could be subject to litigation for computer systems
product failure, for example, failure to properly date business records such as
accrued loan interest. The amount of potential liability and lost revenue cannot
be reasonably estimated at this time.

CONTINGENCY PLANS The Corporation is completing contingency plans for certain
critical applications and is working on such plans for others. These contingency
plans involve, among other actions, additional equipment and supplies,
additional staff and training, and hard copy records of critical information.
The expected date of completion for these contingency plans is March 31, 1999.


ASSET QUALITY

Loans are placed on non-accrual status when, in the judgment of management, the
probability of collection of interest is deemed to be insufficient to warrant
further accrual. When a loan is placed on non-accrual status, previously accrued
but unpaid interest is deducted from interest income. As a matter of policy, the
Corporation does not accrue interest on loans past due 90 days or more.

Non-performing assets (consisting of non-accrual loans, certain real estate held
for development and sale, foreclosed properties and repossessed assets)
decreased to $7.0 million at December 31, 1998 from $12.9 million at March 31,
1998 and decreased as a percentage of total assets to .33% from 0.64% at such
dates, respectively.





                                       17

<PAGE>   19
Non-performing assets are summarized as follows at the dates indicated.


<TABLE>
<CAPTION>
                                                                                    At March 31
                                                    At December 31,    ---------------------------------------
                                                          1998           1998          1997            1996
                                                    --------------     ----------------------------------------
                                                                 (Dollars In Thousands)
<S>                                                      <C>           <C>           <C>             <C>        
Non-accrual loans:
 Single-family residential                               $ 1,688       $ 1,273       $ 1,712         $   629    
 Multi-family residential                                   --             898         3,199            --      
 Commercial real estate                                      165           288           778             470    
 Construction and land                                      --            --              58              81    
 Consumer                                                    826           577           438             202    
 Commercial business                                         476           673           610             508    
                                                         -------       -------       -------         -------    
  Total non-accrual loans                                  3,155         3,709         6,795           1,890    
Real estate held for development and sale                  1,388         4,431         2,736           2,319    
Foreclosed properties and repossessed assets, net          2,487         4,723         4,222           6,077    
                                                         -------       -------       -------         -------    
  Total non-performing assets                            $ 7,030       $12,863       $13,753         $10,286    
                                                         =======       =======       =======         =======    
                                                                                                                
Performing troubled debt restructurings                  $ 2,889       $   725       $   329         $   332    
                                                         =======       =======       =======         =======    
                                                                                                                
Total non-accrual loans to total loans                      0.17%         0.22%         0.44%           0.13%   
Total non-performing assets to total assets                 0.33          0.64          0.73            0.59    
Allowance for loan losses to total loans                    1.12          1.30          1.48            1.59    
Allowance for loan losses to total                                                                              
 non-accrual loans                                        644.53        588.65        334.81        1,206.72   
Allowance for loan and foreclosure losses                                                                       
 to total non-performing assets                           294.50        172.26        173.26          228.70    
</TABLE>


At December 31, 1998, there were no non-accrual loans with a carrying value
greater than $1.0 million. Non-accrual loans decreased $550,000 during the nine
months ended December 31, 1998. Non-performing real estate held for development
and sale decreased $3.0 million for the nine months ended December 31, 1998.

At December 31, 1998, there was one property in non-performing real estate held
for development and sale with a carrying value greater than $1.0 million. The
property consists of several condominium units in Bloomington, Minnesota with a
carrying value of $2.0 million. The units were related to, but not a part of, a
former non-accrual loan for a condominium project. These units were purchased in
the last fiscal year in an effort to solidify the Corporation's position with
regard to the original non-accrual loan. The Corporation is in the process of
completing the units for subsequent sale. A multi-family project that had been
reported in this category, was transferred to performing troubled debt
restructurings during the prior quarter. The project, located in Madison,
Wisconsin, had a carrying value of $2.9 million. The sale of the project
resulted in the Corporation providing interim financing to the buyer until
permanent financing can be obtained. A deferred gain of $650,000, associated
with the project remains in real estate held for development and sale until the
sale of the property, now held in performing troubled debt restructuring, is
deemed final.

At December 31, 1998, there were no foreclosed properties and repossessed assets
with a carrying value greater than $1.0 million. Foreclosed properties and
repossessed assets decreased $2.2 million during the nine-month period. The
decrease was due primarily to the sale of an apartment complex in Elm Grove,
Wisconsin, which formerly 



                                       18


<PAGE>   20


secured a $2.2 million loan. A portion of the property that had been identified
as containing environmental contamination remains on the Corporation's books,
however, due to limited use restrictions and contamination, the parcel is deemed
to have no value. Environmental cleanup costs may be covered by Petroleum
Environmental Cleanup Funds. This matter has not been resolved because of
ongoing litigation.

Performing troubled debt restructurings increased by $2.2 million during the
nine months ended December 31, 1998 primarily as a result of the transfer of a
multi-family property with a carrying value of $2.9 million from real estate
held for development and sale. The balance of the change was largely due to the
payoff of a $600,000 loan that secured a wood chipping operation.

At December 31, 1998, assets that the Corporation has classified, as substandard
net of reserves, consisted of $15.1 million of loans and foreclosed properties.
As of March 31, 1998, the substandard assets amounted to $15.8 million. The
decrease of $700,000 is the net effect of several changes. The removal of the
above-discussed Elm Grove, Wisconsin property from foreclosed properties and
repossessed assets, as a result of the sale, represented a reduction of $2.2
million. The sale of a parcel of land in Monona, Wisconsin represented a
$500,000 reduction. These removals were offset by increases in all categories of
substandard loans totalling $2.0 million. Of the increases in the categories of
substandard loans, there are no loans with a carrying value of greater than $1.0
million.

The following table sets forth information relating to the Corporation,s loans
which were less than 90 days delinquent at the dates indicated.


<TABLE>
<CAPTION>
                                                   At March 31,
                    At December 31,    --------------------------------------
                         1998            1998           1997         1996
                   ----------------    --------------------------------------
                                                (In Thousands)

<S>                    <C>               <C>           <C>           <C>     
30 to 59 days          $4,158            $3,732        $3,144        $5,776  
60 to 89 days           1,035               994           909           789  
                       ------            ------        ------        ------  
    Total              $5,193            $4,726        $4,053        $6,565  
                       ======            ======        ======        ======  
</TABLE>



The Corporation's loan portfolio, foreclosed properties and repossessed assets
are evaluated on a continuing basis to determine the necessity for additions to
the allowance for losses and the related balance in the allowances. These
evaluations consider several factors, including, but not limited to, general
economic conditions, loan portfolio composition, loan delinquencies, prior loss
experience, collateral value, anticipated loss of interest and managementss
estimation of future potential losses. The evaluation of the allowance for loan
losses includes a review of known loan problems as well as potential problems
based upon historical trends and ratios. Foreclosed properties are recorded at
the lower of carrying value or fair value less costs to sell with charge-offs,
if any, charged to the allowance for loan losses prior to transfer to foreclosed
property. The fair value is primarily based on appraisals, discounted cash flow
analysis (the majority of which are based on current occupancy and lease rates)
and pending offers.




                                       19





<PAGE>   21



A summary of the activity in the allowance for losses on loans follows:












<TABLE>
<CAPTION>
                                            Three Months Ended               Nine Months Ended
                                               December 31,                      December 31,
                                        ---------------------------       --------------------------
                                          1998             1997               1998           1997
                                        ---------------------------       --------------------------
                                                             (Dollars In Thousands)
<S>                                     <C>               <C>              <C>            <C>           
Allowance at beginning of period        $ 21,440          $ 22,195         $ 21,833       $ 22,750      
Charge-offs:                                                                                            
  Mortgage                                (1,210)             (103)          (1,518)          (132)     
  Consumer                                  (254)             (135)            (738)          (788)     
  Commercial business                       (157)             --               (367)            (8)     
                                        --------          --------         --------       --------      
     Total charge-offs                    (1,621)             (238)          (2,623)          (928)     
Recoveries:                                                                                             
  Mortgage                                   217                 4              399             55      
  Consumer                                    20                15              106             37      
  Commercial business                          4                 9               20             46      
                                        --------          --------         --------       --------      
     Total recoveries                        241                28              525            138      
                                        --------          --------         --------       --------      
     Net charge-offs                      (1,380)             (210)          (2,098)          (790)     
Provision                                    275               110              600            135      
                                        --------          --------         --------       --------      
   Allowance at end of period           $ 20,335          $ 22,095         $ 20,335       $ 22,095      
                                        ========          ========         ========       ========      
                                                                                                        
Net charge-offs to average loans           (0.32)%           (0.05)%          (0.16)%        (0.07)%    
                                        ========          ========         ========       ========      
</TABLE>


Although management believes that the December 31, 1998 allowance for loan
losses is adequate, based upon the current evaluation of loan delinquencies,
non-accrual loans, charge-off trends, economic conditions and other factors,
there can be no assurance that future adjustments to the allowance, which could
adversely affect the Corporation's results of operations, will not be necessary.
Management also continues to pursue all practical and legal methods of
collection, repossession and disposal, as well as adhering to high underwriting
standards in the origination process, in order to maintain strong asset quality.

LIQUIDITY AND CAPITAL RESOURCES

On an unconsolidated basis, the Corporation's sources of funds include dividends
from its subsidiaries, including the Bank, interest on its investments and
returns on its real estate held for sale. The Bank's primary sources of funds
are payments on loans and mortgage-related securities, deposits from retail and
wholesale sources, advances and other borrowings.

At December 31, 1998, the Corporation had outstanding commitments to originate
loans of $77.1 million, commitments to extend funds to, or on behalf of,
customers pursuant to lines and letters of credit of $90.2 million and loans
sold with recourse to the Corporation in the event of default by the borrower of
$1.5 million. Scheduled maturities of certificates of deposit during the twelve
months following December 31, 1998 amounted to $758.0 million and scheduled
maturities of FHLB advances during the same period totaled $241.3 million. At
December 31, 1998, the Corporation also had $24.1 million of reverse repurchase
agreements, all of which are scheduled to mature during the twelve months
following December 31, 1998. Management believes adequate capital and borrowings
are available from various sources to fund all commitments to the extent
required.

The Bank is required by the Office of Thrift Supervision ("OTS") to maintain
specified levels of liquid investments in qualifying types of U.S. Government
and agency securities and other investments. This requirement, which may be
varied by the OTS, is based upon a percentage of deposits and short-term
borrowings. The required percentage is currently 4.0%. During the quarter ended
December 31, 1998, the Bank's average liquidity ratio was 14.50%.




                                       20



<PAGE>   22


     Under federal law and regulation, the Bank is required to meet certain
tangible, core and risk-based capital requirements. Tangible capital generally
consists of stockholders' equity minus certain intangible assets. Core capital
generally consists of tangible capital plus qualifying intangible assets. The
risk-based capital requirements presently address credit risk related to both
recorded and off-balance sheet commitments and obligations. As a state-chartered
savings institution, the Bank is also subject to the minimum regulatory capital
requirement of the State of Wisconsin, which is 6% of total assets. The Bank's
capital ratio for this measurement was 6.80% as of December 31, 1998.

The following summarizes the Bank's capital levels and ratios and the levels and
ratios required by the OTS at December 31, 1998 and December 31, 1997.



<TABLE>
<CAPTION>
                                                                                         Minimum Required
                                                                Minimum Required            to be Well
                                                                  For Capital            Capitalized Under
                                           Actual              Adequacy Purposes         OTS Requirements
                               -----------------------------------------------------------------------------
                                     Amount       Ratio       Amount       Ratio        Amount       Ratio
                               -----------------------------------------------------------------------------
<S>                                 <C>            <C>        <C>           <C>        <C>            <C>  
As of December 31, 1998:
Tier 1 capital
  (to adjusted tangible assets)     $ 120,782       5.76%     $ 62,884       3.00%     $ 104,806       5.00%
Risk-based capital
  (to risk-based assets)              137,853      10.11       109,088       8.00        136,360      10.00
Tangible capital
  (to tangible assets)                120,782       5.76        31,442       1.50          N/A         N/A

As of December 31, 1997:
Tier 1 capital
  (to adjusted tangible assets)       111,009       5.79        57,538       3.00         95,897       5.00
Risk-based capital
  (to risk-based assets)              126,063      10.51        95,916       8.00        119,895      10.00
Tangible capital
  (to tangible assets)                111,009       5.79        28,769       1.50          N/A         N/A

</TABLE>



                                       21





<PAGE>   23



The OTS has proposed to increase the core capital ratio from the current 3.00%
to a range of 4.00% to 5.00% for all but the most healthy financial
institutions. The OTS also has proposed an interest rate risk calculation such
that an institution with a measured interest rate risk exposure, as defined,
greater than specified levels must deduct an interest rate risk component when
calculating the OTS risk-based capital. Final implementation of these proposals
was pending at December 31, 1998. Management does not believe these rules will
significantly impact the Bank's ability to meet the capital requirements.


The following table reconciles stockholder equity to regulatory capital at
December 31, 1998 and 1997 (dollars in thousands):


<TABLE>
<CAPTION>
                                                                    1998             1997
                                                                 ------------------------------
<S>                                                              <C>               <C>           
As of December 31, 1998:
Stockholders' equity of the Corporation                          $ 136,166         $ 129,005     
Less: Capitalization of the Corporation and Non-Bank                                            
  subsidiaries                                                     (12,733)          (15,352)   
                                                                 ---------         ---------    
Stockholders' equity of the Bank                                   123,433           113,653    
Less: Intangible assets and other non-includable assets             (2,653)           (2,644)   
                                                                 ---------         ---------    
Tier 1 and tangible capital                                        120,780           111,009    
Plus: Allowable general valuation allowances                        17,073            15,054    
                                                                 ---------         ---------    
Risk based capital                                               $ 137,853         $ 126,063    
                                                                 =========         =========    
</TABLE>



ASSET/LIABILITY MANAGEMENT

The primary function of asset and liability management is to provide liquidity
and maintain an appropriate balance between interest-earning assets and
interest-bearing liabilities within specified maturities and/or repricing dates.
Interest rate risk is the imbalance between interest-earning assets and
interest-bearing liabilities at a given maturity or repricing date, and is
commonly referred to as the interest rate gap (the "gap"). A positive gap exists
when there are more assets than liabilities maturing or repricing within the
same time frame. A negative gap occurs when there are more liabilities than
assets maturing or repricing within the same time frame. During a period of
rising interest rates, a negative gap over a particular period would tend to
adversely affect net interest income over such period, while a positive gap over
a particular period would tend to result in an increase in net interest income
over such period.

The Corporation's strategy for asset and liability management is to maintain an
interest rate gap that minimizes the impact of interest rate movements on the
net interest margin. As part of this strategy, the Corporation sells
substantially all new originations of long-term, fixed-rate, single-family
residential mortgage loans in the secondary market, invests in adjustable-rate
or medium-term, fixed-rate, single-family residential mortgage loans, invests in
medium-term mortgage-related securities and invests in consumer loans which
generally have shorter terms to maturity and higher and/or adjustable interest
rates.

The Corporation also originates multi-family residential and commercial real
estate loans, which generally have adjustable or floating interest rates and/or
shorter terms to maturity than conventional single-family residential loans.
Long-term, fixed-rate, single-family residential mortgage loans originated for
sale in the secondary market are generally committed for sale at the time the
interest rate is locked with the borrower. As such, these loans involve little
interest rate risk to the Corporation.

The calculation of a gap position requires management to make a number of
assumptions as to when an asset or liability will reprice or mature. Management
believes that its assumptions approximate actual experience and 




                                       22


<PAGE>   24



considers them reasonable, although the actual amortization and repayment of
assets and liabilities may vary substantially. There have been no material
changes in the Corporation's asset/liability structure or management strategies
and assumptions since the prior fiscal year ended March 31, 1998. The cumulative
net gap position at December 31, 1998 has not changed materially since March 31,
1998.



                                       23




<PAGE>   25





ITEM 3      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information contained in the section captioned "Management's Discussion and
Analysis - Asset/Liability Management" on pages 22 and 23 is incorporated herein
by reference.


                           PART II - OTHER INFORMATION

ITEM 1      LEGAL PROCEEDINGS.

The Bank is involved in routine legal proceedings occurring in the ordinary
course of business which, in the aggregate, are believed by management of the
Corporation to be immaterial to the financial condition and results of
operations of the Corporation.


ITEM 2      CHANGES IN SECURITIES.

            Not applicable.


ITEM 3      DEFAULTS UPON SENIOR SECURITIES.

            Not applicable.

ITEM 4      SUBMISSION OF MATTER TO VOTE OF SECURITIES HOLDERS.

            Not applicable.

ITEM 5      OTHER INFORMATION.

            None.

ITEM 6      EXHIBITS AND REPORTS.

       (a)  EXHIBIT NO. 27  FINANCIAL DATA SCHEDULES

       (b)  REPORTS ON FORM 8-K.

            On January 15, 1999, the Corporation filed a Current Report on
            Form 8-K to report, pursuant to Item 5 thereto, the announcement
            of a definitive agreement to merge FCB Financial Corp. with and
            into Anchor Bancorp.

 

                                       24


<PAGE>   26



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                  ANCHOR BANCORP WISCONSIN INC.



Date:            February 15, 1999            By: /s/ Douglas J. Timmerman
         ------------------------------           -----------------------------
                                                  Douglas J. Timmerman, Chairman
                                                  of the Board, President and
                                                  Chief Executive Officer




Date:            February 15, 1999            By: /s/ Michael W. Helser
         ------------------------------           -----------------------------
                                                  Michael W. Helser, Treasurer 
                                                  and Chief Financial Officer


                                       25