<PAGE>

                       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 September 30, 2004

                                       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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

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 October 31, 2004: 22,941,856

<PAGE>

                          ANCHOR BANCORP WISCONSIN INC.
                                INDEX - FORM 10-Q

<TABLE>
<CAPTION>
                                                                                                 PAGE #
                                                                                                 ------
<S>                                                                                              <C>
PART I - FINANCIAL INFORMATION

           Item 1         Financial Statements (Unaudited)

                                   Consolidated Balance Sheets as of September 30, 2004
                                   and March 31, 2004                                             2

                                   Consolidated Statements of Income for the Three and Six
                                   Months Ended September 30, 2004 and 2003                       3

                                   Consolidated Statements of Cash Flows for the Six Months
                                   Ended September 30, 2004 and 2003                              5

                                   Notes to Unaudited Consolidated Financial Statements           7

           Item 2         Management's Discussion and Analysis of Financial Condition and
                          Results of Operations                                                  16

                                   Results of Operations                                         17

                                   Financial Condition                                           22

                                   Asset Quality                                                 23

                                   Liquidity & Capital Resources                                 26

                                   Asset/Liability Management                                    29

                                   Consent Order                                                 29

           Item 3         Quantitative and Qualitative Disclosures About Market Risk             30

           Item 4         Controls and Procedures                                                30

PART II - OTHER INFORMATION

           Item 1         Legal Proceedings                                                      30
           Item 2         Unregistered Sales of Equity Securities and Use of Proceeds            31
           Item 3         Defaults upon Senior Securities                                        31
           Item 4         Submission of Matters to a Vote of Security Holders                    31
           Item 5         Other Information                                                      31
           Item 6         Exhibits                                                               32

SIGNATURES                                                                                       33
</TABLE>

                                       1
<PAGE>

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                                SEPTEMBER 30,     MARCH 31,
                                                                                    2004            2004
                                                                               ---------------------------------
                                                                               (In Thousands, Except Share Data)
<S>                                                                            <C>               <C>
ASSETS
Cash                                                                            $    56,097      $    65,938
Interest-bearing deposits                                                           117,561          133,055
                                                                                -----------      -----------
  Cash and cash equivalents                                                         173,658          198,993
Investment securities available for sale                                             58,654           29,514
Mortgage-related securities available for sale                                      207,762          220,918
Mortgage-related securities held to maturity (fair value of $3,288
  and $4,489, respectively)                                                           3,168            4,303
Loans receivable, net:

  Held for sale                                                                       7,057           14,578
  Held for investment                                                             3,231,826        3,066,812
Foreclosed properties and repossessed assets, net                                       760            2,422
Real estate held for development and sale                                            65,106           77,749
Office properties and equipment                                                      30,796           31,233
Federal Home Loan Bank stock--at cost                                                64,923           87,320
Accrued interest on investments and loans and other assets                           50,591           56,588
Goodwill                                                                             19,956           19,956
                                                                                -----------      -----------
     Total assets                                                               $ 3,914,257      $ 3,810,386
                                                                                ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits and advance payments by borrowers for taxes and insurance              $ 2,681,757      $ 2,609,686
Federal Home Loan Bank and other borrowings                                         846,139          831,559
Other liabilities                                                                    63,488           60,902
                                                                                -----------      -----------
     Total liabilities                                                            3,591,384        3,502,147
                                                                                -----------      -----------

Minority interest in real estate partnerships                                         6,514            6,691
                                                                                -----------      -----------
Preferred stock, $.10 par value, 5,000,000 shares
 authorized, none outstanding                                                             -                -
Common stock, $.10 par value, 100,000,000 shares authorized,
 25,364,339 shares issued, 23,028,606 and 22,954,535 shares outstanding,
 respectively                                                                         2,536            2,536
Additional paid-in capital                                                           68,537           67,926
Retained earnings                                                                   298,436          284,329
Accumulated other comprehensive income                                                1,274            2,670
Treasury stock (2,335,733 shares and 2,408,804 shares, respectively), at cost       (48,529)         (50,324)
Unearned deferred compensation                                                       (5,895)          (5,589)
                                                                                -----------      -----------
     Total stockholders' equity                                                     316,359          301,548
                                                                                -----------      -----------
     Total liabilities and stockholders' equity                                 $ 3,914,257      $ 3,810,386
                                                                                ===========      ===========
</TABLE>

See accompanying Notes to Unaudited Consolidated Financial Statements.

                                       2
<PAGE>

                      CONSOLIDATED STATEMENTS OF INCOME

                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED     SIX MONTHS ENDED
                                                                              SEPTEMBER 30,       SEPTEMBER 30,
                                                                         ------------------    ------------------
                                                                          2004       2003       2004       2003
                                                                         -------   --------    -------   --------
                                                                           (In Thousands, Except Per Share Data)
<S>                                                                      <C>       <C>         <C>       <C>
INTEREST INCOME:
Loans                                                                    $45,153   $ 43,570    $88,242   $ 87,683
Mortgage-related securities                                                2,075      2,211      4,263      5,081
Investment securities                                                      1,146      1,838      2,679      3,718
Interest-bearing deposits                                                    415        266        642        446
                                                                         -------   --------    -------   --------
  Total interest income                                                   48,789     47,885     95,826     96,928
INTEREST EXPENSE:
Deposits                                                                  12,028     13,879     23,845     28,401
Notes payable and other borrowings                                         7,146      6,424     14,160     12,485
                                                                         -------   --------    -------   --------
  Total interest expense                                                  19,174     20,303     38,005     40,886
                                                                         -------   --------    -------   --------
  Net interest income                                                     29,615     27,582     57,821     56,042
Provision for loan losses                                                    300        450        750        900
                                                                         -------   --------    -------   --------
  Net interest income after provision for loan losses                     29,315     27,132     57,071     55,142
NON-INTEREST INCOME:
Real estate investment partnership revenue                                15,143          -     38,879          -
Loan servicing income (loss)                                               1,039     (1,256)     1,518     (2,857)
Service charges on deposits                                                2,205      2,121      4,400      4,125
Insurance commissions                                                        611        544      1,245      1,168
Net gain on sale of loans                                                  1,592      1,411      1,891     11,260
Net gain (loss) on sale of investments and mortgage-related securities       529        (12)     1,397        340
Other revenue from real estate operations                                    881      3,295      2,019      3,933
Other                                                                        783      1,796      1,697      2,996
                                                                         -------   --------    -------   --------
  Total non-interest income                                               22,783      7,899     53,046     20,965
</TABLE>

                                       3
<PAGE>

                 CONSOLIDATED STATEMENTS OF INCOME (Cont'd)

                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                    THREE MONTHS ENDED   SIX MONTHS ENDED
                                                                       SEPTEMBER 30,       SEPTEMBER 30,
                                                                    ------------------  -----------------
                                                                      2004     2003      2004       2003
                                                                    -------   -------   -------   -------
                                                                    (In Thousands, Except Per Share Data)
<S>                                                                 <C>       <C>       <C>       <C>
NON-INTEREST EXPENSE:
Compensation                                                         10,869     9,276    20,737    19,664
Real estate investment partnership cost of sales                     11,067         -    30,778         -
Occupancy                                                             1,601     1,658     3,305     3,267
Furniture and equipment                                               1,603     1,352     2,986     2,800
Data processing                                                       1,168     1,125     2,444     2,299
Marketing                                                             1,009       792     2,016     1,582
Other expenses from real estate operations                            2,569         -     5,391         -
Other                                                                 3,114     2,652     5,770     5,393
                                                                    -------   -------   -------   -------
  Total non-interest expense                                         33,000    16,855    73,427    35,005
                                                                    -------   -------   -------   -------
Minority interest in income of real estate partnership operations     1,359         -     2,942         -
                                                                    -------   -------   -------   -------
  Income before income taxes                                         17,739    18,176    33,748    41,102
Income taxes                                                          7,057     6,976    12,469    15,809
                                                                    -------   -------   -------   -------
  Net income                                                        $10,682   $11,200   $21,279   $25,293
                                                                    =======   =======   =======   =======
Earnings per share:
  Basic                                                             $  0.47   $  0.49   $  0.94   $  1.09
  Diluted                                                              0.46      0.48      0.92      1.07
Dividends declared per share                                           0.13      0.11      0.24      0.21
</TABLE>

See accompanying Notes to Unaudited Consolidated Financial Statements.

                                       4
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              SIX MONTHS ENDED SEPTEMBER 30,
                                                                              ------------------------------
                                                                                 2004             2003
                                                                              ------------------------------
                                                                                      (IN THOUSANDS)
<S>                                                                           <C>               <C>
OPERATING ACTIVITIES
 Net income                                                                   $  21,279         $  25,293
 Adjustments to reconcile net income to net
  cash provided (used) by operating activities:
 Provision for loan losses                                                          750               900
 Provision for depreciation and amortization                                      2,203             1,667
 Net increase (decrease) due to origination and sale of loans held for sale       7,521            (6,157)
 Net gain on sales of loans                                                      (1,891)          (11,260)
 Amortization of stock benefit plans                                                 85                62
 Tax benefit from stock related compensation                                        611             1,451
 (Increase) decrease in accrued interest receivable                                (668)              530
 Decrease in accrued interest payable                                              (125)             (706)
 Increase (decrease) in accounts payable                                            135           (20,061)
 Other                                                                           16,669            12,573
                                                                              ---------         ---------
  Net cash provided by operating activities                                      46,569             4,292

INVESTING ACTIVITIES
 Proceeds from sales of investment securities available for sale                  2,352             3,293
 Proceeds from maturities of investment securities                               89,460           196,327
 Purchase of investment securities available for sale                          (120,556)         (274,336)
 Proceeds from sale of mortgage-related securities available for sale            12,869             4,535
 Purchase of mortgage-related securities available for sale                     (35,474)          (70,058)
 Principal collected on mortgage-related securities                              36,038           116,692
 Loans originated for investment                                               (946,630)         (931,537)
 Principal repayments on loans                                                  797,979           791,676
 Purchases of office properties and equipment                                    (1,613)           (2,720)
 Sales of office properties and equipment                                           210             2,312
 Sales of real estate                                                             4,077               645
 Investment in real estate held for development and sale                          8,416             1,934
                                                                              ---------         ---------
  Net cash used by investing activities                                        (152,872)         (161,237)

</TABLE>

                                       5
<PAGE>

                 CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont'd)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                          SIX MONTHS ENDED SEPTEMBER 30,
                                                                          ------------------------------
                                                                             2004             2003
                                                                          -------------------------------
                                                                                   (IN THOUSANDS)
<S>                                                                       <C>                  <C>
FINANCING ACTIVITIES
Increase in deposit accounts                                              $  59,648            $   5,165
 Increase in advance payments by borrowers
   for taxes and insurance                                                   12,423               11,642
 Proceeds from notes payable to Federal Home Loan Bank                       99,900              384,650
 Repayment of notes payable to Federal Home Loan Bank                       (77,200)            (264,500)
 (Decrease) increase  in other loans payable                                 (8,120)               6,028
 Treasury stock purchased                                                    (1,219)             (19,966)
 Exercise of stock options                                                      539                  761
Issuance of management and benefit plans                                        406                  888
 Payments of cash dividends to stockholders                                  (5,409)              (4,961)
                                                                          ---------            ---------
   Net cash provided by financing activities                                 80,968              119,707
                                                                          ---------            ---------
   Net decrease in cash and cash equivalents                                (25,335)             (37,238)
 Cash and cash equivalents at beginning of period                           198,993              141,427
                                                                          ---------            ---------
   Cash and cash equivalents at end of period                             $ 173,658            $ 104,189
                                                                          =========            =========

SUPPLEMENTARY CASH FLOW INFORMATION:
  Cash paid or credited to accounts:
  Interest on deposits and borrowings                                     $  37,880            $  41,416
  Income taxes                                                                9,257               20,211

</TABLE>

 See accompanying Notes to Unaudited Consolidated Financial Statements

                                       6
<PAGE>

                          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 fsb (the "Bank"), and Investment
Directions, Inc. ("IDI"). The Bank's accounts and results of operations include
its wholly-owned subsidiaries, Anchor Investment Services, Inc. ("AIS"), ADPC
Corporation ("ADPC") and Anchor Investment Corporation ("AIC"). Significant
inter-company balances and transactions have been eliminated. Investments in 50%
owned partnerships are treated as variable interest entities and are
consolidated into the Corporation's balance sheet and income statement.

NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America 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 unaudited consolidated financial statements have
been included.

In preparing the unaudited consolidated financial statements in conformity with
GAAP, management is required to make estimates and assumptions that affect the
amounts reported in the unaudited consolidated financial statements and
accompanying notes. Actual results could differ from those estimates. The
results of operations and other data for the six-month period ended September
30, 2004 are not necessarily indicative of results that may be expected for any
other interim period or the entire fiscal year ending March 31, 2005. 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,
2004.

Unrealized gains or losses on the Corporation's available-for-sale securities
are included in other comprehensive income. During the quarter ended September
30, 2004 and 2003, total comprehensive income amounted to $11.8 million and
$10.5 million, respectively. For the six months ended September 30, 2004 and
2003, comprehensive income was $19.9 million and $24.0 million, respectively.

The Corporation's investment in real estate held for investment and sale
includes 50% owned real estate partnerships which are considered variable
interest entities ("VIE's") and therefore subject to the requirements of
Financial Accounting Standards Interpretation No. 46, Consolidation of Variable
Interest Entities, an Interpretation of Accounting Research Bulletin No. 51
("FIN 46"). FIN 46 requires the consolidation of entities in which an enterprise
absorbs a majority of the entity's expected losses, receives a majority of the
entity's expected residual returns, or both, as a result of ownership,
contractual or other financial interests in the entity.

Real estate investment partnership revenue is presented in non-interest income
and represents revenue recognized upon the closing of sales of developed lots
and homes to independent third parties. Real estate investment partnership cost
of sales is included in non-interest expense and represents the costs of such
closed sales. Other revenue and other expenses from real estate operations are
also included in non-interest income and non-interest expense, respectively.

Minority interest in real estate partnerships represents the equity interests of
development partners in the real estate investment partnerships. The development
partners' share of income is reflected as minority interest in income of real
estate partnership operations. For all VIE's formed after February 1, 2003, the
balance sheets and statements of income must reflect prior period assets,
liabilities, income and expense. Since none of the Corporation's VIE's were
formed after February 1, 2003, no restatement of prior periods is required.

                                       7
<PAGE>

The Financial Accounting Standards Board ("FASB") issued SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure" in
December, 2002. SFAS No. 148 amended SFAS No. 123, "Accounting for Stock-Based
Compensation" to provide alternative methods of transition to the fair value
method of accounting for stock-based employee compensation. In addition, SFAS
No. 148 amended the disclosure provisions of SFAS No. 123 to require disclosure
in the summary of significant accounting policies of the effect of the Company's
accounting policy with respect to stock-based employee compensation on reported
net income and earnings per share in annual and interim financial statements.
SFAS No. 148's amendment of the transition and annual disclosure provisions of
SFAS No. 123 are effective for fiscal years ending after December 15, 2002. The
Corporation will continue to account for stock-based compensation in accordance
with APB Opinion 25 as allowed under FASB No. 123.

The Corporation applies APB Opinion No. 25 and related interpretations in
accounting for stock options. Accordingly, no compensation cost has been
recognized for its stock option plans. Had compensation cost for the
Corporation's stock option plans been determined based on the fair value at the
date of grant for awards under the stock option plans consistent with the method
of SFAS No. 123, the Corporation's net income and earnings per share would have
been reduced to the pro forma amounts indicated:

<TABLE>
<CAPTION>
                                                          SIX MONTHS ENDED
                                                           SEPTEMBER 30,
                                               ---------------------------------------
                                                  2004                       2003
                                               ---------------------------------------
                                                (In Thousands, Except Per Share Data)
<S>                                            <C>                          <C>
Net Income
  As reported                                  $ 21,279                     $ 25,293
  Pro forma                                      21,052                       25,109

Earnings per share-Basic
  As reported                                  $   0.94                     $   1.09
  Pro forma                                        0.93                         1.08

Earnings per share-Diluted
  As reported                                  $   0.92                     $   1.07
  Pro forma                                        0.91                         1.06
</TABLE>

The pro forma amounts indicated above may not be representative of the effects
on reported net income for future years. The fair values of stock options
granted in the six months ended September 30, 2004 and September 30, 2003 were
estimated on the date of grant using the Black-Scholes option-pricing model.

Certain 2003 accounts have been reclassified to conform to the 2004
presentations.

                                       8
<PAGE>

NOTE 3 - GOODWILL AND OTHER INTANGIBLE ASSETS

The Corporation's carrying value of goodwill was $20.0 million at September 30,
2004 and at March 31, 2004. Information regarding the Company's other intangible
assets follows:

<TABLE>
<CAPTION>
                                     SEPTEMBER 30, 2004                MARCH 31, 2004
                              -------------------------------   -------------------------------
                              CARRYING  ACCUMULATED             CARRYING  ACCUMULATED
                               AMOUNT   AMORTIZATION   NET       AMOUNT   AMORTIZATION    NET
                              -------------------------------   -------------------------------
                                                         (In Thousands)
<S>                           <C>         <C>         <C>       <C>         <C>         <C>
Other intangible assets:
  Core deposit premium        $ 3,408     $2,655      $   753   $ 3,408     $ 2,229     $ 1,179
  Mortgage servicing rights    17,195      3,828       13,367    21,613       9,325      12,288
                              -------     ------      -------   -------     -------     -------
  Total                       $20,603     $6,483      $14,120   $25,021     $11,554     $13,467
                              =======     ======      =======   =======     =======     =======
</TABLE>

The projections of amortization expense for mortgage servicing rights and core
deposit premium set forth below are based on asset balances and the interest
rate environment as of September 30, 2004. Future amortization expense may be
significantly different depending upon changes in the mortgage servicing
portfolio, mortgage interest rates and market conditions.

The following table shows the current period and estimated future amortization
expense for amortized intangible assets:

<TABLE>
<CAPTION>
                                                       MORTGAGE   CORE
                                                      SERVICING  DEPOSIT
                                                        RIGHTS   PREMIUM    TOTAL
                                                      ---------  -------   --------
                                                             (In Thousands)
<S>                                                   <C>        <C>       <C>
Quarter ended September 30, 2004 (actual)             $ 1,100    $ 213     $ 1,313

Estimate for the year ended March 31,
                                    2005                2,700      639        3,339
                                    2006                5,400      114        5,514
                                    2007                2,634        -        2,634
                                    2008                2,633        -        2,633
                                                      -------    -----     --------
                                                      $13,367    $ 753     $ 14,120
                                                      =======    =====     ========
</TABLE>

NOTE 4 - STOCKHOLDERS' EQUITY

During the quarter ended September 30, 2004, options for 74,381 shares of common
stock were exercised at a weighted-average price of $8.19 per share. Treasury
shares were issued in exchange for the options using the last-in-first-out
method. The cost of the treasury shares issued in excess of the option price
paid of $1,248,000 was charged to retained earnings. During the quarter ended
September 30, 2004, the Corporation issued 18,364 shares of treasury stock to
the Corporation's retirement plans. The weighted-average cost of these shares
was $22.05 per share or $404,800 in the aggregate and the cost of the treasury
shares issued in excess of the market price of $6,000 was charged to retained
earnings. On August 13, 2004, the Corporation paid a cash dividend of $0.125 per
share, amounting to $2.88 million, in the aggregate.

                                       9
<PAGE>

NOTE 5 - EARNINGS PER SHARE

Basic earnings per share for the three and six months ended September 30, 2004
and 2003 have been determined by dividing net income for the respective periods
by the weighted average number of shares of common stock outstanding. Diluted
earnings per share is computed by dividing net income by the weighted average
number of common shares outstanding plus common stock equivalents. Common stock
equivalents are computed using the treasury stock method.

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED SEPTEMBER 30,
                                                  --------------------------------
                                                      2004             2003
                                                  --------------------------------
<S>                                               <C>              <C>
Numerator:
       Net income                                 $10,681,927      $11,199,665
                                                  -----------      -----------
       Numerator for basic and diluted earnings
         per share--income available to common
         stockholders                             $10,681,927      $11,199,665

Denominator:
       Denominator for basic earnings per
         share--weighted-average shares            22,671,470       23,052,139
       Effect of dilutive securities:
         Employee stock options                       447,303          501,194
         Management Recognition Plans                   5,071           14,700
       Denominator for diluted earnings per
         share--adjusted weighted-average
                                                  -----------      -----------
         shares and assumed conversions            23,123,844       23,568,033
                                                  ===========      ===========
Basic earnings per share                          $      0.47      $      0.49
                                                  ===========      ===========
Diluted earnings per share                        $      0.46      $      0.48
                                                  ===========      ===========
</TABLE>

<TABLE>
<CAPTION>
                                                  SIX MONTHS ENDED SEPTEMBER 30,
                                                  ------------------------------
                                                     2004             2003
                                                  ------------------------------
<S>                                               <C>              <C>
Numerator:
       Net income                                 $21,279,125      $25,292,683
                                                  -----------      -----------
       Numerator for basic and diluted earnings
         per share--income available to common
         stockholders                             $21,279,125      $25,292,683

Denominator:

       Denominator for basic earnings per
         share--weighted-average shares            22,634,407       23,138,969
       Effect of dilutive securities:
         Employee stock options                       461,082          515,585
         Management Recognition Plans                   5,072           14,663
       Denominator for diluted earnings per
         share--adjusted weighted-average
                                                  -----------      -----------
         shares and assumed conversions            23,100,561       23,669,217
                                                  ===========      ===========
Basic earnings per share                          $      0.94      $      1.09
                                                  ===========      ===========
Diluted earnings per share                        $      0.92      $      1.07
                                                  ===========      ===========
</TABLE>

                                       11
<PAGE>

NOTE 6 - SEGMENT INFORMATION

According to the materiality thresholds of SFAS No. 131, the Corporation is
required to report each operating segment based on materiality thresholds of ten
percent or more of certain amounts, such as revenue. Additionally, the
Corporation is required to report separate operating segments until the revenue
attributable to such segments is at least 75 percent of total consolidated
revenue. SFAS No. 131 allows the Corporation to combine operating segments, even
though they may be individually material, if the segments have similar basic
characteristics in the nature of the products, production processes, and type or
class of customer for products or services. Based on the above criteria, the
Corporation has two reportable segments.

COMMUNITY BANKING: This segment is the main basis of operation for the
Corporation and includes the branch network and other deposit support services;
origination, sales and servicing of one-to-four family loans; origination of
multifamily, commercial real estate and business loans; origination of a variety
of consumer loans; and sales of alternative financial investments such as tax
deferred annuities.

REAL ESTATE INVESTMENTS: The Corporation's non-banking subsidiary, IDI, and its
subsidiary, NIDI, invest in limited partnerships in real estate developments.
Such developments include recreational residential developments and industrial
developments (such as office parks).

The following represents reconciliations of reportable segment revenues, profit
or loss, and assets to the Corporation's consolidated totals for the three and
six months ended September 30, 2004 and 2003, respectively.

                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED SEPTEMBER 30, 2004
                                                               ---------------------------------------------------
                                                                                 (IN THOUSANDS)
                                                                                                        CONSOLIDATED
                                                               REAL ESTATE   COMMUNITY   INTERSEGMENT    FINANCIAL
                                                               INVESTMENTS    BANKING    ELIMINATIONS   STATEMENTS
                                                               -----------  -----------  ------------   -----------
<S>                                                            <C>          <C>          <C>            <C>
Interest income                                                 $     57    $    49,181    $(449)       $    48,789
Interest expense                                                     501         19,122     (449)            19,174
                                                                --------    -----------    -----        -----------
  Net interest income (loss)                                        (444)        30,059        -             29,615
Provision for loan losses                                              -            300        -                300
                                                                --------    -----------    -----        -----------
  Net interest income (loss) after provision for loan losses        (444)        29,759        -             29,315
Real estate investment partnership revenue                        15,143              -        -             15,143
Other revenue from real estate operations                            881              -        -                881
Other income                                                           -          6,819      (60)             6,759
Real estate investment partnership cost of sales                 (11,067)             -        -            (11,067)
Other expense from real estate partnership operations             (2,569)             -        -             (2,569)
Minority interest in income of real estate partnerships           (1,359)             -        -             (1,359)
Other expense                                                          -        (19,424)      60            (19,364)
                                                                --------    -----------    -----        -----------
  Income before income taxes                                         585         17,154        -             17,739
Income tax expense                                                   205          6,852        -              7,057
                                                                --------    -----------    -----        -----------
  Net income                                                    $    380    $    10,302    $   -        $    10,682
                                                                ========    ===========    =====        ===========

Total Assets                                                    $ 74,447    $ 3,839,810    $   -        $ 3,914,257

</TABLE>

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED SEPTEMBER 30, 2004
                                                               ---------------------------------------------------
                                                                                 (IN THOUSANDS)
                                                                                                        CONSOLIDATED
                                                               REAL ESTATE   COMMUNITY   INTERSEGMENT    FINANCIAL
                                                               INVESTMENTS    BANKING    ELIMINATIONS   STATEMENTS
                                                               -----------  -----------  ------------   -----------
<S>                                                            <C>          <C>          <C>            <C>
Interest income                                                  $   120     $   47,885   $      (120)  $   47,885
Interest expense                                                      57         20,303           (57)      20,303
                                                                 -------     ----------   -----------   ----------
  Net interest income                                                 63         27,582           (63)      27,582
Provision for loan losses                                              -            450             -          450
                                                                 -------     ----------   -----------   ----------
  Net interest income after provision for loan losses                 63         27,132           (63)      27,132
Other income                                                       7,941          4,604        (4,646)       7,899
Other expense                                                      4,709         16,855        (4,709)      16,855
                                                                 -------     ----------   -----------   ----------
  Income before income taxes                                       3,295         14,881             -       18,176
Income tax expense                                                 1,203          5,773             -        6,976
                                                                 -------     ----------   -----------   ----------
  Net income                                                     $ 2,092     $    9,108   $         -   $   11,200
                                                                 =======     ==========   ===========   ==========

Total assets                                                     $42,184     $3,619,374                 $3,661,558
</TABLE>

                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                       SIX MONTHS ENDED SEPTEMBER 30, 2004
                                                               ----------------------------------------------------
                                                                                 (IN THOUSANDS)
                                                                                                        CONSOLIDATED
                                                               REAL ESTATE   COMMUNITY   INTERSEGMENT    FINANCIAL
                                                               INVESTMENTS    BANKING    ELIMINATIONS   STATEMENTS
                                                               -----------  -----------  ------------   -----------
<S>                                                            <C>          <C>          <C>            <C>
Interest income                                                 $    187    $    96,142     $(503)      $    95,826
Interest expense                                                     639         37,869      (503)           38,005
                                                                --------    -----------     -----       -----------
  Net interest income (loss)                                        (452)        58,273         -            57,821
Provision for loan losses                                              -            750         -               750
                                                                --------    -----------     -----       -----------

  Net interest income (loss) after provision for loan losses        (452)        57,523         -            57,071
Real estate investment partnership revenue                        38,879              -         -            38,879
Other revenue from real estate operations                          2,019              -         -             2,019
Other income                                                           -         12,208       (60)           12,148
Real estate investment partnership cost of sales                 (30,778)             -         -           (30,778)
Other expense from real estate partnership operations             (5,451)             -        60            (5,391)
Minority interest in income of real estate partnerships           (2,942)             -         -            (2,942)
Other expense                                                          -        (37,258)        -           (37,258)
                                                                --------    -----------     -----       -----------
  Income before income taxes                                       1,275         32,473         -            33,748
Income tax expense                                                   534         11,935         -            12,469
                                                                --------    -----------     -----       -----------
  Net income                                                    $    741    $    20,538     $   -       $    21,279
                                                                ========    ===========     =====       ===========

Total Assets                                                    $ 74,447    $ 3,839,810     $   -       $ 3,914,257
</TABLE>

<TABLE>
<CAPTION>
                                                                       SIX MONTHS ENDED SEPTEMBER 30, 2004
                                                               ----------------------------------------------------
                                                                                 (IN THOUSANDS)
                                                                                                        CONSOLIDATED
                                                               REAL ESTATE   COMMUNITY   INTERSEGMENT    FINANCIAL
                                                               INVESTMENTS    BANKING    ELIMINATIONS   STATEMENTS
                                                               -----------  -----------  ------------   -----------
<S>                                                            <C>          <C>          <C>            <C>
Interest income                                                 $   142      $   96,928   $      (142)  $    96,928
Interest expense                                                     89          40,884           (87)       40,886
                                                                -------      ----------   -----------   -----------
  Net interest income                                                53          56,044           (55)       56,042
Provision for loan losses                                             -             900             -           900
                                                                -------      ----------   -----------   -----------
  Net interest income after provision for loan losses                53          55,144           (55)       55,142
Other income                                                     11,452          17,032        (7,519)       20,965
Other expense                                                     7,572          35,007        (7,574)       35,005
                                                                -------      ----------   -----------   -----------
  Income before income taxes                                      3,933          37,169             -        41,102
Income tax expense                                                1,440          14,369             -        15,809
                                                                -------      ----------   -----------   -----------
  Net income                                                    $ 2,493      $   22,800   $         -   $    25,293
                                                                =======      ==========   ===========   ===========

Total assets                                                    $42,184      $3,619,374                 $ 3,661,558
</TABLE>

                                       14
<PAGE>

NOTE 7 - REGULATORY ACTION

In September 2004, the Board of Directors of the Bank entered into a Stipulation
and Consent to the Issuance of an Order to Cease and Desist for Affirmative
Relief with the Office of Thrift Supervision ("OTS") and the OTS issued a
Consent Order to Cease and Desist for Affirmative Relief ("Consent Order").
Under the Consent Order, the Bank's board of directors has agreed, among other
things, to take a range of actions with respect to the review and conduct of its
Bank Secrecy Act ("BSA") compliance activities. The Bank remains subject to the
possibility of additional governmental actions with regard to these matters,
including potential monetary penalties. The Bank is actively engaged in the
process of addressing the issues related to the Consent Order, including
reviewing and strengthening its BSA compliance process, and has taken a number
of actions in this regard which are in addition to those required by the OTS.
The Corporation expects that it will experience an increase in its operating
costs in connection with addressing matters related to the Consent Order but
cannot quantify the amount of the increases.

NOTE 8 - SUBSEQUENT EVENTS

On October 22, 2004, the Corporation declared a $0.125 per share cash dividend
on its common stock, amounting to $2.87 million in the aggregate, to be paid on
November 15, 2004 to stockholders of record on November 1, 2004.

                                       15
<PAGE>

                          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. 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 Board, 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. In
addition, acquisitions may result in large one-time charges to income, may not
produce revenue enhancements or cost savings at levels or within time frames
originally anticipated and may result in unforeseen integration difficulties.
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.

SIGNIFICANT ACCOUNTING POLICIES

      There are a number of accounting policies that require the use of
judgment. Some of the more significant policies are as follows:

-     Establishing the amount of the allowance for loan losses requires the use
      of judgment as well as other systematic objective and quantitative
      methods. The loan portfolio, foreclosed properties, and repossessed assets
      are evaluated on a continuous basis to determine the necessity for
      additions to the allowances for losses and the related balance in the
      allowances. These evaluations consider several factors including, but not
      limited to, general economic conditions, collateral value, loan portfolio
      composition, loan delinquencies, prior loss experience, anticipated loss
      of interest and losses inherent in the portfolio. The evaluation of the
      allowance for loan losses includes a review of known loan problems as well
      as potential loan problems based upon historical trends and ratios. To
      determine the level and composition of the loan loss allowance, the loan
      portfolio is broken out by categories of single-family residential,
      multi-family residential, commercial real estate, construction and land,
      consumer and commercial business. These categories are then further
      divided into performing and substandard, which includes performing and
      non-performing groups of loans. A five-year historical trend is applied to
      each category of performing loans to arrive at the appropriate levels of
      loss reserves for those respective categories based on the ratio of loss
      history to overall balance in each respective loan category. The
      non-performing groups are analyzed using the trends of the current year in
      which they are being evaluated. For commercial business loans, a
      three-year historical trend is applied since that category has shown
      significant growth both in terms of overall balance and loss history
      associated with that growth. The Corporation has allocated all of its
      allowance for loan losses to specific categories as a result of more
      precise analysis of loan portfolio performance. Also, within specific loan
      categories, certain loans may be identified for specific reserve
      allocations as well as the whole category of that loan type being reviewed
      for a calculated general reserve based on the foregoing analysis of trends
      and overall balance growth within that category.

                                       16
<PAGE>

-     Valuation of mortgage servicing rights requires the use of judgment.
      Mortgage servicing rights are established on loans that are originated and
      subsequently sold with servicing rights retained. A portion of the loan's
      book basis to mortgage servicing rights is allocated when a loan is sold.
      The fair value of mortgage servicing rights is the present value of
      estimated future net cash flows from the servicing relationship using
      current market assumptions for prepayments, servicing costs and other
      factors. As the loans are repaid and net servicing revenue is earned,
      mortgage servicing rights are amortized into expense. Net servicing
      revenues are expected to exceed this amortization expense. However, if
      actual prepayment experience exceeds what was originally anticipated, net
      servicing revenues may be less than expected and mortgage servicing rights
      may be impaired.

-     Judgment is also used in the valuation of other intangible assets (core
      deposit intangibles). Core deposit intangibles have been recorded for core
      deposits (defined as checking, money market and savings deposits) that
      have been acquired in acquisitions that were accounted for as purchase
      business combinations. The core deposit intangible assets have been
      recorded using the assumption that they provide a more favorable source of
      funding than more expensive wholesale borrowings. An intangible asset has
      been recorded for the present value of the difference between the expected
      interest to be incurred on these deposits and interest expense that would
      be expected if these deposits were replaced by wholesale borrowings, over
      the expected lives of the core deposits. The current estimate of the
      underlying lives of the core deposits is seven to fifteen years. If it is
      determined that these deposits have a shorter life, the asset will be
      adjusted to reflect an expense associated with the amount that is
      impaired.

-     Goodwill is reviewed at least annually for impairment, which requires
      judgment. Goodwill has been recorded as a result of an acquisition in
      which purchase price exceeded fair value of net assets acquired. The price
      paid for the acquisition is analyzed and compared to a number of current
      indices. If goodwill is determined to be impaired, it would be expensed in
      the period in which it became impaired.

Set forth below is management's discussion and analysis of the Corporation's
financial condition and results of operations for the three and six months ended
September 30, 2004, which includes information on the Corporation's
asset/liability management strategies, sources of liquidity and capital
resources. This discussion should be read in conjunction with the unaudited
consolidated financial statements and supplemental data contained elsewhere in
this report.

RESULTS OF OPERATIONS

General. Net income for the three and six months ended September 30, 2004
decreased $520,000 to $10.7 million from $11.2 million and decreased $4.0
million to $21.3 million from $25.3 million, respectively, for the same periods
in the prior year. The decrease in net income for the three-month period
compared to the same period last year was largely due to a net decrease in other
revenue from real estate operations of $2.3 million, an increase in compensation
expense of $1.6 million and a decrease in other non-interest income of $1.0
million, which were partially offset by an increase in loan servicing income of
$2.3 million and an increase in net interest income of $2.0 million. The
decrease in net income for the six-month period compared to the same period last
year was largely due to a decrease in net gain on sale of loans of $9.4 million
and a decrease in net other revenue from real estate operations of $2.1 million,
which were partially offset by an increase in loan servicing income of $4.4
million and a decrease in income tax expense of $3.3 million.

Net Interest Income. Net interest income increased $2.0 million and $1.8 million
for the three and six months ended September 30, 2004, respectively, as compared
to the same respective periods in the prior year. Interest income increased
$900,000 and decreased $1.1 million for the three and six months ended September
30, 2004 as compared to the same respective periods in the prior year. Interest
expense decreased $1.1 million and $2.9 million for the three and six months
ended September 30, 2004 as compared to the same respective periods in the prior
year. The net interest margin decreased to 3.25% for the three-month period
ended September 30, 2004 from 3.26% in the same period in the prior year, and
decreased to 3.19% for the six-month period ended September 30, 2004 from 3.35%
in the same period in the prior year. The decreases in the net interest margin
reflected decreases in yields on loans as interest rates continue to decrease,
which more than offset decreases in the cost of funds. The interest rate

                                       17
<PAGE>

spread decreased to 3.13% from 3.20% for the three-month period and decreased to
3.09% from 3.28% for the six-month period ended September 30, 2004 as compared
to the same respective periods in the prior year.

Interest income on loans increased $1.6 million and $560,000, respectively, for
the three and six months ended September 30, 2004, respectively, as compared to
the same respective periods in the prior year. These increases were primarily
attributable to an increase in the average balance of loans, which increased
$322.8 million and $314.2 million in the three and six months ended September
30, 2004, respectively, as compared to the same respective periods in the prior
year. These increases more than offset a decrease of 42 basis points in the
average yield on loans to 5.66% from 6.08% for the respective three-month period
and a decrease of 58 basis points to 5.58% from 6.16% for the respective
six-month period. Interest income on mortgage-related securities decreased
$140,000 and $820,000, respectively for the three- and six-month periods ended
September 30, 2004, as compared to the same periods in the prior year, primarily
due to a decrease of $7.4 million and $13.5 million, respectively, in the
three-month and six-month average balances of mortgage-related securities. These
decreases were also due to a decrease of 11 basis points in the average yield on
mortgage-related securities to 4.02% from 4.13% for the three-month period and a
decrease of 49 basis points to 4.00% from 4.49% for the six-month period. In
addition, interest income on investment securities (including Federal Home Loan
Bank stock) decreased $690,000 and $1.0 million, respectively, for the three-
and six-month periods ended September 30, 2004, as compared to the same
respective periods in the prior year. This was primarily a result of a decrease
of $80.6 million and $62.6 million, respectively, in the average balance of
investment securities for the three- and six-month period ended September 30,
2004, as compared to the same respective periods in 2003. Interest income on
interest-bearing deposits increased $150,000 and $200,000, respectively, for the
three and six months ended September 30, 2004, as compared to the same periods
in 2003, primarily due to increases in average balances

Interest expense on deposits decreased $1.9 million and $4.6 million for the
three and six months ended September 30, 2004, respectively, as compared to the
same respective periods in 2003. These decreases were due to a decrease of 29
basis points in the weighted average cost of deposits to 1.80% from 2.09% and a
decrease of 37 basis points to 1.79% from 2.16% for the respective three- and
six-month periods. Interest expense on notes payable and other borrowings
increased $720,000 and $1.7 million, respectively, during the three and six
months ended September 30, 2004, as compared to the same respective periods in
the prior year due primarily to an increase of $125.6 million and $169.0
million, respectively, in the average balance of notes payable and other
borrowings for the three- and six-month periods ended September 30, 2004,
respectively, as compared to the same respective periods in 2003.

Provision for Loan Losses. Provision for loan losses decreased $150,000 for the
three- and six-month periods period ended September 30, 2004, respectively, as
compared to the same respective periods for the prior year. The provisions were
based on management's ongoing evaluation of asset quality and pursuant to a
policy to maintain an allowance for losses at a level which management believes
is adequate to absorb future charge-offs of loans deemed uncollectible.

Average Interest-Earning Assets, Average Interest-Bearing Liabilities and
Interest Rate Spread. The tables on the following pages show the Corporation's
average balances, interest, average rates, net interest margin 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.

                                       18
<PAGE>

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED SEPTEMBER 30,
                                                   ----------------------------------------------------------------------------
                                                                   2004                                    2003
                                                   -------------------------------------    -----------------------------------
                                                                                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                                     $ 2,462,223    $  34,437        5.59%    $  2,214,691  $  33,557       6.06%
Consumer loans                                         558,793        8,336        5.97          514,157      8,043       6.26
Commercial business loans                              168,266        2,380        5.66          137,623      1,970       5.73
                                                   -----------    ---------                 ------------  ---------
  Total loans receivable                             3,189,282       45,153        5.66        2,866,471     43,570       6.08
Mortgage-related securities                            206,656        2,075        4.02          214,033      2,211       4.13
Investment securities                                   52,117          277        2.13          113,435        494       1.74
Interest-bearing deposits                              135,425          415        1.23          106,035        266       1.00
Federal Home Loan Bank stock                           64,474           869        5.39          83,791       1,344       6.42
                                                   -----------    ---------                 ------------  ---------
  Total interest-earning assets                      3,647,954       48,789        5.35        3,383,765     47,885       5.66
                                                                                   ----                                   ----
Non-interest-earning assets                            161,370                                   264,595
                                                   -----------                              ------------
  Total assets                                     $ 3,809,324                              $  3,648,360
                                                   ===========                              ============

INTEREST-BEARING LIABILITIES
Demand deposits                                    $   736,356          949        0.52     $    807,294        797       0.39
Regular passbook savings                               258,353          285        0.44          230,740        275       0.48
Certificates of deposit                              1,681,790       10,794        2.57        1,618,272     12,807       3.17
                                                   -----------    ---------                 ------------  ---------
  Total deposits                                     2,676,499       12,028        1.80        2,656,306     13,879       2.09
Notes payable and other borrowings                     774,676        7,146        3.69          649,063      6,424       3.96
                                                   -----------    ---------                 ------------  --------
  Total interest-bearing liabilities                 3,451,175       19,174        2.22        3,305,369     20,303       2.46
                                                                                   -----                                  ----
Non-interest-bearing liabilities                        45,880                                    46,633
                                                   -----------                              ------------
  Total liabilities                                  3,497,055                                 3,352,002
Stockholders' equity                                   312,269                                   296,358
                                                   -----------                              ------------
  Total liabilities and stockholders' equity       $ 3,809,324                              $  3,648,360
                                                   ===========                              ============

  Net interest income/interest rate spread                        $  29,615        3.13%                  $  27,582       3.20%
                                                                  =========        ====                   =========        ====
  Net interest-earning assets                      $   196,779                              $     78,396
                                                   ===========                              ============
  Net interest margin                                                              3.25%                                  3.26%
                                                                                   ====                                   ====
  Ratio of average interest-earning assets
   to average interest-bearing liabilities                1.06                                      1.02
                                                   ===========                              ============
</TABLE>

-------------
(1) Annualized

                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                                          SIX MONTHS ENDED SEPTEMBER 30,
                                                   ----------------------------------------------------------------------------
                                                                   2004                                    2003
                                                   -------------------------------------    -----------------------------------
                                                                                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                                     $ 2,443,776    $  67,313        5.51%    $  2,199,027  $  67,441      6.13%
Consumer loans                                         552,821       16,328        5.91          511,397     16,234      6.35
Commercial business loans                              164,661        4,601        5.59          136,592      4,008      5.87
                                                   -----------    ---------                 ------------  ---------
  Total loans receivable                             3,161,258       88,242        5.58        2,847,016     87,683      6.16
Mortgage-related securities                            212,940        4,263        4.00          226,442      5,081      4.49
Investment securities                                   56,832          547        1.92          112,428      1,019      1.81
Interest-bearing deposits                              118,873          642        1.08           79,751        446      1.12
Federal Home Loan Bank stock                            76,119        2,132        5.60           83,153      2,699      6.49
                                                   -----------    ---------                 ------------  --------
  Total interest-earning assets                      3,626,022       95,826        5.29        3,348,790     96,928      5.79
                                                                                   ----                                  ----
Non-interest-earning assets                            191,975                                   250,240
                                                   -----------                              ------------
  Total assets                                     $ 3,817,997                              $  3,599,030
                                                   ===========                              ============

INTEREST-BEARING LIABILITIES
Demand deposits                                    $   736,597        1,703        0.46     $    792,468      1,760      0.44
Regular passbook savings                               253,329          547        0.43          222,611        568      0.51
Certificates of deposit                              1,676,896       21,595        2.58        1,618,463     26,073      3.22
                                                   -----------    ---------                 ------------  ---------
  Total deposits                                     2,666,822       23,845        1.79        2,633,542     28,401      2.16
Notes payable and other borrowings                     795,192       14,160        3.56          626,189     12,485      3.99
                                                   -----------    ---------                 ------------  ---------
  Total interest-bearing liabilities                 3,462,014       38,005        2.20        3,259,731     40,886      2.51
                                                                                   ----                                  ----
Non-interest-bearing liabilities                        47,331                                    46,288
                                                   -----------                              ------------
  Total liabilities                                  3,509,345                                 3,306,019
Stockholders' equity                                   308,652                                   293,011
                                                   -----------                              ------------
  Total liabilities and stockholders' equity       $ 3,817,997                              $  3,599,030
                                                   ===========                              ============

  Net interest income/interest rate spread                        $  57,821        3.09%                  $  56,042      3.28%
                                                                  =========        ====                   =========      ====
  Net interest-earning assets                      $   164,008                              $     89,059
                                                   ===========                              ============
  Net interest margin                                                              3.19%                                 3.35%
                                                                                   ====                                  ====
  Ratio of average interest-earning assets
   to average interest-bearing liabilities                1.05                                      1.03
                                                   ===========                              ============
</TABLE>

--------------
(1) Annualized

                                       20
<PAGE>

Non-Interest Income. Non-interest income increased to $22.8 million and $53.0
million for the three and six months ended September 30, 2004, respectively, as
compared to $7.9 million and $21.0 million for the same respective periods in
2003, primarily due to the implementation of FIN 46 in the quarter ended
December 31, 2003. This resulted in the addition of real estate investment
partnership revenue of $15.1 million and $38.9 million for the three- and
six-month periods ended September 30, 2004, respectively, and in decreased other
revenue from real estate operations of $2.4 million and $1.9 million for the
three and six months ended September 30, 2004, respectively. Exclusive of the
effects of FIN 46, non-interest income decreased $110,000 for the three-month
period ended September 30, 2004, as compared to the same period in the prior
year, primarily as a result of a decrease in other non-interest income of $1.0
million and a decrease in other revenue from real estate operations of $2.3
million for the three-month period ended September 30, 2004, as compared to the
same period in the prior year. These decreases were partially offset by an
increase in loan servicing income of $2.3 million and a net gain on sale of
investments and mortgage-related securities of $540,000. In addition, net gain
on sale of loans increased $180,000, service charges on deposits increased
$80,000 and insurance commissions increased $70,000 for the three months ended
September 30, 2004, as compared to the same period in the prior year. Exclusive
of the effects of FIN 46, non-interest income decreased $7.0 million for the
six-month period ended September 30, 2004, as compared to the same period in the
prior year, primarily as a result of a decrease in net gain on sale of loans of
$9.4 million. The decrease in the gain on sale of loans was primarily due to the
rising interest rate environment, which resulted in significantly lower levels
of refinancing activity. In addition, other non-interest income, which includes
a variety of loan fee and other miscellaneous fee income, decreased $1.3 million
and other revenue from real estate operations decreased $2.1 million during the
six months ended September 30, 2004, as compared to the same period in the prior
year. These decreases were partially offset by an increase in loan servicing
income of $4.4 million, due primarily to decreased amortization of mortgage
servicing rights, which resulted from decreases in loan sales and mortgage loan
refinancings in the rising interest rate environment. Also partially offsetting
the decreases were an increase in net gain on sale of investments and
mortgage-related securities of $1.1 million, an increase in service charges on
deposits of $280,000 and an increase in insurance commissions of $80,000 for the
six-month period ended September 30, 2004.

Non-Interest Expense. Non-interest expense increased to $33.0 million and $73.4
million for the three and six months ended September 30, 2004, respectively, as
compared to $16.9 million and $35.0 million for the same respective periods in
2003, primarily due to the implementation of FIN 46 in the quarter ended
December 31, 2003. This resulted in the addition of real estate investment
partnership cost of sales of $11.1 million and $30.8 million for the three- and
six-month periods ended September 30, 2004, respectively, as compared to the
same respective periods in the prior year, and other expenses from real estate
operations of $2.6 million and $5.4 million for the three and six months ended
September 30, 2004, respectively, as compared to the same respective periods in
the prior year. Exclusive of the effects of FIN 46, non-interest expense
increased $2.5 million for the three-month period ended September 30, 2004,
primarily as a result of an increase in compensation expense of $1.6 million,
resulting primarily from increased employee benefits, and an increase of
$460,000 in other non-interest expense. In addition, furniture and equipment
expense increased $250,000, marketing expense increased $220,000 and data
processing expense increased $40,000 for the three months ended September 30,
2004 as compared to the same period in the prior year. These increases were
partially offset by a decrease in occupancy expense of $60,000 for the
three-month period. Exclusive of the effects of FIN 46, non-interest expense
increased $2.3 million for the six-month period ended September 30, 2004,
primarily as a result of an increase in compensation expense of $1.1 million
primarily resulting from increased employee benefits, an increase in marketing
expense of $430,000 and an increase in other non-interest income of $380,000. In
addition, furniture and equipment expense increased $190,000, data processing
expense increased $150,000, and occupancy expense increased $40,000 for the six
months ended September 30, 2004 as compared to the same period in the prior
year.

Income Taxes. Income tax expense increased $80,000 and decreased $3.3 million,
respectively, during the three and six months ended September 30, 2004, as
compared to the same respective periods in 2003. The decrease for the six- month
period was the result of a decrease in income before income tax of $7.4 million
to $33.7 million for the six months ended September 30, 2004, as compared to
$41.1 million for the same period in the prior year. The effective tax rate was
39.8% and 37.0%, for the three-and six-month periods ended September 30, 2004,
respectively, as compared to 38.4% and 38.5% for the same respective periods
last year.

                                       21
<PAGE>

FINANCIAL CONDITION

During the six months ended September 30, 2004, the Corporation's assets
increased by $103.9 million from $3.81 billion at March 31, 2004 to $3.91
billion. The majority of this increase was attributable to an increase in loans
and investments, which were partially offset by decreases in other categories
such as mortgage-related securities, real estate held for development and
Federal Home Loan Bank stock.

Total loans (including loans held for sale) increased $157.5 million during the
six months ended September 30, 2004. Activity for the period consisted of (i)
originations and purchases of $1.34 billion, (ii) sales of $402.3 million, and
(iii) principal repayments and other adjustments of $780.2 million.

Mortgage-related securities (both available for sale and held to maturity)
decreased $14.3 million during the six months ended September 30, 2004 as a
result of principal repayments and market value adjustments of $36.9 million and
sales of $12.9 million. These decreases were partially offset by purchases of
$35.5 million of mortgage-related securities in this six-month period.
Mortgage-related securities consisted of $111.3 million of mortgage-backed
securities and $99.6 million of collateralized mortgage obligations ("CMO's")
and real estate mortgage investment conduits ("REMIC's") at September 30, 2004.

The Corporation invests in corporate CMOs and agency-issued REMICs. 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.

Investment securities increased $29.1 million during the six months ended
September 30, 2004 as a result of purchases of $120.6 million of U.S. Government
and agency securities, which were substantially offset by sales and maturities
of $91.8 million of such securities.

Federal Home Loan Bank ("FHLB") stock decreased $22.4 million during the six
months ended September 30, 2004. This decrease was related to a return of excess
holdings of FHLB stock and was used to provide liquidity.

Real estate held for development decreased $12.6 million to $65.1 million as of
September 30, 2004 from $77.7 million as of March 31, 2004. This decrease was
the result of continued home and land lot sales.

Total liabilities increased $89.2 million during the six months ended September
30, 2004. This increase was largely due to a $72.1 million increase in deposits
and a $14.6 million increase in FHLB advances and other borrowings during the
six-month period. Brokered deposits have been used in the past and may be used
in the future as the need for funds requires them. Brokered deposits totaled
$338.6 million at September 30, 2004 and $285.2 million at March 31, 2004, and
generally mature within one to five years.

Stockholders' equity increased $14.8 million during the six months ended
September 30, 2004 as a net result of (i) comprehensive income of $19.9 million,
(ii) stock options exercised of $2.3 million (with the excess of the cost of
treasury shares over the option price ($1.8 million) charged to retained
earnings), (iii) the issuance of shares for management and benefit plans of
$410,000, and (iv) benefit plan shares earned and related tax adjustments
totaling $610,000. This net increase was partially offset by (i) cash dividends
of $5.4 million and (ii) purchases of treasury stock of $1.2 million.

                                       22
<PAGE>

ASSET QUALITY

Non-performing assets increased $3.8 million to $21.2 million at September 30,
2004 from $17.3 million March 31, 2004 and increased as a percentage of total
assets to 0.54% from 0.46% at such dates, respectively.

Non-performing assets are summarized as follows at the dates indicated:

<TABLE>
<CAPTION>
                                                                              AT MARCH 31,
                                                 AT SEPTEMBER 30,    ---------------------------------
                                                      2004             2004        2003         2002
                                                 ----------------    -------     --------      -------
                                                               (Dollars In Thousands)
<S>                                              <C>                 <C>          <C>          <C>
Non-accrual loans:
 Single-family residential                          $ 3,881          $ 3,247      $ 4,510      $ 4,505
 Multi-family residential                                --               --          444          187
 Commercial real estate                              10,691            8,764        1,776        2,212
 Construction and land                                   --               --           --          168
 Consumer                                               524              642          661          933
 Commercial business                                  5,331            2,268        2,678        1,037
                                                    -------          -------      -------      -------
  Total non-accrual loans                            20,427           14,921       10,069        9,042
Real estate held for development and sale                --               --           49           74
Foreclosed properties and repossessed assets,
  net                                                   760            2,422        1,535        1,475
                                                    -------          -------      -------      -------
  Total non-performing assets                       $21,187          $17,343      $11,653      $10,591
                                                    =======          =======      =======      =======
Performing troubled debt restructurings             $   130          $ 2,649      $ 2,590      $   403
                                                    =======          =======      =======      =======
Total non-accrual loans to total loans                 0.59%            0.45%        0.34%        0.32%
Total non-performing assets to total assets            0.54             0.46         0.33         0.30
Allowance for loan losses to total loans               0.82             0.87         1.00         1.09
Allowance for loan losses to total
 non-accrual loans                                   138.12           191.72       294.74       346.04
Allowance for loan losses
 to total non-performing assets                      133.29           165.78       257.87       300.05
</TABLE>

Non-accrual loans increased $5.5 million during the six months ended September
30, 2004. The increase was largely attributable to three commercial loans placed
on non-accrual status during this period. One was a $5.2 million commercial
business loan secured by a computer software and consulting company located in
Tempe, Arizona. The second was a $1.5 million commercial real estate loan
secured by commercial development property located in Madison, Wisconsin. The
third was a $900,000 loan secured by a 54 unit motel located in Dodgeville,
Wisconsin. At September 30, 2004, there were five non-accrual commercial loans
with loan balances greater than $1.0 million. One loan is a commercial real
estate loan which is secured by a 70 unit hotel located in Kenosha, Wisconsin,
with a loan balance of $3.1 million at September 30, 2004. Another loan is a
commercial real estate loan which is secured by retail property in Dallas,
Texas, with a loan balance of $1.7 million at September 30, 2004. Another loan
is a commercial real estate loan which is secured by a 161 unit motel located in
Schiller Park, Illinois, with a loan balance of $1.5 million at September 30,
2004. The other two loans with loan balances greater than $1.0 million are the
commercial business loan secured by the computer software and consulting company
discussed above, and the commercial real estate loan secured by the commercial
development property also discussed above. 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 more than 90 days.

                                       23
<PAGE>

Foreclosed properties and repossessed assets decreased $1.7 million for the six
months ended September 30, 2004. The decrease was not attributable to any one
specific property.

Performing troubled debt restructurings decreased $2.5 million during the six
months ended September 30, 2004 primarily due to a $2.1 million commercial real
estate loan in Sonoma, California that was paid off during the period.

At September 30, 2004, assets that the Corporation had classified as
substandard, net of reserve, consisted of $25.2 million of loans and foreclosed
properties. As of March 31, 2004, substandard assets amounted to $31.1 million.
An asset is classified as substandard when it is determined that it is
inadequately protected by the current net worth and paying capacity of the
obligor or by the collateral pledged, if any, and that the Corporation will
sustain some loss if the deficiencies are not corrected. The decrease of $5.9
million in the substandard balance for the six months ended September 30, 2004
was in part attributable to the pay off of three previously classified loans
which had carrying values of greater than $1.0 million. The three loans were
secured by properties located in Janesville, Wisconsin; Sonoma, California; and
Minneapolis, Minnesota.

The category of substandard assets contains several loans with a carrying value
of greater than $1.0 million. One loan, with a carrying value of $3.9 million,
is secured by the assets of a stainless tank operation located in Cottage Grove,
Wisconsin. Two loans with a carrying value of $4.7 million, are secured by a
computer software and consulting company located in Tempe, Arizona. A third
loan, with a carrying value of $2.8 million, is secured by a 70 unit hotel
located in Kenosha, Wisconsin. A fourth loan, with a carrying value of $1.2
million, is secured by a commercial property located in Beloit, Wisconsin. A
fifth loan, with a carrying value of $1.2 million is secured by commercial
development property located in Madison, Wisconsin. A sixth loan, with a
carrying value of $1.0 million is secured by retail property located in Dallas,
Texas. A seventh loan, with a carrying value of $1.0 million, is secured by a
161 unit motel located in Schiller Park, Illinois.

At September 30, 2004, the Corporation had identified assets of $15.2 million as
impaired, net of reserves. As of March 31, 2004, impaired loans were $11.7
million. A loan is defined as impaired when, according to FAS 114, based on
current information and events, it is probable that a creditor will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. A summary of the details regarding impaired loans follows:

<TABLE>
<CAPTION>
                                      AT SEPTEMBER 30,           AT MARCH 31,
                                      ----------------  -------------------------------
                                            2004          2004        2003       2002
                                      ----------------  -------     -------     -------
                                                       (In Thousands)
<S>                                   <C>               <C>         <C>         <C>
Impaired loans with valuation
  reserve required                        $20,204       $17,126     $ 8,483     $11,467

Less:
  Specific valuation allowance              4,966         5,382       3,717       4,240
                                          -------       -------     -------     -------

Total impaired loans                      $15,238       $11,744     $ 4,766     $ 7,227
                                          =======       =======     =======     =======

Average impaired loans                    $ 9,819       $ 6,389     $ 6,288     $ 6,216

Interest income recognized
  on impaired loans                       $   353       $   710     $   613     $   740

Interest income recognized on a
cash basis on impaired loans              $   353       $   710     $   613     $   740
</TABLE>

                                       24
<PAGE>

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

<TABLE>
<CAPTION>
                                                     AT MARCH 31,
                    AT SEPTEMBER 30,      --------------------------------
                         2004               2004        2003       2002
                    ----------------      -------     -------     -------
                                                  (In Thousands)
<S>                 <C>                   <C>         <C>         <C>
30 to 59 days           $ 3,948           $ 4,887     $10,083     $17,647
60 to 89 days             2,122            10,941       5,612       2,671
                        -------           -------     -------     -------
   Total                $ 6,070           $15,828     $15,695     $20,318
                        =======           =======     =======     =======
</TABLE>

The Corporation's loan portfolio, foreclosed properties and repossessed assets
are evaluated on a continuing basis to determine the necessity for additions and
recaptures to the allowance for loan losses and the related adequacy of the
balance in the allowance for loan losses account. 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 management's estimation of
future losses. The evaluation of the allowance for loan losses includes a review
of known loan problems as well as inherent problems based upon historical trends
and ratios. Foreclosed properties are recorded at the lower of carrying value or
fair value 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.

A summary of the activity in the allowance for loan losses follows:

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED            SIX MONTHS ENDED
                                         SEPTEMBER 30,                SEPTEMBER 30,
                                     -----------------------       -----------------------
                                       2004           2003           2004           2003
                                     --------       --------       --------       --------
                                                    (Dollars In Thousands)
<S>                                  <C>            <C>            <C>            <C>
Allowance at beginning of period     $ 28,535       $ 30,037       $ 28,607       $ 29,677
Charge-offs:
  Mortgage                               (121)           (63)          (430)          (213)
  Consumer                               (186)          (155)          (460)          (372)
  Commercial business                    (393)        (1,792)          (398)        (1,865)
                                     --------       --------       --------       --------
   Total charge-offs                     (700)        (2,010)        (1,288)        (2,450)
Recoveries:
  Mortgage                                 29             26             37            262
  Consumer                                 20             10             42             38
  Commercial business                      29             88             65            174
                                     --------       --------       --------       --------
   Total recoveries                        78            124            144            474
                                     --------       --------       --------       --------
   Net charge-offs                       (622)        (1,886)        (1,144)        (1,976)
Provision for loan losses                 300            450            750            900
                                     --------       --------       --------       --------
  Allowance at end of period         $ 28,213       $ 28,601       $ 28,213       $ 28,601
                                     ========       ========       ========       ========
Net charge-offs to average loans        (0.08)%        (0.26)%        (0.07)%        (0.14)%
                                     ========       ========       ========       ========
</TABLE>

Although management believes that the September 30, 2004 allowance for loan
losses is adequate based upon the current evaluation of loan delinquencies,
non-performing assets, charge-off trends, economic conditions and other factors,
there can be no assurance that future adjustments to the allowance will not be
necessary. Management also continues to pursue all practical and legal methods
of collection, repossession and disposal, and adheres to high underwriting
standards in the origination process in order to continue to maintain strong
asset quality.

                                       25
<PAGE>

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 securities, deposits from retail and wholesale
sources, FHLB advances and other borrowings.

At September 30, 2004, the Corporation had outstanding commitments to originate
loans of $123.8 million, commitments to extend funds to, or on behalf of,
customers pursuant to lines and letters of credit of $309.8 million and loans
sold with recourse to the Corporation in the event of default by the borrower of
$264,000. The Corporation had sold loans with recourse in the amount of $12.4
million through the FHLB Mortgage Partnership Finance Program at September 30,
2004. Scheduled maturities of certificates of deposit during the twelve months
following September 30, 2004 amounted to $921.8 million and scheduled maturities
of FHLB advances during the same period totaled $184.3 million. At September 30,
2004, the Corporation had no reverse repurchase agreements. Management believes
adequate resources are available to fund all commitments to the extent required.

The Bank is required by the Office of Thrift Supervision ("OTS") to maintain
liquid investments in qualifying types of U.S. Government and agency securities
and other investments sufficient to ensure its safe and sound operation. During
the quarter ended September 30, 2004, the Bank's average liquidity ratio was
9.48%.

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. The OTS requirement for the core
capital ratio for the Bank is currently 3.00%. The requirement is 4.00% for all
but the most highly-rated financial institutions.

                                       26
<PAGE>

The following summarizes the Bank's capital levels and ratios and the levels and
ratios required by the OTS at September 30, 2004 and March 31, 2004:

<TABLE>
<CAPTION>
                                                                                       MINIMUM REQUIRED
                                                               MINIMUM REQUIRED           TO BE WELL
                                                                  FOR CAPITAL         CAPITALIZED UNDER
                                            ACTUAL             ADEQUACY PURPOSES       OTS REQUIREMENTS
                                     ---------------------   ---------------------  ---------------------
                                      AMOUNT         RATIO   AMOUNT          RATIO   AMOUNT        RATIO
                                      ------         -----   ------          -----   ------        -----
                                                             (Dollars In Thousands)
<S>                                  <C>             <C>     <C>             <C>    <C>            <C>
AS OF SEPTEMBER 30, 2004:
Tier 1 capital
   (to adjusted tangible assets)     $303,037         7.93%  $114,652        3.00%  $191,087         5.00%
Risk-based capital
   (to risk-based assets)             326,289        10.54    247,578        8.00    309,473        10.00
Tangible capital
   (to tangible assets)               303,037         7.93     57,326        1.50      N/A           N/A

AS OF MARCH 31, 2004:
Tier 1 capital
   (to adjusted tangible assets)     $285,680         7.71%  $111,208        3.00%  $185,346         5.00%
Risk-based capital
   (to risk-based assets)             308,912        10.61    232,858        8.00    291,073        10.00
Tangible capital
   (to tangible assets)               285,680         7.71     55,604        1.50      N/A           N/A
</TABLE>

The following table reconciles the Corporation's stockholders' equity to
regulatory capital at September 30, 2004 and March 31, 2004:

<TABLE>
<CAPTION>
                                                          SEPTEMBER 30,    MARCH 31,
                                                              2004           2004
                                                          -------------    ---------
                                                                (In Thousands)
<S>                                                         <C>            <C>
Stockholders' equity of the Corporation                     $ 316,359      $ 301,548
Less: Capitalization of the Corporation and non-bank
  subsidiaries                                                  8,504          8,674
                                                            ---------      ---------
Stockholders' equity of the Bank                              324,863        310,222
Less: Intangible assets and other non-includable assets       (21,826)       (24,542)
                                                            ---------      ---------
Tier 1 and tangible capital                                   303,037        285,680
Plus: Allowable general valuation allowances                   23,252         23,232
                                                            ---------      ---------
Risk based capital                                          $ 326,289      $ 308,912
                                                            =========      =========
</TABLE>

                                       27
<PAGE>

GUARANTEES

Financial Interpretation No. 45 "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to
Others" ("FIN 45") requires certain guarantees to be recorded at fair value as a
liability at inception and when a loss is probable and reasonably estimatable,
as those terms are defined in FASB Statement No. 5 "Accounting for
Contingencies." The recording of the liability has not significantly affected
the Corporation's financial condition.

The Corporation's real estate investment segment, IDI, is required to guarantee
the partnership loans of its subsidiaries, for the development of homes for
sale. As of September 30, 2004, IDI had guaranteed $76.1 million for the
following partnerships on behalf of the respective subsidiaries. As of the same
date, $25.1 million was outstanding. The table below summarizes the individual
subsidiaries and their respective guarantees and outstanding loan balances.

<TABLE>
<CAPTION>
                                                                                         AMOUNT               AMOUNT
     SUBSIDIARY                   PARTNERSHIP                     AMOUNT              OUTSTANDING          OUTSTANDING
       OF IDI                        ENTITY                     GUARANTEED             AT 9/30/04           AT 3/31/04
       ------                        ------                     ----------             ----------           ----------
                                                (Dollars in thousands)
<S>                         <C>                                 <C>                   <C>                  <C>
Oakmont                          Chandler Creek                 $  8,440               $  4,411             $  7,340

Davsha II                           Paragon                        9,435                  5,971                3,130

Davsha III                   Indian Palms 147, LLC                13,155                  1,711                1,650

Davsha IV                     DH Indian Palms, LLC                 9,840                  1,233                3,330

Davsha V                     Villa Santa Rosa, LLC                12,518                  5,598                5,490

Davsha VI                      Bellasara 168, LLC                 12,743                  2,238                4,700

Davsha VII                  La Vista Grande 121, LLC               9,939                  3,902                    -
                                                                --------               --------             --------

  Total                                                         $ 76,070               $ 25,064             $ 25,640
                                                                ========               ========             ========
</TABLE>

IDI has real estate partnership investments within its subsidiaries for which it
guarantees the above loans. These partnerships are also funded by financing with
loans guaranteed by IDI and secured by the lots and homes being developed within
each of the respective partnership entities.

As a limited partner, the Corporation still has the ability to exercise
significant influence over operating and financial policies. This influence is
evident in the terms of the respective partnership agreements and participation
in policy-making processes. The Corporation has a 50% controlling interest in
the respective limited partnerships and therefore has significant influence over
the right to approve the sale or refinancing of assets of the respective
partnerships in accordance with those partnership agreements.

In acting as a partner with a controlling interest, the Corporation is committed
to providing additional levels of funding to meet partnership operating deficits
up to an aggregate amount of $76.1 million. At September 30, 2004, the
Corporation's investment in these partnerships consisted of assets of $51.8
million and cash and other assets of $4.0 million. The liabilities of these
partnerships consisted of other borrowings of $25.1 million (reported as a part
of FHLB and other borrowings), other liabilities of $5.5 million (reported as a
part of other liabilities) and minority interest of $6.5 million. These amounts
represent the Corporation's maximum exposure to loss at September 30, 2004 as a
result of involvement with these limited partnerships.

                                       28
<PAGE>

The partnership agreements generally contain buy-sell provisions whereby certain
partners can require the purchase or sale of ownership interests by certain
partners.

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, and invests in
adjustable-rate or medium-term, fixed-rate, single-family residential mortgage
loans, medium-term mortgage-related securities and consumer loans, which
generally have shorter terms to maturity and higher interest rates than
single-family mortgage loans.

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 considers them
reasonable, although the actual amortization and repayment of assets and
liabilities may vary substantially. The Corporation's cumulative net gap
position at September 30, 2004 has not changed materially since March 31, 2004.

CONSENT ORDER

In September 2004, the Board of Directors of the Bank entered into a Stipulation
and Consent to the Issuance of an Order to Cease and Desist for Affirmative
Relief with the Office of Thrift Supervision ("OTS") and the OTS issued a
Consent Order to Cease and Desist for Affirmative Relief ("Consent Order").
Under the Consent Order, the Bank's board of directors has agreed, among other
things, to take a range of actions with respect to the review and conduct of its
Bank Secrecy Act ("BSA") compliance activities. The Bank remains subject to the
possibility of additional governmental actions with regard to these matters,
including potential monetary penalties. The Bank is actively engaged in the
process of addressing the issues related to the Consent Order, including
reviewing and strengthening its BSA compliance process, and has taken a number
of actions in this regard which are in addition to those required by the OTS.
The Corporation expects that it will experience an increase in its operating
costs in connection with addressing matters related to the Consent Order but
cannot quantify the amount of the increases.

                                       29
<PAGE>

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      The Corporation's market rate risk has not materially changed from March
      31, 2004. See the Corporation's Annual Report on Form 10-K for the year
      ended March 31, 2004.

ITEM 4 CONTROLS AND PROCEDURES

      The management of the Corporation evaluated, with the participation of the
      Chief Executive Officer and Chief Financial Officer, the effectiveness of
      the Corporation's disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of
      the end of the period covered by this report. Based on such evaluation,
      the Chief Executive Officer and Chief Financial Officer have concluded
      that the Corporation's disclosure controls and procedures are designed to
      ensure that information required to be disclosed in the reports that are
      filed or submitted under the Securities Exchange Act of 1934 is recorded,
      processed, summarized and reported within the time periods specified in
      the SEC's rules and regulations and are operating in an effective manner.

      No change in the Corporation's internal control over financial reporting
      (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities
      Exchange Act of 1934) occurred during the most recent fiscal quarter that
      has materially affected, or is reasonably likely to materially affect, the
      Corporation's internal control over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1 LEGAL PROCEEDING.

      The Corporation 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.

      In September 2004, the Board of Directors of the Bank entered into a
      Stipulation and Consent to the Issuance of an Order to Cease and Desist
      for Affirmative Relief with the OTS and the OTS issued a Consent Order to
      Cease and Desist for Affirmative Relief. For additional information, see
      Item 2, Management's Discussion and Analysis of Financial Condition and
      Results of Operations - Consent Order.

                                       30
<PAGE>

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

      (a) - (b) Not applicable.

      (c) The following table sets forth information with respect to any
      purchase made by or on behalf of the Corporation or any "affiliated
      purchaser," as defined in Section 240.10b-18(a)(3) under the Exchange Act,
      of shares of the Corporation's Common Stock during the indicated periods.

<TABLE>
<CAPTION>
                                                                                TOTAL NUMBER OF
                                                                                SHARES PURCHASED           MAXIMUM NUMBER OF
                                        TOTAL NUMBER           AVERAGE        AS PART OF PUBLICLY       SHARES THAT MAY YET BE
                                         OF SHARES           PRICE PAID         ANNOUNCED PLANS           PURCHASED UNDER THE
           PERIOD                        PURCHASED            PER SHARE           OR PROGRAMS            PLANS OR PROGRAMS (1)
-----------------------------           ------------         ----------       -------------------       ----------------------
<S>                                     <C>                  <C>              <C>                       <C>
July 1 - July 31, 2004                         -                   -                    -                       960,650

August 1 - August 31, 2004                     -                   -                    -                       960,650

September 1 - September 30,
 2004                                     47,300               25.77               47,300                       913,350
                                          ------             -------               ------                       -------
              Total                       47,300             $ 25.77               47,300                       913,350
                                          ======             =======               ======                       =======
</TABLE>

      (1) On October 28, 2003, the Corporation announced a program
  to repurchase up to 1.2 million shares of the Corporation's Common
  Stock. This repurchase plan expired on October 28, 2004.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES.

      Not applicable.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      Not applicable.

ITEM 5 OTHER INFORMATION.

      None.

                                       31
<PAGE>

ITEM 6 EXHIBITS

      The following exhibits are filed with this report:

      Exhibit 31.1      Certification of Chief Executive Officer Pursuant
                        to Rules 13a-14 and 15d-14 of the Securities Exchange
                        Act of 1934 and Section 302 of the Sarbanes-Oxley Act of
                        2002 is included herein as an exhibit to this Report.

      Exhibit 31.2      Certification of Chief Financial Officer Pursuant
                        to Rules 13a-14 and 15d-14 of the Securities Exchange
                        Act of 1934 and Section 302 of the Sarbanes-Oxley Act of
                        2002 is included as an exhibit to this Report.

      Exhibit 32.1      Certification of the Chief Executive Officer
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002 (18 U.S.C. 1350) is included herein as an exhibit
                        to this Report.

      Exhibit 32.2      Certification of the Chief Financial Officer
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002 (18 U.S.C. 1350) is included herein as an exhibit
                        to this Report.

                                       32
<PAGE>

                                   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: November 5, 2004         By: /s/ Douglas J. Timmerman
                                   --------------------------------------------
                                   Douglas J. Timmerman, Chairman of the
                                   Board, President and Chief Executive Officer

Date: November 5, 2004         By: /s/ Michael W. Helser
                                   --------------------------------------------
                                   Michael W. Helser, Treasurer and
                                   Chief Financial Officer

                                       33