<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-K

                  Annual report pursuant to Section 13 of the
                        Securities Exchange Act of 1934

                   For the fiscal year ended March 31, 2001

                         Commission File No.:  0-25504


                            WEST TOWN BANCORP, INC.
            (exact name of registrant as specified in its charter)


                 DELAWARE                                 36-3962962
     (State or other jurisdiction of              (I.R.S. Employer Id. No.)
      incorporation or organization)


                 4852 West 30th Street, Cicero, Illinois 60804
                   (Address of principal executive offices)


      Registrant's telephone number, including area code: (708) 652-2000
       Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, par value $0.01 per share
                               (Title of class)


     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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  X
                             ---

     As of May 30, 2001 there were issued and outstanding 204,787 shares of the
Registrant's common stock which is traded over the counter through the National
Daily Quotation System "Pink Sheet" published by the National Quotation Bureau,
Inc. The aggregate market value of the voting stock held by non-affiliates of
the Registrant based on the estimated value of the stock on May 30, 2001 was
$2,457,444 (204,787 shares at $12 per share). For purposes of this calculation
directors and officers of the Registrant are considered non-affiliates of the
Registrant.


                      DOCUMENTS INCORPORATED BY REFERENCE

     The Annual Report to Stockholders for the year ended March 31, 2001 is
incorporated by reference into Part II of this Form 10-K.

     The Proxy Statement for the 2001 Annual Meeting of Stockholders is
incorporated by reference into Part III of this Form 10-K.
<PAGE>

                                     INDEX

<TABLE>
<CAPTION>
PART I                                                                    PAGE
                                                                          ----
<S>                                                                       <C>
Item 1.      Business..................................................     1

Additional Item. Executive Officers of the Registrant..................    27

Item 2.      Properties................................................    27

Item 3.      Legal Proceedings.........................................    27

Item 4.      Submission of Matters to a Vote of Security Holders.......    27


PART II

Item 5.      Market for Registrant's Common Equity and Related
             Stockholder Matters.......................................    27

Item 6.      Selected Financial Data...................................    27

Item 7.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations.............    27

Item 8.      Financial Statements and Supplementary Data...............    27

Item 9.      Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure....................    28


PART III

Item 10.     Directors and Executive Officers of the Registrant........    28

Item 11.     Executive Compensation....................................    28

Item 12.     Security Ownership of Certain Beneficial
             Owners and Management.....................................    28

Item 13.     Certain Relationships and Related Transactions............    28


PART IV

Item 14.     Exhibits, Financial Statement Schedules and
             Reports on Form 8-K.......................................    29

Item 15.     SIGNATURES................................................    30
</TABLE>
<PAGE>

                                    PART I

Item I. Business.
----------------

General

         West Town Bancorp, Inc. (also referred to as the "Company") was
incorporated under Delaware law on May 6, 1994. On March 1, 1995, the Registrant
acquired West Town Savings Bank (the "Bank") as a part of the Bank's conversion
from a mutual to a stock state chartered savings bank. The Registrant is a
savings bank holding company and is subject to regulation by the Office of the
Illinois Commissioner of Banks and Real Estate (the "OBRE"), the Federal Deposit
Insurance Corporation (the "FDIC") and the Securities and Exchange Commission
(the "SEC"). Currently, the Registrant does not transact any material business
other than through the Bank and West Town Insurance Agency, the Bank's wholly-
owned subsidiary. The Registrant received conversion proceeds amounting to $1.9
million, of which $944,000 was utilized to acquire all of the capital stock of
the Bank. At March 31, 2001, the Company had total assets of $49.8 million and
stockholders' equity of $4.1 million (8.2% of total assets).

         West Town Savings was originally organized in 1922 as an
Illinois-chartered savings and loan association. In 1992 it converted to an
Illinois chartered savings bank. The Bank is a member of the Federal Home Loan
Bank (the "FHLB") System and its deposit accounts are insured up to applicable
limits by the FDIC.

         The Bank's principal business has been and continues to be attracting
deposits from the general public and investing those deposits, together with
funds generated from operations, primarily in one- to four-family,
owner-occupied, fixed-rate loans and commercial real estate loans and to a
lesser extent, multi-family residential mortgage loans, land and construction
loans, mortgage-backed securities and other short-term investments, including
U.S. Government and federal agency securities and other marketable securities.
The Bank's revenues are derived principally from interest on its mortgage loan
and mortgage-backed securities portfolios and interest and dividends on its
investment securities. The Bank's primary sources of funds are deposits,
principal and interest payments on loans and mortgage-backed securities.

Market Area

         The Bank has been, and continues to be, a community-oriented savings
institution offering a variety of financial sources to meet the needs in the
community it serves. The Bank's deposit-gathering area is concentrated in the
neighborhoods surrounding its offices which are located in the Chicago suburbs
of Cicero and North Riverside, in Cook County. The Bank's lending base primarily
covers the same area. Management believes that its offices are located in
communities that can generally be characterized as stable, residential
neighborhoods of predominately one-to-four family residences, mixed with a
commercial segment of a diverse group of retail service businesses.

                                      -1-
<PAGE>

Lending Activities

         Loan and Mortgage-Backed Securities Portfolio Compositions. The loan
portfolio composition consists primarily of conventional fixed-rate,
first-mortgage loans secured by one-to-four family residences and, to a lesser
extent, multi-family residences. At March 31, 2001, the total loans outstanding
were $32.0 million, of which $22.6 million were one-to-four family residential
mortgage loans, or 70.5% of the loan portfolio. Of this amount, purchased
mortgage loans totaled approximately $20.6 million, or 91.3% of one-to-four
family loans. All purchased mortgage loans were originated in the Chicago
metropolitan area. At that same date, multi-family residential mortgage loans
totaled $609,000, or 1.9% of the loan portfolio.

         The Bank participates in a mortgage loan secured by commercial
properties located in the Chicago area. At March 31, 2001, the investment in
non-residential mortgage loans totaled approximately $1.6 million, or 5.0% of
the loan portfolio.

         During the current period, the Bank purchased a $690,000 participating
interest in a construction loan for the purpose of constructing one-to-four
family dwellings in Streamwood, Illinois. It is anticipated that this project
will be competed by June 30, 2001. The Bank is also participating in a
construction loan to develop a condominium complex located in Lombard, Illinois.
The Bank's total commitment to this project totals $400,000, and is schedule to
be repaid within one year. At March 31, 2001, construction loans totaled
approximately $1.1 million, or 3.4% of the loan portfolio.

         On June 30, 2000, the Bank, through its wholly owned subsidiary, West
Town Insurance Agency, purchased 2,500 shares of 23.7% of the issued and
outstanding stock of Commercial Loan Corporation ("CLC") at a purchase price of
$125,000. CLC, which is owned by Chicagoland financial institutions, processes,
underwrites, documents and services commercial loans for financial institution
investors. The services performed by CLC include monitoring post closing
performance of the loan, preparation of loan summaries, ongoing analysis of the
performance of the loan and the borrower including review of financial and
operating statements of the borrower and collection and remittance of all loan
payments. CLC entered into a master loan participation agreement with each of
its shareholders or their affiliates, whereunder the investors, after performing
prudent underwriting, would purchase participations in pools offered by CLC. The
rates paid on the pools to the Bank ranged from 7.00% to 9.50% and consisted of
both fixed and variable rates. As of March 31, 2001 the Bank had purchased an
interest in the pools totaling approximately $6.4 million. Of this amount, $3.4
million or 10.7% of the total loan portfolio were secured lines of credit (total
credit line extended totaled approximately $4.4 million), $1.8 million or 5.5%
were secured by non-real estate business assets, and $1.2 million or 3.9% were
secured by commercial or investment real estate.

         Other loans, totaling approximately $810,000 or 2.5% of total loans,
consisted of loans on deposit accounts and home improvement and auto loans.

         The Company and its subsidiaries also invest in mortgage-backed
securities. At March 31, 2001, the amortized cost of total mortgage-backed
securities aggregated $7,502,000 or 15.1% of total assets, of which 1.1% were
backed by adjustable rate mortgage ("ARM") loans and 98.9% were backed by
fixed-rate loans with maturities of less than ten years. All of the
mortgage-backed securities at March 31, 2001 were insured or guaranteed by
either the Government National Mortgage Bank ("GNMA"), the Federal National
Mortgage Bank ("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC").

Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995

         Management's Discussion and Analysis of Financial Condition and Results
of Operations and Item 1 - Description of Business that are not historical facts
are forward- looking statements subject to the safe harbor created by the
Private Securities Litigation Reform Act of 1995. The Company cautions readers
of this Annual Report on form 10-K that a number of important factors could
cause the Company's actual results in 2001 and beyond to differ materially from
those expressed in any such forward-looking statements. These factors include,
without limitation the general economic and business conditions affecting the
Company's customers; changes in interest rates; the adequacy of the Bank's
allowance for loan losses; competition from, among others, commercial banks,
savings and loan associations, mutual funds, money market funds, finance
companies, credit unions, mortgage companies, and the United States Government;
limited partnership activities; federal and state legislation, regulation and
supervision of the Bank and its subsidiaries; the risk of defaults on loans; and
contractual, statutory and regulatory restrictions on the Bank's ability to pay
dividends to the Company.

                                      -2-
<PAGE>

         The following table sets forth the composition of the loan portfolio
and mortgage-backed securities portfolio of the Company and its subsidiaries in
dollar amounts and in percentages of the respective portfolios at the dates
indicated. Mortgage-backed securities are shown at amortized cost and not fair
value.

<TABLE>
<CAPTION>
                                                                                              At March 31,
                                                  ----------------------------------------------------------
                                                       2001                 2000                 1999
                                                  ----------------     ----------------     ----------------
                                                          Percent              Percent              Percent
                                                  Amount  of Total     Amount  of Total     Amount  of Total
                                                  ------  --------     ------  --------     ------  --------
                                                                                         (Dollars in Thousands)
<S>                                             <C>       <C>          <C>     <C>       <C>        <C>
Mortgage loans:
One-to-four family                              $ 22,579    70.51%     17,678    84.16%     19,249    89.37%
Multi-family                                         609     1.90         254     1.21         345     1.60
Commercial real estate                             1,589     4.96         808     3.85          67      .31
Construction                                       1,090     3.40       2,048     9.75       1,674     7.77
                                                --------   ------      ------   ------      ------   ------
  Total mortgage loans                            25,867    80.77      20,788    98.97      21,335    99.05
                                                --------   ------      ------   ------      ------   ------
Other loans:
Secured lines of credit                            3,591    11.21           -        -           -        -
Business loans                                     1,755     5.48           -        -           -        -
Loans on deposit accounts                            165      .52          26      .12           7      .03
Consumer loans                                       645     2.02         192      .91         197      .92
                                                --------   ------      ------   ------      ------   ------
  Total other loans                                6,156    19.23         218     1.03         204      .95
                                                --------   ------      ------   ------      ------   ------
  Total loans receivable                          32,023   100.00%     21,006   100.00%     21,539   100.00%
                                                --------   ======      ------   ======      ------   ======

Less:
Loans in process                                     500                1,236                1,291
Unearned discounts and
 deferred loan fees                                   79                   79                   86
Allowance for loan losses                             99                   58                   52
Allowance for uncollected interest                     -                    -                    -
                                                --------               ------               ------
Loans receivable, net                           $ 31,345               19,633               20,110
                                                ========               ======               ======



Mortgage-backed securities:
FHLMC                                           $    393     5.23%         54     3.40%        245    25.84%      45.54%
FNMA                                               3,843    51.16         371    23.33         456    48.12       36.60
GNMA                                               3,276    43.61       1,165    73.27         246    26.04       17.86
                                                --------   ------      ------   ------      ------   ------      ------
  Total mortgage-backed securities                 7,512   100.00%      1,590   100.00%        947   100.00%     100.00%
                                                           ======               ======               ======      ======
Net premiums (discounts)                             (10)                 (15)                  (9)
                                                --------               ------               ------
Net mortgage-backed securities                  $  7,502                1,575                  938
                                                ========               ======               ======

<CAPTION>
                                                  -------------------------------------
                                                       1998                 1997
                                                  ----------------     ----------------
                                                          Percent              Percent
                                                  Amount  of Total     Amount  of Total
                                                  ------  --------     ------  --------
<S>                                               <C>     <C>          <C>     <C>
Mortgage loans:
One-to-four family                                17,141    89.20%     14,525     85.45%
Multi-family                                         440     2.29         524      3.08
Commercial real estate                                88      .46          95       .56
Construction                                       1,368     7.12       1,700     10.00
                                                  ------   ------      ------    ------
  Total mortgage loans                            19,037    99.07      16,844     99.09
                                                  ------    -----      ------     -----
Other loans:
Secured lines of credit                                -        -           -         -
Business loans                                         -        -           -         -
Loans on deposit accounts                             23      .12          21       .13
Consumer loans                                       157      .81         133       .78
                                                  ------   ------      ------    ------
  Total other loans                                  180      .93         154       .91
                                                  ------   ------      ------    ------
  Total loans receivable                          19,217   100.00%     16,998    100.00%
                                                  ------   ======      ------    ======

Less:
Loans in process                                     626                1,348
Unearned discounts and
 deferred loan fees                                   88                   57
Allowance for loan losses                             46                   40
Allowance for uncollected interest                     5                  -
                                                  ------               ------
Loans receivable, net                             18,452               15,553
                                                  ======               ======



Mortgage-backed securities:
FHLMC                                                664    40.46%      1,140     45.54%
FNMA                                                 636    38.76         916     36.60
GNMA                                                 341    20.78         447     17.86
                                                  ------   ------      ------    ------
  Total mortgage-backed securities                 1,641   100.00%      2,503    100.00%
                                                           ======                ======
Net premiums (discounts)                              (9)                  (9)
                                                  ------               ------
Net mortgage-backed securities                     1,632                2,494
                                                  ======               ======
</TABLE>

                                      -3-
<PAGE>

         The following tables set forth the Company and its subsidiaries' loan
originations and loan and mortgage-backed securities purchases, sales and
principal repayments for periods indicated.

<TABLE>
<CAPTION>
                                                            Year Ended March 31,
                                                     --------------------------------
                                                      2001         2000         1999
                                                      ----         ----         ----
                                                              (In Thousands)
<S>                                                <C>           <C>           <C>
Mortgage loans (gross):
  At beginning of period                           $ 20,788       21,335       19,037
                                                     ------       ------       ------

  Mortgage loans originated:
   One-to-four family                                   855          115          468
   Multi-family                                           -            -            -
   Commercial real estate                                 -            -            -
                                                     ------       ------       ------
     Total mortgage loans originated                    855          115          468
                                                     ------       ------       ------

  Mortgage loans purchased:
   One-to-four family                                 8,367        1,785        7,528
   Non-residential                                      849          750            -
   Construction                                         690          400            -
                                                     ------       ------       ------
     Total mortgage loans purchased                   9,906        2,935        7,528
                                                     ------       ------       ------

     Total mortgage loans originated and
       purchased                                     10,761        3,050        7,996
                                                     ------       ------       ------

  Participation loans sold                              (83)        (707)        (731)
  Transfer of loans to foreclosed real estate             -            -            -
  Principal repayments                               (5,599)      (2,890)      (4,967)
                                                     ------       ------       ------

  At end of period                                 $ 25,867       20,788       21,335
                                                     ======       ======       ======


Other loans (gross):
  At beginning of period                           $    218          204          180

  Other loans originated:
   Secured lines of credit                              663            -            -
   Loans on deposit accounts                            205           25          104
   Consumer loan                                        540           83           88
                                                     ------       ------       ------
     Total other loans originated                     1,408          108          192
                                                     ------       ------       ------

  Other loans purchased:
   Secured lines of credit                            5,324            -            -
   Business loans                                     2,071            -            -
                                                     ------       ------       ------
     Total other loans purchased                      7,395            -            -
                                                     ------       ------       ------

     Total other loans originated and
      purchased                                       8,803          108          192
                                                     ------       ------       ------

   Principal repayments                              (2,865)         (94)        (168)
                                                     ------       ------       ------

  At end of period                                 $  6,156          218          204
                                                     ======       ======       ======

Mortgage-backed securities (gross):
  At beginning of period                           $  1,590          947        1,641

   Mortgage-backed securities purchased               6,887        1,000            -
   Mortgage-backed securities sold                        -            -            -
   Amortization and repayments                         (965)        (357)        (694)
                                                     ------       ------       ------

  At end of period                                 $  7,512        1,590          947
                                                     ======       ======       ======
</TABLE>


                                      -4-
<PAGE>

         Loan Maturity and Repricing. The following table shows the maturity or
period to repricing of the Company and its subsidiaries' loan and
mortgage-backed securities portfolios at March 31, 2001. Mortgage-backed
securities are shown at amortized cost, not fair value, and consist of loans
with adjustable rates and fixed rates. Information for a presentation of such
adjustable rate loans based on contractual terms to maturity is unavailable and
therefore such loans are shown as being due in the period during which the
interest rates are next subject to change. The table does not include
prepayments or scheduled principal amortization. Prepayments and scheduled
principal amortization on loans and mortgage-backed securities totaled $9.0
million, $4.8 million and $8.1 million for the years ended March 31, 2001, 2000
and 1999, respectively.

<TABLE>
<CAPTION>
                                                      At March 31, 2001
                             ---------------------------------------------------------

                             One-to-                                         Secured
                             Four      Multi-   Commercial                   Lines of
                             Family    Family   Real Estate   Construction    Credit
                             -------   ------   -----------   ------------   --------
                                                    (In Thousands)
<S>                         <C>        <C>      <C>           <C>            <C>
Amounts due:
 Within one year            $  1,981       25          -          1,090        3,414
                              ------    -----      -----          -----        -----

 After one year:
  One to three years           1,238       47          -              -            -
  Three to five years          4,909      445      1,532              -            -
  Five to ten years            2,021       92         57              -          177
  Ten to twenty years          3,899        -          -              -            -
  Over twenty years            8,531        -          -              -            -
                              ------    -----      -----          -----        -----

    Total due or repricing
      after one year          20,598      584      1,589              -          177
                              ------    -----      -----          -----        -----

    Total amount due
     or repricing           $ 22,579      609      1,589          1,090        3,591
                              ======    =====      =====          =====        =====
Less:
 Loans in process
 Unearned discounts,
  premiums, and
  deferred loan fees, net
 Allowance for loan losses
 Allowance for
  uncollected interest


   Loans receivable and
    mortgage-backed
    securities, net

<CAPTION>
                                                At March 31, 2001
                            -----------------------------------------------------
                                                     Totals
                                       ---------------------------------
                                                  Total       Mortgage-
                            Business   Other      Loans        Backed
                             Loans     Loans    Receivable   Securities    Total
                            --------   -----    ----------   ----------   -------

<S>                         <C>        <C>      <C>          <C>          <C>
Amounts due:
 Within one year                64       158       6,732           85      6,817
                             -----     -----      ------       ------     ------

 After one year:
  One to three years           378        34       1,697            1      1,698
  Three to five years        1,313       117       8,316            3      8,319
  Five to ten years              -       109       2,456           36      2,492
  Ten to twenty years            -       392       4,291            -      4,291
  Over twenty years              -         -       8,531        7,387     15,918
                             -----     -----      ------       ------     ------

    Total due or repricing
      after one year         1,691       652      25,291        7,427     32,718
                             -----     -----      ------      -------     ------

    Total amount due
     or repricing            1,755       810      32,023        7,512     39,535
                             =====     =====

Less:
 Loans in process                                   (500)           -       (500)
 Unearned discounts,
  premiums, and
  deferred loan fees, net                            (79)         (10)       (89)
 Allowance for loan losses                           (99)           -        (99)
 Allowance for
  uncollected interest                                 -            -          -
                                                  ------       ------     ------

   Loans receivable and
    mortgage-backed
    securities, net                             $ 31,345        7,502     38,847
                                                  ======       ======     ======
</TABLE>

                                      -5-
<PAGE>

         The following table sets forth at March 31, 2001, the dollar amount of
all loans and mortgage-backed securities due or repricing after March 31, 2002,
and whether such loans have fixed interest rates or adjustable interest rates.

                                       Due or Repricing after
                                           March 31, 2002
                                  --------------------------------
                                   Fixed      Adjustable     Total
                                  ------      ----------    ------
                                            (In Thousands)

Mortgage loans:
   One-to-four family           $ 20,598          -         20,598
   Other                           1,433          740        2,173
Other loans                        2,520          -          2,520
                                  ------        -----       ------
Total loans receivable            24,551          740       25,291
Mortgage-backed securities         7,427          -          7,427
                                  ------        -----       ------
Total loans receivable and
 mortgage-backed securities     $ 31,978          740       32,718
                                  ======        =====       ======


         One-to-Four Family Mortgage Lending. The Bank offers first mortgage
loans secured by one-to-four family residences, including townhouse and
condominium units, in the Bank's primary lending area. Typically, such
residences are single-or-two family homes that serve as the primary residence of
the owner. Loan originations are generally obtained from existing or past
customers, members of the local communities, local real estate agent referrals
and builder/developer referrals within the Bank's area.

         The Bank offers fixed-rate loans and adjustable-rate loans on
one-to-four family residential properties. The Bank's fixed-rate mortgage loans
are made for terms of 15 to 30 years. Interest rates charged on fixed-rate loans
are competitively priced based on market conditions and the cost of funds.
Origination fees range from zero points to 2.5% depending on the interest rate
charged and other factors. Generally, the Bank's standard underwriting
guidelines conform to FHLMC guidelines with periodic exceptions granted to
customers with long-standing relationships on a case-by-case basis, which are
approved by the President and ratified by the Board of Directors.

         The Bank makes one-to-four family residential mortgage loans in amounts
up to 80% of the appraised value of the secured property. Originated mortgage
loans in the Bank's portfolio generally include due-on-sale clauses which
provide the Bank with the contractual right to deem the loan immediately due and
payable in the event that the borrower transfers ownership of the property
without the Bank's consent. It is the Bank's policy to enforce due-on-sale
provisions.

         The Bank also purchases pools of one-to-four family mortgage loans from
area lenders. These purchased loans are subject to the Bank's underwriting
standards. Purchased loans totaled $20.6 million at March 31, 2001, representing
64.3% of the loan portfolio. Adjustable rate pools totaled $4.0 million, with
fixed rate pools totaling $16.6 million at March 31, 2001.

         Multi-Family Lending. In the Chicago metropolitan area, the Bank
originates fixed- rate multi-family loans with terms of 15 to 30 years. These
loans are generally made in amounts up to 80% of the appraised value of the
secured property. Most of the Bank's multi-family loans are not owner-occupied.
In making such loans, the Bank bases its underwriting decision primarily on the
net operating income generated by the real estate to support the debt service,
the financial resources and income level of the borrower, the borrower's
experience in owning or managing similar property, the marketability of the
property and the Bank's lending experience with the borrower. The Bank also
receives a personal guarantee from the borrower. The largest multi-family loan
at March 31, 2001 is in the Bank's primary market area and had an outstanding
balance of $133,000. This loan is secured by a six-unit apartment building
located in the Chicago metropolitan area.

                                      -6-
<PAGE>

         Commercial Lending. The Bank's commercial loans are secured by either
non-real estate assets of the business borrowers or are commercial real estate
loans secured by real estate located in the Chicago metropolitan area. The
largest commercial real estate loan at March 31, 2001, was a $740,000
participation loan on five commercial properties. The underwriting criteria for
commercial lending is governed by a loan policy which incorporates standard
underwriting guidelines including those guidelines prescribed by regulatory
agencies.

         Construction Lending. The Bank currently is participating in a $690,000
construction loan for the purpose of constructing single family residences in
Streamwood, Illinois. It is anticipated that this project will be completed by
June 30, 2001. The Bank is also participating in a construction loan to develop
a condominium complex located in Lombard, Illinois. The Bank's investment in
this project approximates $400,000, and is scheduled to be repaid within one
year.

         Other Lending. The Bank also offers home improvement loans, secured by
second mortgages on collateralized single-family residences. Other loans also
include loans made to depositors and are collateralized by the related deposit
accounts, and automobile loans. Home improvement, auto and loans against deposit
accounts comprised only 2.54% of the Bank's total loans receivable at March 31,
2001.

         Loan Approval Procedures. All loan applications are considered by the
Bank's President, who has the authority to approve all loans, except those in
excess of $500,000, which loans may only be approved by the Bank's Board of
Directors. The President may also approve consumer loans up to $150,000. The
Bank's Board of Directors ratifies all loans approved by the Bank's President.

         The Bank's loan originations are subject to its written underwriting
standards and loan origination procedures. The Bank is an equal opportunity
lender. Decisions on loan applications are made on the basis of detailed
applications and property valuations (consistent with the Bank's written
appraisal policy) by qualified independent appraisers. The loan applications are
designed primarily to determine the borrower's ability to repay and the more
significant items on the application are verified through use of credit reports,
financial statements, tax returns and/or confirmations.

         The Bank requires evidence of marketable title and lien position
(generally consisting of a title survey and legal opinion) as well as fire and
extended coverage casualty insurance in amounts at least equal to the principal
amount of the loan or the value of improvements on the property, depending on
the type of loan. The Bank also requires flood insurance to protect the property
securing its interest when the property is located in a flood plain or otherwise
deemed prudent by management.

         Mortgage-Backed Securities. The Company and its subsidiaries have
investments in mortgage-backed securities and have, at times, utilized such
investments to complement its mortgage lending activities. During the year ended
March 31, 2001, the Company and its subsidiaries purchased $6.9 million in
mortgage-backed securities. At March 31, 2001, the amortized cost of
mortgage-backed securities totaled $7.5 million, or 15.1% of total assets, of
which all were designated as held to maturity and are carried at amortized cost.
The fair value of such securities totaled approximately $7.6 million at March
31, 2001. See Note 2 to the Consolidated Financial Statements in the 2001 Annual
Report to Stockholders. At March 31, 2001, the Company and its subsidiaries'
entire mortgage-backed securities portfolio was directly insured by the GNMA,
the FNMA or the FHLMC.

                                      -7-
<PAGE>

Delinquencies and Classified Assets

         Delinquent Loans. When a loan becomes between 30 and 45 days
delinquent, the Bank contacts the borrower either by telephone, in person or by
mail. If a delinquency continues and a loan is delinquent 90 days, several
courses of action are possible including directing the Bank's attorney to send a
30-day letter advising the borrower of possible legal action or an authorization
to accommodate the special needs of the borrower in the case of hardship. A
physical inspection is ordered to evaluate the condition of the property. When a
loan is four or more months delinquent, arrangements are made to obtain title,
begin foreclosure, or both, unless a written repayment plan has been signed by
both the borrower and the Bank. The Board of Directors reviews a complete list
of all delinquent loans that are 60 days or more delinquent and is apprised of
the action taken to bring the loan current.

         The remedies available to the Bank in the event of a default or
delinquency with respect to certain residential mortgage loans, and the
procedures by which such remedies may be exercised, are governed by the loan
documents and Illinois law. Under the lending documents used by the Bank, the
Bank is prohibited from accelerating the maturity of a residential mortgage
loan, commencing any legal action (including foreclosure proceedings) to the
collect on such loan, or taking possession of any loan collateral until the
lender has first provided the delinquent borrower with at least 30 days' prior
written notice specifying the nature of the delinquency and the borrowers's
right to correct such delinquency. In the event default is not cured on or
before the date required in the notice, the Bank may, at its option, require
immediate payment in full of all sums secured by the mortgage without further
demand and may institute foreclosure proceedings.

         Assuming the foreclosure is uncontested, the Bank can complete the
foreclosure and obtain a deed to the collateral property within eight to ten
months of filing the complaint in Illinois. Under Illinois law, the mortgagor
has a Right of Reinstatement. Specifically, the mortgagor has the right to cure
all defaults that existed had no acceleration occurred provided that such cure
is made prior to the expiration of 90 days from the date the court obtains
jurisdiction over the mortgagor.

         Loans are placed on non-accrual status when, in the judgement 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 Bank does not accrue interest on loans past due 90
days or more. All previously accrued but unpaid interest is deducted from
interest income. Consumer loans more than 120 days delinquent are generally
written-off.

         Classified Assets. Regulations of the FDIC and OBRE require that each
insured institution review and classify its assets on a regular basis. The Bank
has adopted a Classification of Assets Policy and has made the President of the
Bank responsible for approving classifications and valuation allowances and for
making appropriate recommendations as to the changes in procedures and policies
to the Board for approval. In addition, in connection with examinations of
insured institutions, OBRE and FDIC examiners have authority to identify problem
assets and, if appropriate, require them to be classified. There are three
classifications for problem assets: substandard, doubtful and loss. Substandard
assets must have one or more defined weaknesses and are characterized by the
distinct possibility that the insured institution will sustain some loss if the
deficiencies are not corrected. Doubtful assets have the weaknesses of
substandard assets with the additional characteristic that the weaknesses make
collection or liquidation in full on the basis of currently existing facts,
conditions and values questionable, and there is a high possibility of loss. An
asset classified as loss is considered uncollectible and of such little value
that its continuance as an asset of the institution is not warranted. The Bank's
Classification of Assets Policy also contains a special mention category,
described as assets which do not currently expose the Bank to a sufficient
degree of risk to warrant classification but do possess credit deficiencies or
potential weaknesses deserving management's close attention. Assets classified
as substandard or doubtful require the institution to establish general
allowances for loan losses. If an asset or portion thereof is classified loss,
the insured institution must either establish specific allowances for loan
losses in the amount of 100% of the portion of the asset classified as a loss or
charge-off such amount. A portion of general loss allowances established to
cover possible losses related to assets classified substandard or doubtful may
be included in determining an institution's regulatory capital, while specific
valuation allowances for loan losses generally do not qualify as regulatory
capital.

                                      -8-
<PAGE>

         Real Estate Owned. Real estate acquired by the Bank as a result of
foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned
until it is sold. When property is acquired, it is recorded at the lower of cost
or fair value at the date of acquisition and any write-down resulting therefrom
is charged to the allowance for losses on loans. All incidental costs, such as
insurance and real estate taxes, incurred in maintaining the Bank's lien on the
collateral property are capitalized between the date the loan becomes delinquent
and the date of acquisition. After the date of acquisition, all costs incurred
in maintaining the property are expensed and costs incurred for the improvement
or development of such property are capitalized. The Bank had no foreclosed real
estate owned on its books at March 31, 2001.

         Delinquent Loans. At March 31, 2001, 2000 and 1999, delinquencies in
the Bank's loan portfolio were as follows:

<TABLE>
<CAPTION>
                                                   At March 31, 2001
                                   --------------------------------------------------
                                          60-89 Days               90 Days or More
                                   ----------------------       ---------------------
                                   Number       Principal       Number      Principal
                                     of         Balance           of        Balance
                                    Loans       of Loans         Loans      of Loans
                                   ------       ---------       ------      ---------
                                                     (In Thousands)
<S>                                <C>         <C>               <C>        <C>
One-to-four family                    -         $   -              -         $   -
Multi-family                          -             -              -             -
Commercial real estate                -             -              -             -
Land and Construction                 -             -              -             -
                                   ------       ------          ------      -------
  Total loans                         -         $   -              -         $   -
                                   ======       ======          ======       ======

Delinquent loans to total loans                     - %                          - %
                                                ======                       ======
<CAPTION>

                                                   At March 31, 2000
                                   --------------------------------------------------
                                          60-89 Days               90 Days or More
                                   ----------------------       ---------------------
                                   Number       Principal       Number      Principal
                                     of         Balance           of        Balance
                                    Loans       of Loans         Loans      of Loans
                                   ------       ---------       ------      ---------
                                                     (In Thousands)
<S>                                <C>         <C>            <C>           <C>
One-to-four family                     2        $   34             -         $   -
Multi-family                          -             -              -             -
Commercial real estate                -             -              -             -
Land and Construction                 -             -              -             -
                                   ------       ------          ------      -------
  Total loans                          2        $   34             -         $   -
                                   ======       ======          ======      =======

Delinquent loans to total loans                    .16%                          - %
                                                ======                      =======

<CAPTION>
                                                   At March 31, 1999
                                   --------------------------------------------------
                                          60-89 Days               90 Days or More
                                   ----------------------       ---------------------
                                   Number       Principal       Number      Principal
                                     of         Balance           of        Balance
                                    Loans       of Loans         Loans      of Loans
                                   ------       ---------       ------      ---------
                                                     (In Thousands)
<S>                                <C>         <C>            <C>           <C>
One-to-four family                    -         $   -              -         $   -
Multi-family                          -             -              -             -
Commercial real estate                -             -              -             -
Land and Construction                 -             -              -             -
                                   ------       ------          ------      -------
  Total loans                         -         $   -              -         $   -
                                   ======       ======          ======      =======

Delinquent loans to total loans                     - %                          - %
                                                ======                      =======
</TABLE>

                                      -9-
<PAGE>

          Non-performing Assets. The following table sets forth information
regarding loans which are 90 days or more delinquent. The Bank continues
accruing interest on delinquent loans 90 days or more past due, but reserves
100% of the interest due on such loans, thus effecting a non-accrual status. At
March 31, 2001 there were no other known problem assets except as described
above or as included in the table below.


<TABLE>
<CAPTION>
                                                         At March 31,
                                         --------------------------------------------
                                         2001     2000      1999      1998      1997
                                         ----     ----      ----      ----      ----
                                                        (In Thousands)
<S>                                      <C>      <C>       <C>       <C>       <C>
Non-accrual delinquent mortgage loans  $    -        -         -        96         -

Total real estate owned, net of
  related allowance for losses              -        -         -         -         -
                                         ----     ----      ----      ----      ----

  Total non-performing assets          $    -        -         -        96         -
                                         ====     ====      ====      ====      ====

Non-performing loans to total loans         - %      -         -       .50         -

Total non-performing assets to total
  assets                                    - %      -         -       .33         -
</TABLE>

         Allowance for Loan Losses. The determination of the allowance for loan
losses involves material estimates that are susceptible to significant change in
the near term. The allowance for loan losses is maintained at a level adequate
to provide for losses through charges to operating expense. The allowance is
based upon past loss experience and other factors which, in management's
judgement, deserve current recognition in estimating losses. Such other factors
considered by management include growth and composition of the loan portfolio,
the relationship of the allowance for losses to outstanding loans, and economic
conditions. Management believes that the allowance is adequate. While management
uses available information to recognize losses on loans, future additions to the
allowance may be necessary based on changes in economic conditions. In addition,
various regulatory agencies, as an integral part of their examination process,
periodically review the Company's allowance for losses. Such agencies may
require the Company to recognize additions to the allowance based on their
judgements about information available to them at the time of their examination.

         The following table sets forth the Bank's allowance for loan losses at
the dates indicated.


                                                         At March 31,
                                     -------------------------------------------
                                     2001      2000      1999      1998     1997
                                     ----      ----      ----      ----     ----
                                                    (In Thousands)

Balance at beginning of period     $   58        52        46        40       30
Provision for loan losses              41         6         6         6       10
Allowance transferred from (to)
 real estate owned                      -         -         -         -        -
                                      ---       ---       ---      ----     ----
Balance at end of year             $   99        58        52        46       40
                                      ===       ===       ===      ====     ====

Ratio of allowance for loan losses
 to net loans receivable at the
 end of period                        .32%      .30       .26       .25      .26
Ratio of allowance for loan losses
 to total non-performing assets at
 the end of period                    N/A       N/A       N/A     48.05      N/A
Ratio of allowance for loan losses
 to non-performing loans at the end
 of the period                        N/A       N/A       N/A     48.05      N/A

                                      -10-
<PAGE>

         The following table sets forth the allocation of the Bank's allowance
for loan losses by loan category and the percent of loans in each category to
total loans receivable, net, to the end of the periods indicated. The portion of
the loan loss allowance allocated to each loan category does not represent the
total available for future losses which may occur with the loan category since
the total loan loss allowance is a valuation reserve applicable to the entire
loan portfolio.


<TABLE>
<CAPTION>
                                                               March 31,
                    -----------------------------------------------------------------------------------------------
                                2001                             2000                             1999
                    -----------------------------    -----------------------------    -----------------------------
                                         Percent                          Percent                          Percent
                                         of Loans                         of Loans                         of Loans
                                Loan     in Each                 Loan     in Each                 Loan     in Each
                    Amount of  Amounts   Category    Amount of  Amounts   Category    Amount of  Amounts   Category
                    Loan Loss    by      To Total    Loan Loss    by      To Total    Loan Loss    by      To Total
                    Allowance  Category   Loans      Allowance  Category   Loans      Allowance  Category   Loans
                    -----------------------------    -----------------------------    -----------------------------
                                                                    (Dollars in Thousands)
<S>                  <C>      <C>          <C>           <C>     <C>        <C>           <C>     <C>        <C>
One-to-four family   $  22    $ 22,579     70.51%        18      17,678     84.16%        20      19,249     89.37%
Multi-family             9         609      1.90          1         254      1.21          1         345      1.60
Commercial real
 estate                 12       1,589      4.96          2         808      3.85          1          67       .31
Construction             3       1,090      3.40          5       2,048      9.75          5       1,674      7.77
Secured lines of
 credit                 34       3,591     11.21          -           -         -          -           -         -
Business loans          18       1,755      5.48          -           -         -          -           -         -
Loans on deposit
 accounts                -         165       .52          -          26       .12          -           7       .03
Consumer loans           1         645      2.02          1         192       .91          1         197       .92
Unallocated              -         -          -          31           -         -         24           -         -
                       ---      ------    ------        ---      ------    ------        ---      ------    ------
    Total            $  99    $ 32,023    100.00%        58      21,006    100.00%        52      21,539    100.00%
                       ===      ======    ======        ===      ======    ======        ===      ======    ======

<CAPTION>
                   ---------------------------------------------------------------
                                1998                             1997
                   ------------------------------    -----------------------------
                                         Percent                          Percent
                                         of Loans                         of Loans
                                Loan     in Each                 Loan     in Each
                    Amount of  Amounts   Category    Amount of  Amounts   Category
                    Loan Loss    by      To Total    Loan Loss    by      To Total
                    Allowance  Category   Loans      Allowance  Category   Loans
                    -----------------------------    -----------------------------

<S>                     <C>     <C>        <C>           <C>     <C>        <C>
One-to-four family      17      17,141     89.20%        14      14,525     85.45%
Multi-family             2         440      2.29          3         524      3.08
Commercial real
 estate                  1          88       .46          1          95       .56
Construction             4       1,368      7.12          5       1,700     10.00
Secured lines of
 credit                  -           -         -          -           -         -
Business loans           -           -         -          -           -         -
Loans on deposit
 accounts                -          23       .12          -          21       .13
Consumer loans           1         157       .81          1         133       .78
Unallocated             21           -          -           16        -          -
                       ---      ------    ------        ---      ------    ------
    Total               46      19,217    100.00%        40      16,998    100.00%
                       ===      ======    ======        ===      ======    ======
</TABLE>

                                      -11-
<PAGE>

Investment Activities

     The investment policy of the Company and its subsidiaries, which is
established by the Board of Directors and implemented by the Asset/Liability
Committee, is designed primarily to provide and maintain liquidity, to generate
a favorable return on investments without incurring undue interest rate and
credit risk, and to complement the Bank's lending activities. State chartered
savings institutions have the authority to invest in various types of liquid
assets, including United States Treasury obligations, securities of various
federal agencies, certain certificates of deposit of insured banks and savings
institutions, certain bankers acceptances, repurchase agreements and loans on
federal funds. Subject to various restrictions, state chartered savings
institutions may also invest a portion of their assets in commercial paper,
corporate debt securities and asset- backed securities. At March 31, 2001, the
Company and its subsidiaries had investment securities in the aggregate amount
of $463,000. The investment portfolio, except for FHLB stock, is classified as
available for sale.

     The following table sets forth certain information regarding the book value
of the Company and its subsidiaries' investment securities portfolio at the
dates indicated.

<TABLE>
<CAPTION>
                                                               At March 31,
                                                     --------------------------------
                                                      2001         2000         1999
                                                      ----         ----         ----
                                                              (In Thousands)
<S>                                                <C>            <C>           <C>
Interest-bearing deposits:
  Certificates of deposit                          $  1,963        7,395        4,298
  FHLB daily investment                               4,784        3,372        3,485
  Other                                                  18           63          112
                                                     ------       ------        -----
   Total interest-bearing deposits                 $  6,765       10,830        7,895
                                                     ======       ======        =====

Investment securities:
  U.S. Government securities
   and obligations                                 $    -            -            -
  FHLB-Chicago stock                                    200          186          177
  Corporate equity investments (1)                      170          170          170
  Corporate debt securities (1)                          93           79          100
                                                      -----        -----        -----
   Total investment securities                     $    463          435          447
                                                      =====        =====        =====
</TABLE>

_____________________
(1)  For a complete description, see Note 4 to the "Notes to Consolidated
     Financial Statements" in the 2001 Annual Report to Stockholders.

                                      -12-
<PAGE>

         The table below sets forth certain information regarding the carrying
value, weighted average yield and maturities of the Company and its
subsidiaries' investment securities at March 31, 2001.

<TABLE>
<CAPTION>
                                                                   At March 31, 2001
                                 -------------------------------------------------------------------------------------------
                                   One Year or Less      One to Five Years              Total Investment Securities
                                 -------------------    -------------------     --------------------------------------------
                                                                                 Average
                                            Weighted               Weighted     Remaining             Approximate   Weighted
                                 Carrying    Average    Carrying    Average     Years to    Carrying     Market      Average
                                  Value       Yield      Value       Yield      Maturity     Value       Value        Yield
                                 --------   --------    --------   --------     ---------   --------  -----------   --------
                                                                (Dollars in Thousands)
<S>                              <C>        <C>         <C>        <C>          <C>         <C>       <C>           <C>
FHLB-Chicago stock               $  200        7.00%       -           -            -           200         200        7.00

Corporate equity investments        100         N/A        -           -            -           100         170         N/A

Corporate debt securities           -           -          100       11.00           2          100          93       11.00
                                   ----        ----       ----       -----         ---        -----       -----       -----

  Total                          $  300        7.00%       100       11.00           2          400         463        6.25
                                   ====        ====       ====       =====         ===        =====       =====       =====
</TABLE>

                                      -13-
<PAGE>

Sources of Funds

     General. Deposits, repayments on loans and mortgage-backed securities and
stockholders' equity are the primary sources of the Bank's funds for use in
lending, investing and for other general purposes.

     Deposits. The Bank offers a variety of deposit accounts having a range of
interest rates and terms. The Bank's deposits consist of passbook and statement
savings, demand deposits, money market accounts, and certificate accounts. The
flow of deposits is influenced significantly by general economic conditions,
changes in money market and prevailing interest rates and competition. The
Bank's deposits are obtained primarily from the area in which its offices are
located. The Bank relies primarily on customer service and long-standing
relationships with customers to attract and retain these deposits. Certificate
accounts in excess of $100,000 are not actively solicited by the Bank nor does
the Bank use brokers to obtain deposits. Management constantly monitors the
Bank's deposit accounts and, based on historical experience, management believes
it will retain a large portion of such accounts upon maturity.

     The following table presents the deposit activity of the Bank for the
periods indicated.

<TABLE>
<CAPTION>
                                                            Year Ended March 31,
                                                     --------------------------------
                                                      2001         2000         1999
                                                      ----         ----         ----
                                                              (In Thousands)
<S>                                               <C>            <C>           <C>
Deposits                                          $  42,296       15,562        8,712
Withdrawals                                         (29,491)     (12,764)      (8,522)
                                                     ------       ------       ------
Net deposits                                         12,805        2,798          190
Interest credited on deposits                         1,942        1,230          976
                                                     ------       ------       ------
  Total increase in deposits                      $  14,747        4,028        1,166
                                                     ======       ======       ======
</TABLE>

     At March 31, 2001, the Bank had outstanding $8.0 million in deposit
accounts in amounts of $100,000 or more maturing as follows:


                   Maturity Period                            Amount
                   ---------------                            ------
                                                          (In Thousands)

                   Three months or less                       $ 3,367
                   Over three through six months                  613
                   Over six through twelve months               3,003
                   Over twelve months                           1,058
                                                                -----

                       Total                                  $ 8,041
                                                                =====

                                      -14-
<PAGE>

     The following table sets forth the distribution of the Bank's deposit
accounts at the dates indicated and the weighted average interest rates on
deposits presented.

<TABLE>
<CAPTION>
                                                     At March 31,
                                ------------------------------------------------------
                                      2001               2000               1999
                                ----------------   ----------------   ----------------
                                        Percent            Percent            Percent
                                        of Total           of Total           of Total
                                Amount  Deposits   Amount  Deposits   Amount  Deposits
                                ------  --------   ------  --------   ------  --------
                                                 (Dollars in Thousands)
<S>                           <C>       <C>        <C>     <C>        <C>     <C>
Passbook accounts             $  6,218    13.75%    5,743    18.85%    6,122    23.16%
                                ------   ------    ------   ------    ------   ------
Demand deposit accounts          1,281     2.83       517     1.70       117      .44
                                ------   ------    ------   ------    ------   ------
Money market accounts            6,046    13.38     1,017     3.34         -        -
                                ------   ------    ------   ------    ------   ------
Certificate accounts
  Ninety-one day                   105      .23       253      .83       199      .75
  Six to twelve months           2,517     5.57     1,842     6.05     2,274     8.61
  Twelve to eighteen months     21,067    46.61    15,639    51.34    12,875    48.71
  Eighteen to thirty months      3,709     8.20     1,633     5.36       978     3.70
  Thirty to sixty months           636     1.41       748     2.46       837     3.17
  Sixty months                     241      .53       179      .59       332     1.26
  IRA and Keogh                  3,290     7.28     2,792     9.17     2,601     9.84
  Other                             95      .21        95      .31        95      .36
                                ------   ------    ------   ------    ------   ------
    Total                       31,660    70.04    23,181    76.11    20,191    76.40
                                ------   ------    ------   ------    ------   ------

Total deposits                $ 45,205   100.00%   30,458   100.00%   26,430   100.00%
                                ======   ======    ======   ======    ======   ======

Weighted average rate                      5.47%              4.97%              4.62%
                                           ====               ====               ====
</TABLE>

     The following table presents, by various rate categories, the amount of
certificate accounts outstanding at March 31, 2001, 2000, and 1999 and the
periods to maturity of the certificate accounts outstanding at March 31, 2001.

<TABLE>
<CAPTION>
                                                             Period to Maturity
                                                             from March 31, 2001
                                                       ------------------------------
                                At March 31,            Within      One to
                         --------------------------
                          2001      2000      1999     One Year  Five Years(1)  Total
                          ----      ----      ----     --------  -------------  -----
                                                (In Thousands)
<S>                    <C>         <C>       <C>       <C>       <C>           <C>
Certificate accounts:
   4.99% or less       $  1,105     3,655     4,100        943        162       1,105
   5.00% to 5.99%         5,146    10,261    15,090      3,181      1,965       5,146
   6.00% to 6.99%        23,201     9,265     1,001     20,886      2,315      23,201
   7.00% to 7.99%         2,208         -         -      1,638        570       2,208
                         ------    ------    ------     ------      -----      ------
    Total              $ 31,660    23,181    20,191     26,648      5,012      31,660
                         ======    ======    ======     ======      =====      ======
</TABLE>

__________________
(1)  The Bank does not offer certificate accounts with a period to maturity
     exceeding five years.

                                     -15-
<PAGE>

Borrowings

     Deposits are the primary source of funds of the Bank's lending and
investment activities and for its general business purposes. The Bank may obtain
advances from the FHLB of Chicago to supplement its supply of lendable funds,
although the Bank has not generally utilized this funding source. Advances from
the FHLB of Chicago would typically be secured by a pledge of the Bank's stock
in the FHLB of Chicago and a portion of the Bank's first mortgage loans and
certain other assets. At March 31, 2001 and 2000, the Bank had no advances
outstanding from the FHLB of Chicago or borrowings of any kind.

     In connection with the conversion, the ESOP purchased 8% of the Common
Stock issued in the Conversion (17,755 shares). Such purchase was funded by the
Company thru a 10-year loan to the ESOP in the amount of $177,550. The Bank is
making annual contributions to the ESOP to enable the ESOP to pay principal and
interest.

Subsidiary Activities

     OBRE regulations permit a state-chartered savings bank to invest up to 10%
of its assets in the capital stock, paid-in surplus and unsecured obligations of
subsidiary corporations or service corporations. As of March 31, 2001, the Bank
was authorized to invest approximately $4.9 million in the capital stock and
other securities of service corporation subsidiaries. As of that date, the Bank
had an equity investment of $129,412 in its wholly-owned service corporation,
West Town Insurance Agency, Inc. This company is a full-service licensed
insurance agency.

Competition

     The Bank faces significant competition in attracting deposits. Its most
direct competition for deposits has historically come from commercial banks and
savings institutions located in its market area, many of which are substantially
larger than the Bank. The Bank also faces additional significant competition for
investors' funds from short-term money market mutual funds and issuers of
corporate and government securities. The Bank competes for deposits principally
by offering depositors a variety of deposit programs, a convenient location and
hours and other services. The Bank does not rely upon any individual group or
entity for a material portion of its deposits.

     The Bank's competition for real estate loans comes principally from
mortgage banking companies, commercial banks and savings institutions. The Bank
competes for loan originations primarily through the interest rates and loan
fees it charges, and the efficiency and quality of services it provides
borrowers, real estate brokers and builders. Factors which affect competition
include the general and local economic conditions, current interest rate levels
and volatility in the mortgage markets.

Personnel

     As of March 31, 2001, the Bank had 10 full-time employees and 4 part-time
employees. The employees are not represented by a collective bargaining unit,
and the Bank considers its relationship with its employees to be excellent.

                                      -16-
<PAGE>

                     REGULATION OF WEST TOWN BANCORP, INC.

     The Company is a savings bank holding company within the meaning of the
Home Owners' Loan Act of 1933 ("HOLA"), as amended by FIRREA. As such, the
Company is registered with the OBRE, and is subject to Illinois regulation,
examinations, supervision and reporting requirements. Furthermore, the Holding
Company is permitted to engage in activities prescribed by the Commissioner.

     Per Regulation Y, the Company is also registered with the Federal Reserve
as a Bank Holding Company. The principal purposes of Regulation Y are to
regulate the acquisition of control of banks by companies and individuals, to
define and regulate the nonbanking activities in which bank holding companies
and foreign banking organizations with United States operations may engage, and
to set forth the procedures for securing approval for such transactions and
activities. The Company does not anticipate that the regulatory activities of
either the OBRE or the Federal Reserve Board will adversely affect the
activities of the Holding Company.

Affiliate Restrictions

     The affiliate restrictions contained in Sections 23A and 23B of the Federal
Reserve Act apply to all federally insured savings associations and any such
"affiliate". A savings and loan holding company, its subsidiaries and any other
company under common control are considered affiliates of the subsidiary savings
association under HOLA. Generally, Sections 23A and 23B: (i) limit the extent to
which the insured institution or its subsidiaries may engage in certain covered
transactions with an affiliate to an amount equal to ten percent (10%) of such
institution's capital and surplus, and contain an aggregate limit on all such
transactions with all affiliates to an amount equal to twenty percent (20%) of
such capital and surplus, and (ii) require that all such transactions be on
terms substantially the same, or at least as favorable to the institution or
subsidiary, as those provided to a non-affiliate. The term "Covered transaction"
includes the making of loans, purchase of assets, issuance of a guarantee and
similar other types of transactions. Also, a savings institution may not make
any loan to an affiliate unless the affiliate is engaged only in activities
permissible for bank holding companies. Only the Federal Reserve Board may grant
exemptions from the restrictions of Sections 23A and 23B. The Commissioner,
however, may impose more stringent restrictions on savings associations for
reasons of safety and soundness.

Qualified Thrift Lender Test

     The regulations require that any savings bank holding company that controls
a savings institution that fails the qualified thrift lender test, as explained
under "Regulation of West Town Savings Bank - Qualified Thrift Lender Test",
must, within one year after the date on which the institution ceases to be a
qualified thrift lender, register as and be deemed a bank holding company
subject to all applicable laws and regulations.

                                      -17-
<PAGE>

                     REGULATION OF WEST TOWN SAVINGS BANK

     As a state-chartered and federally insured savings bank, West Town Savings
Bank is subject to extensive regulation. Lending activities and other
investments must comply with various statutory and regulatory capital
requirements. The Bank is regularly examined by its federal and state regulators
and files periodic reports concerning the Bank's activities and financial
condition. The Bank's relationship with its depositors and borrowers also is
regulated to a great extent by both federal and state laws, especially in such
matters as the ownership of savings accounts and the form and content of the
Bank's mortgage documents.

The Effects of FDICIA

     In December, 1991, the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA") was enacted into law. FDICIA provides for, among other
things, the recapitalization of the Bank Insurance Fund; enhanced federal
supervision of depository institutions, including greater authority for the
appointment of a conservator or receiver for undercapitalized institutions; the
adoption of safety and soundness standards by the federal banking regulators, on
matters such as loan underwriting and documentation, interest rate risk exposure
and compensation and other employee benefits; the establishment of risk-based
deposit insurance premiums; liberalization of the qualified thrift lender test;
greater restrictions of the qualified thrift lender test; greater restrictions
on transactions with affiliates; and mandated consumer protection disclosures
with respect to deposit accounts. See "-Insurance of Accounts and Regulation by
the FDIC," "-Regulatory Capital Requirements" and "-Qualified Thrift Lender
Test".

Insurance of Accounts and Regulation by the FDIC

     The Bank is a member of the Savings Association Insurance Fund ("SAIF")
which is administered by the FDIC. Savings deposits are insured up to $100,000
per insured member (as defined by law and regulation) by the FDIC and such
insurance is backed by the full faith and credit of the United States
Government. As insurer, the FDIC imposes deposit insurance premiums and is
authorized to conduct examination of and to require reporting by the
FDIC-insured institutions. It also may prohibit any FDIC-insured institution
from engaging in any activity the FDIC determines by regulation or order to pose
a serious risk to the FDIC. The FDIC also has the authority to initiate
enforcement actions against savings associations, after giving the OBRE an
opportunity to take such action, and may terminate the deposit insurance if it
determines that the institution has engaged or is engaging in unsafe or unsound
practices, or is in an unsafe or unsound condition.

     Since the Bank is a state-chartered savings bank, the FDIC is its primary
federal regulator.

                                      -18-
<PAGE>

Office of Banks and Real Estate

     The OBRE is the Bank's primary state regulator. As regulator, the OBRE has
extensive authority over the operations of the Bank and other state-chartered
savings banks. As part of this authority, the Bank is required to file periodic
reports with the OBRE and is subject to periodic examination by the OBRE.

     The OBRE established regulations affecting the operations of the Bank,
including regulations that affect the Bank's lending and investment activities.
The OBRE also has extensive enforcement authority, including the issuance of
cease-and-desist and removal orders and the initiation of injunctive actions.

     The OBRE assesses quarterly fees based upon asset size and charges its
regulated institutions for periodic examinations.

Federal Home Loan Bank System

     The FHLB System, consisting of twelve FHLBs, is under the jurisdiction of
the Federal Housing Finance Board ("FHFB"). The designated duties of the FHFB
are to: supervise the FHLBs; ensure that the FHLBs carry out their housing
finance missions; ensure that the FHLBs remain adequately capitalized and able
to raise funds in the capital markets; and ensure that the FHLBs operate in a
safe and sound manner.

     While the Bank is no longer required to be a member since its conversion to
a state- chartered savings bank in 1995, the Bank has chosen to remain a member.
Among other benefits, the FHLB provides a central credit facility primarily for
member institutions. It is funded primarily from proceeds derived from the sale
of consolidated obligations of the FHLB System. It makes advances to members in
accordance with policies and procedures established by the FHFB and the Board of
Directors of the FHLB of Chicago. At March 31, 2001, the Bank had no advances
from the FHLB of Chicago. See "Sources of Funds -Borrowings".

Qualified Thrift Lender Test

     Under FIRREA and state savings bank regulations, a state-chartered savings
bank must maintain at least 60% of its total tangible assets in "qualified
thrift investments" on an average basis in three out of every four quarters and
two out of every three years. Under the QTL statutory and regulatory provisions,
all forms of home mortgages, home improvement loans, home equity loans and loans
on the security of other residential real estate and mobile homes, as well as
shares of FHLB stock, investments or deposits in other insured institutions,
securities issued by the FNMA, FHLMC, GNMA and other mortgage- related
securities, are considered qualified thrift investments. Investments in non-
subsidiary corporations or partnerships whose activities include servicing
mortgages or real estate development are also considered qualified thrift
investments in proportion to the amount of primary revenue such entities derive
from housing-related activities. Also included in qualified thrift investments
are mortgage servicing rights, whether such rights are purchased by the insured
institution or created when the institution sells loans and retains the right to
service such loans.

     A savings bank that fails to become or maintain a qualified thrift lender
shall either become a commercial bank (other than a savings bank) or be subject
to restrictions specified in FIRREA. A savings bank that converts to a
commercial bank must pay applicable exit and entrance fees involved in
converting from the SAIF fund to the BIF fund of the FDIC. A savings bank that
fails to meet the QTL test and does not convert to a commercial bank will be:
(1) prohibited from making any new investment or engaging in activities that
would not be permissible for national banks; (2) prohibited from establishing
any new branch office where a national bank located in the savings institutions
home state would not be able to establish a branch office; (3) ineligible to
obtain new advances from any FHLBs; and (4) subject to limitations on the
payment of dividends comparable to the statutory and regulatory dividend
restrictions applicable to a national bank. Also, beginning three years after
the date on which the savings bank ceases to be a qualified thrift lender, the
savings bank would be prohibited from retaining any investment or engaging in
any activity not permissible for a national bank and would be required to repay
any outstanding advances to any FHLB. A savings bank may requalify as a
qualified thrift lender if it thereafter complies with the QTL test.

     As of March 31, 2001, the Bank was in compliance with the QTL test with a
QTL ratio of 65.79%.

                                      -19-
<PAGE>

Capital Requirements

     Under OBRE regulations, a savings bank must satisfy two minimum capital
requirements: core capital and risk-based capital. Savings banks must meet both
of the standards in order to comply with the capital requirements.

     The minimum core capital requirement is three percent of adjusted total
assets (the "leverage limit" requirement). Core capital is defined to include
common stockholders' equity, non-cumulative perpetual preferred stock and any
related surplus, and minority interests in equity accounts of consolidated
subsidiaries, less (i) any unidentifiable intangible assets (other than
purchased mortgage servicing rights); (ii) the amount by which purchased
mortgage servicing rights exceed the lower of 90% of determinable fair market
value, 90% of original costs, or current amortized book value; and (iii) equity
and debt investments in subsidiaries that are not "includable subsidiaries",
which is defined as subsidiaries engaged solely in activities not impermissible
for a national bank, engaged in activities impermissible for a national bank but
only as an agent for its customers, or engaged solely in mortgage-banking
activities.

     In calculating adjusted total assets, adjustments are made to total assets
to give effect to the exclusion of certain assets from capital and to
appropriately account for the investment in and assets of both includable and
nonincludable subsidiaries.

     The FDIC is required to evaluate capital before approving various
applications by depository institutions. The FDIC also must evaluate capital as
an essential component in determining the safety and soundness of state
nonmember banks it insures and supervises and in determining whether depository
institutions are in any unsafe or unsound condition. Generally, all FDIC insured
banks must maintain "core" or "Tier I" capital of at least 3.0% of total assets.
The rule further provides that a bank operating at or near the 3.0% capital
level is expected to have well diversified risks, including no undue interest
rate risk exposure, excellent control systems, good earnings, high asset
quality, high liquidity and well managed on - and off - balance sheet
activities, and in general, be considered a strong banking organization with
composite 1 rating under the CAMEL rating system for banks. For all but the most
highly rated banks meeting the above conditions, the minimum core capital ratio
will be increased to not less than 4.0% of total assets. Under the regulations
of the OBRE, savings banks are required to maintain a core capital ratio of at
least 3.0%.

     Savings banks must also maintain capital equal to at least 8.0% of risk-
weighted assets. Total capital consists of the sum of core and supplementary
capital, provided that supplementary capital cannot exceed core capital, as
previously defined.

     Supplementary capital includes (i) permanent capital instruments such as
cumulative perpetual preferred stock, perpetual subordinated debt, and mandatory
convertible subordinated debt, (ii) maturing capital instruments such as
subordinated debt, intermediate-term preferred stock and mandatory redeemable
preferred stock, subject to an amortization schedule, and (iii) general
valuation loan and lease allowances. Supplementary capital may not exceed the
Bank's core capital for purposes of calculating the Bank's compliance with
regulatory capital requirements.

     The risk-based capital regulation assigns each balance sheet asset held by
a savings institution to one of four risk categories based on the amount of
credit risk associated with that particular class of assets. Assets not included
for purposes of calculating capital are not included in calculating risk-
weighted assets. The categories range from 0% for cash and U.S. Government
securities that are backed by the full faith and credit of the U.S. Government
up to 100%. Qualifying residential mortgage loans (including multi-family
mortgage loans) are assigned a 50% risk weight.

     The book value of assets in each category is multiplied by the weighing
factor (from 0% to 100%) assigned to that category. These products are then
totaled to arrive to total risk-weighted assets. Off-balance sheet items are
included in risk-weighted assets by converting them to an approximate balance
sheet "credit equivalent amount" base on a conversion schedule. These credit
equivalents are then assigned to risk categories in the same manner as balance
sheet assets and are included in risk-weighted assets.

                                      -20-
<PAGE>

     The FDIC has been considering adopting a proposed rule for adding an
interest rate risk component to the regulatory capital rule. The proposal would
require, if adopted, that an institution hold capital against interest rate risk
exposure in an amount equal to 50% of the market value of portfolio equity
(i.e., aggregate net market value of assets, liabilities, and off-balance sheet
items) that would result from a immediate 200 basis point increase or decrease
in interest rates. If adopted, this component of the risk-based capital
requirement would require that an institution maintain additional capital
related to the amount of risk attendant to its interest rate position.

     At March 31, 2001 and 2000, the Bank met all of its capital requirements.
See Note 13 to the Consolidated Financial Statements in the 2001 Annual Report
to Stockholders.

Dividend Limitations

     OBRE regulations require the Bank to give the OBRE thirty days advance
notice of any proposed declaration of dividends to the Holding Company, and the
OBRE has the authority under its supervisory powers to prohibit the payment of
dividends to the Holding Company. In addition, a Bank may not declare or pay a
cash dividend on its capital stock if the effect thereof would be to reduce the
regulatory capital of the Bank below the amount required for the liquidation
account established pursuant to the Bank's Plan of Conversion. The OBRE imposes
uniform limitations on the ability of savings banks to engage in various
distributions of capital such as dividends, stock repurchases and cash- out
mergers. The regulations utilize a three-tiered approach which permits various
level of distributions based primarily upon the savings bank's capital level.

     In the first tier, a savings bank that has capital in excess of the capital
requirements and that has not been notified by the OBRE that it is in need of
more than normal supervision, may make (without application) capital
distributions during a calendar year up to 100% of its net income to date during
the calendar year, plus one-half its surplus capital ratio at the beginning of
the calendar year. Capital distributions in excess of such amount require
advance approval from the OBRE.

     In the second tier, a savings bank that meets or exceeds its minimum
capital requirement (both before and after the proposed capital distribution),
but which has been notified by the OBRE that it shall be treated as a tier 2
bank because it is in need of more than normal supervision, may make (without
application) capital distributions ranging between 25% and 75% of its net income
during the previous four quarters.

     In the third tier, a savings bank with either capital below its minimum
capital requirements (either before and after the proposed capital
distribution), or a savings bank that meets or exceeds its capital requirement
but which has been notified by the OBRE that it shall be treated as a tier 3
bank because it is in need of more than normal supervision, may not make any
capital distributions without prior approval from the OBRE.

     The Bank has met the criteria to be in the first tier, and consequently,
would be able to distribute up to 100% of its net income during any calendar
year, plus 50% of its surplus capital ratio at the beginning of the calendar
year less any distributions previously paid during the year.

Investment Rules, Loans to One Borrower, and Aggregate Loan Limits

     Under OBRE regulations, the permissible amount of loans-to-one borrower for
state- chartered savings banks is 20% of its unimpaired capital and surplus (25%
if the security for such a loan has a "readily ascertainable" value or 30% for
certain residential development loans) or $500,000. At March 31, 2001, the
lending limitations, in essence, imposed a $655,000 limit on the Bank's
loans-to-one borrower.

     Savings banks and their subsidiaries may not acquire or retain investments
in corporate debt securities that, at the time of acquisition, were not rated in
one of the four highest rating categories by at least one nationally recognized
rating organization. At March 31, 2001, the Bank did not have any corporate debt
securities below investment grade.

                                      -21-
<PAGE>

Restrictions on Loans to Insiders

     FIRREA applies Section 22(h) of the Federal Reserve Act to non-member
savings banks and authorizes the FDIC to impose additional loan-to-insider
restrictions upon savings banks on a case-by-case basis. In general, Section
22(h) prohibits a bank from making loans or extending credit: (i) to any of its
executive officers or any person who directly or indirectly controls more than
10% of any class of voting securities of the bank where the loan amount or
extension of credit, when aggregated with other loans to that person and all
related interests of that person, would exceed 15% of a bank's unimpaired
capital and surplus for loans that are not fully secured by "readily marketable
collateral" and an additional 10% of such capital and surplus for loans fully
secured by such collateral; and (ii) to any of its executive officers, directors
or principal shareholders in an amount exceeding the higher of $25,000 or 5% of
the Bank's unimpaired capital and surplus, unless the loan or extension of
credit is pre-approved by a majority of the entire board of directors with the
interested party abstaining from participating directly or indirectly in the
voting.

     Section 22(h) also requires that all such insider loans or extensions of
credit be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of repayment or
present other unfavorable features. Additionally, with certain exceptions,
Section 22(h) prohibits a member bank from paying an overdraft on an account at
such bank of an executive officer or director. At March 31, 2001, the Bank was
in compliance with restrictions on loans to insiders.

     Regulations issued by the FHLB Board prior to the enactment of FIRREA, in
relevant part, restricted a savings bank's loans to "affiliated persons" to ones
made in the "ordinary course of business" involving not more that the "normal
risks of collectibility" and not exceeding the loan amount that would be
available to members of the general public of similar credit status. According
to former FHLB Board regulations, loans secured by the principal residence of an
affiliated person, home improvement loans for affiliated persons and education,
consumer and credit card loans for affiliated persons must have been pre-
approved by at least a majority of the board of directors of the Bank. The Bank
was authorized, generally, to make such loans (and those secured by the
affiliated person's savings accounts at the Bank) with an interest rate not
below its current cost of funds.

Activities of Savings Bank and Their Subsidiaries

     FDIC and OBRE regulations provide that, when a savings bank establishes or
acquires a subsidiary or elects to conduct any new activity through a subsidiary
that the bank controls, the savings bank shall notify the FDIC and OBRE thirty
days in advance and provide the information each agency may, by regulation,
require. Savings banks also must conduct the activities of subsidiaries in
accordance with existing regulations and orders.

     The FDIC or the OBRE may determine that the continuation by a savings bank
of its ownership control, or its relationship to, the subsidiary constitutes a
serious risk to the safety, soundness, or stability of the bank or is
inconsistent with sound banking practices or with the purposes of the FDIC Act.
Based upon that determination, the FDIC or the OBRE has the authority to order
the savings bank to divest itself of control of the subsidiary. The FDIC also
may determine by regulation or order that any specific activity poses a serious
threat to the SAIF. If so, it may require that no SAIF member engage in that
activity directly. At March 31, 2001, the Bank had West Town Insurance Agency as
a wholly-owned subsidiary.

Brokered Deposits

     FIRREA states that no insured depository institution that fails to meet the
applicable minimum capital requirement may accept funds obtained directly or
indirectly by or through a deposit broker for deposit into one or more deposit
accounts. The FDIC is authorized to waive this prohibition on a case-by-case
basis, but only upon finding that such use of brokered deposits does not
constitute an unsafe or unsound practice. At March 31, 2001, the Bank had no
brokered deposits.

                                      -22-
<PAGE>

Investment Portfolio Policy

     Under OBRE regulations, savings banks are required to adopt and maintain an
investment policy which demonstrates the exercise of prudence in making
investment decisions. Per regulations and generally accepted accounting
principles, a financial institution is required to classify its securities into
one of three categories: securities purchased or held to maturity, securities
available for sale, and securities held for trading. Securities held in the
investment portfolio may be carried at amortized cost if the bank has documented
the intent and ability to hold the securities until maturity. Those being held
for sale or trading are to be carried at fair value. All of the Bank's mortgage-
backed securities are classified as held to maturity, since the Bank had both
the intent and ability to hold these mortgage-backed securities to maturity, in
accordance with Statement of Financial Accounting Standards 115. The Bank's
investments in corporate equity and debt securities are classified as available
for sale, and are recorded at their current fair values. See "Notes to
Consolidated Financial Statements #1 - Accounting Policies - Investment
Securities" in the Annual Report.

Transactions with Affiliates

     Pursuant to FIRREA, all financial institutions must comply with Section 23A
and 23B of the Federal Reserve Act relative to transactions with affiliates in
the same manner and to the same extent as if all were Federal Reserve member
banks. Generally, Sections 23A and 23B: (i) limit the extent to which the
insured institution or its subsidiaries may engage in certain covered
transactions with an affiliate to an amount equal to 10% of such institution's
capital and surplus and place an aggregate limit on all such transactions with
affiliates to an amount equal to 20%of such capital and surplus, and (ii)
require that all such transactions be on terms substantially the same, or at
least as favorable to the institution or subsidiary, as those provided to a non-
affiliate. The term "covered transaction" includes the making of loan, purchases
of assets, issuance of a guaranty and similar other types of transactions.

                                      -23-
<PAGE>

                          FEDERAL AND STATE TAXATION

Federal Taxation

     General. The Company and the Bank report their income on a fiscal year
basis using the accrual method of accounting and are subject to federal income
taxation in the same manner as other corporations with some exceptions,
including particularly the Bank's addition to its reserve for bad debts
discussed below. The following discussion of tax matters is intended only as a
summary and does not purport to be a comprehensive description of the tax rules
applicable to the Bank or the Company. For its taxable year ending March 31,
2001, the Company experienced a net operating loss.

     Bad Debt Reserves. For fiscal years beginning prior to December 31, 1995,
savings institutions which qualified under certain definitional tests and other
conditions of the Internal Revenue Code of 1986 (the "Code") were permitted to
use certain favorable provisions to calculate their deductions from taxable
income for annual additions to their bad debt reserve. A reserve could be
established for bad debts on qualifying real property loans (generally secured
by interests in real property improved or to be improved) under (i) Percentage
of Taxable Income Method (the "PTI Method") or (ii) the Experience Method. The
reserve for nonqualifying loans was computed using the Experience Method.

     The Small Business Job Protection Act of 1996 (the "1996 Act"), which was
enacted on August 20, 1996, made significant changes to provisions of the Code
relating to a savings institution's use of bad debt reserves for federal income
tax purposes and requires such institutions to recapture (i.e., take into
income) certain portions of their accumulated bad debt reserves. The 1996 Act
repeals the reserve method of accounting for bad debts effective for tax years
beginning after 1995. Savings institutions that would be treated as small banks
are allowed to utilize the Experience Method applicable to such institutions,
while savings institutions that are treated as large banks (those generally
exceeding $500 million in assets) are required to use only the specific charge-
off method. Thus, the PTI Method of accounting for bad debts is no longer
available for any financial institution.

     A savings institution required to change its method of computing reserves
for bad debts will treat such change as a change in method of accounting
initiated by the taxpayer, and having been made with the consent of the IRS. Any
Section 481(a) adjustment required to be taken into income with respect to such
change generally will be taken into income ratably over a six-taxable year
period, beginning with the first taxable year beginning after 1995, subject to
the residential loan requirement.

     Under the 1996 Act, for its current and future taxable years, the Bank is
not permitted to make additions to its tax bad debt reserves. In addition, the
Bank is required to recapture (i.e., take into income) over a six year period
the excess of the balance of its tax bad debt reserves as of March 31, 1996
other than its supplemental reserve for losses on loans, over the balance of
such reserves as of March 31, 1988. As a result of such recapture, the Bank will
incur an additional income tax liability of approximately $46,000 over the
recapture period.

                                      -24-
<PAGE>

     Distributions. Under the 1996 Act, if the Bank makes "non-dividend
distributions" to the Company, such distributions will be considered to have
been made from the Bank's unrecaptured tax bad debt reserves (including the
balance of its reserves as of March 31, 1988) to the extent thereof, and then
from the Bank's supplemental reserve for losses on loans, to the extent thereof,
and an amount based on the amount distributed (but not in excess of the amount
of such reserves) will be included in the Bank's income. Non- dividend
distributions include distributions in excess of the Bank's current and
accumulated earnings and profits, as calculated for federal income tax purposes,
distributions in redemption of stock, and distributions in partial or complete
liquidation. Dividends paid out of the Bank's current or accumulated earnings
and profits will not be so included in the Bank's income.

     The amount of additional taxable income triggered by a non-dividend is an
amount that, when reduced by the tax attributable to the income, is equal to the
amount of the distribution. Thus, if the Bank makes a non-dividend distribution
to the Company, approximately one and one-half times the amount of such
distribution (but not in excess of the amount of such reserves) would be
includable in income for federal income tax purposes, assuming a 34% federal
corporate income tax rate. The Bank does not intend to pay dividends that would
result in a recapture of any portion of its bad debt reserves.

     Corporate Alternative Minimum Tax. The Internal Revenue Code (the "Code")
imposes a tax on alternative minimum taxable income ("AMTI") at a rate of 20%.
Only 90% of AMTI can be offset by net operating loss carryovers. AMTI is
increased by an amount equal to 75% of the amount by which a corporation's
adjusted current earnings exceeds its AMTI (determined without regard to this
adjustment and prior to reduction for net operating losses). The Company and its
subsidiaries were not subject to this tax for the year ended March 31, 2001.

     Dividends Received Deduction and Other Matters. The Company may exclude
from its income 100% of dividends received from the Bank as a member of the same
affiliated group of corporations. The corporate dividends received deduction is
generally 70% in the case of dividends received from unaffiliated corporations
with which the Company and the Bank will not file a consolidated tax return,
except that if the Company or the Bank own more than 20% of the stock of a
corporation distributing a dividend 80% of any dividends received may be
deducted.

     Illinois Taxation. The Company and the Bank file Illinois income tax
returns. For Illinois income tax purposes, corporations are presently taxed at a
rate equal to 7.2% of taxable income. For this purpose, "taxable income"
generally means federal taxable income, subject to certain adjustments
(including the addition of interest income on state and municipal obligations
and the exclusion of interest income on United States Treasury obligations). The
exclusion of income on United States Treasury obligations has the effect of
reducing significantly the Illinois taxable income of savings institutions.

                                      -25-
<PAGE>

Impact of New Accounting Standards

     The following does not constitute a comprehensive summary of all material
changes or developments affecting the manner in which the Company keeps its
books and records and performs its financial accounting responsibilities. It is
intended only as a summary of sonic of the recent pronouncements made by the
Financial Accounting Standards Board ("FASB") which are of particular interest
to financial institutions.

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This Statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires all derivatives to be recognized as either assets or liabilities in the
statement of financial condition and to be measured at fair value. As issued,
the Statement is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. In June 1999, the FASB issued SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB No. 133". The Statement is effective upon issuance and it amends SFAS
No. 133 to be effective for all fiscal quarters of fiscal years beginning after
June 30, 2000. The Company adopted these statements as of April 1, 2001, and
this implementation did not have a material impact on its financial position or
results of operations.

     In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities". SFAS No.
140 supersedes and replaces FASB SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". Accordingly,
SFAS No. 140 is now the authoritative accounting literature for transfers and
servicing of financial assets and extinguishments of liabilities. SFAS No. 140
also includes several additional disclosure requirements in the area of
securitized financial assets and collateral arrangements. The provisions of SFAS
No. 140 related to transfers of financial assets are to be applied to all
transfers of financial assets occurring after March 31, 2001. The collateral
recognition and disclosure provisions in SFAS No. 140 are effective for fiscal
years ending after December 15, 2000. The Company anticipates that the adoption
of SFAS No. 140 will not have a material impact on the Company's results of
operation.

                                      -26-
<PAGE>

Additional Item.  Executive Officers of the Registrant.
-------------------------------------------------------

     The following table sets forth certain information regarding the executive
officers of the Company and the Bank who are not also directors.

                                  Age at      Position with the Company and Bank
Name                             03/31/01     and Past Five Years Experience
----                             --------     ----------------------------------

Jeffrey P. Kosobucki                35        Chief Financial Officer of the
                                              Company. Vice President and Chief
                                              Financial Officer of the Bank.

Item 2.  Properties.
--------------------

     The Company is located and conducts its business at the Bank's main office
located in Cicero, located at 4852 West 30th Street, Cicero, Illinois. The Bank
also maintains a branch office located 7820 W. 26th Street, North Riverside,
Illinois. See Note 6 to the Notes to Consolidated Financial Statements for the
net book value of the Bank's premises and equipment.


Item 3.  Legal Proceedings.
---------------------------

     Neither the Company nor its subsidiaries are involved in any pending legal
proceedings, other than routine legal matters occurring in the ordinary course
of business, which in the aggregate involve amounts which are believed by
management to be immaterial to the consolidated financial condition or results
of operations of the Company.


Item 4.  Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------

     None.

                                    PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.
-------------------------------------------------------------------------------

     Information relating to the market for the Registrant's common equity and
related stockholder matters appears in the Registrant's 2001 Annual Report to
Stockholders on Page 27 and is incorporated herein by reference. On May 30,
2001, the Company had 80 registered stockholders.


Item 6.  Selected Financial Data.
---------------------------------

     The above-captioned information appears under "Selected Consolidated
Financial and Other Data of the Company" in the Registrant's 2001 Annual Report
to Stockholders on Pages 8 through 10 and is incorporated herein by reference.


Item 7.  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations.
----------------------

     The above-captioned information appears under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Registrant's
2001 Annual Report to Stockholders on Pages 11 through 26 and is incorporated
herein by reference.


Item 8.  Financial Statements and Supplementary Data.
-----------------------------------------------------

     The Consolidated Financial Statements of West Town Bancorp, Inc. and its
subsidiaries, together with the report thereon by Cobitz, VandenBerg & Fennessy
appear in the Registrant's 2001 Annual Report to Stockholders on Pages F-1
through F-23 and are incorporated herein by reference.

                                      -27-
<PAGE>

Item 9.  Change in and Disagreements with Accountants on Accounting and
-----------------------------------------------------------------------
Financial Disclosure.
---------------------

     None.


                                   PART III


Item 10.  Directors and Executive Officers of the Registrant.
-------------------------------------------------------------

     The information relating to Directors and Executive Officers of the
Registrant is incorporated herein by reference to the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on July 11, 2001, on
Pages 3 through 6. Information concerning Executive Officers who are not
directors is contained in Part I of this report pursuant to paragraph (b) of
Item 401 of Regulation S-K in reliance on Instruction G.


Item 11.  Executive Compensation.
---------------------------------

     The information relating to director and executive compensation is
incorporated herein by reference to the Registrant's Proxy Statement for the
Annual Meeting of Stockholders to be held on July 11, 2001, on Pages 10 through
15.


Item 12.  Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------

     The information relating to security ownership of certain beneficial owners
and management is incorporated herein by reference to the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on July 11, 2001, on
Pages 2 through 4.


Item 13.  Certain Relationships and Related Transactions.
---------------------------------------------------------

     The information relating to certain relationships and related transactions
is incorporated herein by reference to the Registrant's Proxy Statement for the
Annual Meeting of Stockholders to be held on July 11, 2001, on Page 15.

                                      -28-
<PAGE>

                                    PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
--------------------------------------------------------------------------

1.   Independent Auditors' Report*

2.   All Financial Statements*

     (a)    Consolidated Statements of Condition as of March 31, 2001 and 2000.

     (b)    Consolidated Statements of Income for the Years Ended March 31,
            2001, 2000 and 1999.

     (c)    Consolidated Statements of Stockholders' Equity for Years Ended
            March 31, 2001, 2000 and 1999.

     (d)    Consolidated Statements of Cash Flows for the Years Ended March 31,
            2001, 2000 and 1999.

     (e)    Notes to Consolidated Financial Statements


     All schedules have been omitted as the required information is either
     inapplicable or included in the Notes to Consolidated Financial Statements.

3.   Exhibits

     (3)(a) Certificate of Incorporation of West Town Bancorp, Inc.**

     (3)(b) Bylaws of West Town Bancorp, Inc.**

     13     2001 Annual Report to Stockholders

     22     Subsidiaries of the Registrant

     24     Consent of Independent Auditors


     *      Incorporated by reference to the Annual Report to Stockholders for
            the fiscal year ended March 31, 2001, attached as an exhibit hereto.

     **     Incorporated by reference to the Registration Statement on Form S-1,
            and amendments thereto, filed with the Securities and Exchange
            Commission.

                                      -29-
<PAGE>

                                  SIGNATURES



     Pursuant to the requirements of Section 13 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.

                                     WEST TOWN BANCORP, INC.



                                     By:  /s/ Dennis B. Kosobucki
                                          -------------------------------
                                          Dennis B. Kosobucki
DATED:   June 8, 2001                     Chairman of the Board,
                                          President and Chief Executive Officer
                                          (Duly Authorized Representative)



     Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed by the following persons in the capacities and on
the dates indicated.

     Name                       Title                               Date
     ----                       -----                               ----

/s/ Dennis B. Kosobucki         Chairman of the Board               June 8, 2001
--------------------------      President, Chief Executive
Dennis B. Kosobucki             Officer
                                (Principal Executive Officer)

/s/ Jeffrey P. Kosobucki        Vice President and Chief            June 8, 2001
--------------------------      Financial Officer
Jeffrey P. Kosobucki            (Principal Financial Officer
                                and Principal Accounting Officer)

/s/ Edward J. Hradecky          Director                            June 8, 2001
--------------------------
Edward J. Hradecky

/s/ John A. Storcel             Director                            June 8, 2001
--------------------------
John A. Storcel

/s/ James Kucharczyk            Director                            June 8, 2001
--------------------------
James Kucharczyk

/s/ James J. Kemp, Jr.          Director                            June 8, 2001
--------------------------
James J. Kemp, Jr.

                                      -30-
<PAGE>

                 [LETTER HEAD OF COBITZ, VANDENBERG & FENNESSY]



                         INDEPENDENT AUDITORS' REPORT


The Board of Directors
West Town Bancorp, Inc.
Cicero, Illinois

         We have audited the consolidated statements of financial condition of
West Town Bancorp, Inc. and subsidiaries as of March 31, 2001 and 2000 and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for each of the three years in the period ended March 31, 2001. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

         We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of West Town
Bancorp, Inc. and subsidiaries at March 31, 2001 and 2000, and the results of
their operations and their cash flows for each of the three years in the period
ending March 31, 2001, in conformity with generally accepted accounting
principles.


                        /s/ Cobitz, Vandenberg & Fennessy


April 27, 2001
Palos Hills, Illinois

                                      F-1
<PAGE>

                            WEST TOWN BANCORP, INC.
                               AND SUBSIDIARIES
                               ----------------

                Consolidated Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                      March 31,
                                                             ------------------------
                                                                 2001          2000
                                                                 ----          ----
<S>                                                       <C>             <C>
Assets
------

Cash and amounts due from depository institutions          $    370,160       340,342
Interest-bearing deposits                                     6,765,061    10,829,567
                                                             ----------    ----------
   Total cash and cash equivalents                            7,135,221    11,169,909
Mortgage-backed securities, held to maturity
  (fair value: 2001 - $7,621,200;
  2000 - $1,590,600) (note 2)                                 7,501,917     1,575,557
Loans receivable (net of allowance for loan losses:
  2001 - $99,000; 2000 - $58,171) (note 3)                   31,344,877    19,632,826
Stock in Federal Home Loan Bank of Chicago                      200,500       186,400
Other investments, available for sale,
  at fair value (note 4)                                        263,000       248,750
Accrued interest receivable (note 5)                            273,425       151,674
Office properties and equipment - net (note 6)                1,576,557     1,648,374
Prepaid expenses and other assets (note 7)                    1,529,518       344,395
                                                             ----------    ----------

   Total assets                                              49,825,015    34,957,885
                                                             ==========    ==========


Liabilities and Stockholders' Equity
------------------------------------

Liabilities
-----------

Deposits (note 8)                                            45,204,540    30,457,620
Borrowed money (note 9)                                           -             -
Advance payments by borrowers for taxes and insurance            48,311        36,710
Other liabilities (note 10)                                     473,562       296,309
                                                             ----------    ----------
   Total liabilities                                         45,726,413    30,790,639
                                                             ----------    ----------

Stockholders' Equity
--------------------

Preferred stock, $.01 par value; authorized
  100,000 shares; none outstanding                                 -             -
Common stock, $.01 par value; authorized
  400,000 shares; 231,928 shares issued and
  204,787 shares outstanding at March 31, 2001
  and 210,362 shares outstanding at March 31, 2000                2,319         2,319
Additional paid-in capital                                    2,000,877     1,997,261
Retained earnings, substantially restricted                   2,460,055     2,499,062
Accumulated other comprehensive income,
  net of income taxes                                            46,782        31,223
Treasury stock, at cost (27,141 and 21,566 shares
  at March 31, 2001 and 2000)                                  (321,557)     (254,657)
Common stock acquired by Employee Stock Ownership Plan          (89,874)     (107,962)
                                                             ----------    ----------
   Total stockholders' equity (notes 13 and 14)               4,098,602     4,167,246
                                                             ----------    ----------

Commitments and contingencies (notes 15 and 16)

   Total liabilities and stockholders' equity              $ 49,825,015    34,957,885
                                                             ==========    ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-2
<PAGE>

                            WEST TOWN BANCORP, INC.
                               AND SUBSIDIARIES

                       Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                         Years Ended March 31,
                                                -------------------------------------
                                                   2001          2000          1999
                                                   ----          ----          ----
<S>                                          <C>            <C>             <C>
Interest income:
  Loans                                       $ 2,039,014     1,448,545     1,467,693
  Mortgage-backed securities                      337,619        45,271        79,886
  Investment securities                            11,000        11,000        13,071
  Interest-bearing deposits                       549,808       510,749       429,938
  Dividends on FHLB stock                          14,285        12,710        11,589
                                                ---------     ---------     ---------
     Total interest income                      2,951,726     2,028,275     2,002,177
                                                ---------     ---------     ---------

Interest expense:
  Deposits                                      2,078,518     1,244,964     1,222,575
                                                ---------     ---------     ---------

     Net interest income before provision
      for loan losses                             873,208       783,311       779,602
Provision for loan losses (note 3)                 40,829         6,000         6,000
                                                ---------     ---------     ---------
     Net interest income after provision
      for loan losses                             832,379       777,311       773,602
                                                ---------     ---------     ---------

Non-interest income:
  Loan fees and service charges                     8,168        12,530         9,733
  Rental income                                    12,121        10,316         9,720
  Deposit related fees and other income            87,807        27,010        27,872
                                                ---------     ---------     ---------
     Total non-interest income                    108,096        49,856        47,325
                                                ---------     ---------     ---------

Non-interest expense:
  Compensation, employee benefits, and
    related expenses (note 11)                    512,139       376,085       306,867
  Advertising and promotion                        27,200        31,519        12,288
  Occupancy and equipment expenses (note 6)       212,832       130,211        96,003
  Data processing                                  64,769        37,450        42,530
  Federal deposit insurance premiums                6,564        12,933        15,346
  Legal, audit, and examination services           72,175        61,935        52,460
  Other operating expenses                        115,514        90,814        46,429
                                                ---------     ---------     ---------
     Total non-interest expense                 1,011,193       740,947       571,923
                                                ---------     ---------     ---------

Net income (loss) before income taxes             (70,718)       86,220       249,004

Provision for income
  taxes (benefit) (note 12)                       (31,711)       24,184        91,640
                                                ---------     ---------     ---------

     Net income (loss)                        $   (39,007)       62,036       157,364
                                                =========     =========     =========

Earnings (loss) per share - basic             $      (.20)          .30           .75
                                                      ---           ---           ---

Earnings (loss) per share - diluted           $      (.20)          .30           .74
                                                      ---           ---           ---

Dividends declared per common share           $        -             -             -
                                                      ---           ---           ---
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>

                            WEST TOWN BANCORP, INC.
                               AND SUBSIDIARIES
                               ----------------

          Consolidated Statements of Changes in Stockholders' Equity

                       Three Years Ended March 31, 2001

<TABLE>
<CAPTION>
                                                                       Accumulated                Common
                                            Additional                   Other                    Stock
                                   Common    Paid-in      Retained    Comprehensive   Treasury    Acquired
                                   Stock     Capital      Earnings       Income         Stock     by ESOP       Total
                                   ------   ----------   ----------   -------------   ---------   --------      -----
<S>                              <C>        <C>         <C>           <C>            <C>        <C>          <C>
Balance at March 31, 1998         $ 2,319    1,987,127    2,279,662            -      (81,906)   (139,384)    4,047,818

Comprehensive income:
Net income                                                  157,364                                             157,364
 Other comprehensive income,
   net of tax:
  Unrealized holding gain
   during the year                                                        44,832                                 44,832
                                                          ---------      -------                              ---------
Total comprehensive income                                  157,364       44,832                                202,196
                                                          ---------      -------                              ---------
Purchase of treasury stock
  (1,700 shares)                                                                      (25,300)                  (25,300)
Tax benefit related to
  MRP stock                                      2,730                                                            2,730
Contribution to fund ESOP loan                   4,012                                             14,968        18,980
                                    -----    ---------    ---------      -------      -------     -------     ---------
Balance at March 31, 1999           2,319    1,993,869    2,437,026       44,832     (107,206)   (124,416)    4,246,424

Comprehensive income:
Net income                                                   62,036                                              62,036
 Other comprehensive income,
   net of tax:
  Unrealized holding loss
   during the year                                                       (13,609)                               (13,609)
                                                          ---------      -------                              ---------
Total comprehensive income                                   62,036      (13,609)                                48,427
                                                          ---------      -------                              ---------
Purchase of treasury stock
  (12,241 shares)                                                                    (147,451)                 (147,451)
Contribution to fund ESOP loan                   3,392                                             16,454        19,846
                                    -----    ---------    ---------      -------      -------     -------     ---------

Balance at March 31, 2000           2,319    1,997,261    2,499,062       31,223     (254,657)   (107,962)    4,167,246
                                    -----    ---------    ---------      -------      -------     -------     ---------

Comprehensive income:
Net loss                                                    (39,007)                                            (39,007)
 Other comprehensive income,
   net of tax:
  Unrealized holding gain
   during the year                                                        15,559                                 15,559
                                                          ---------      -------                              ---------
Total comprehensive income                                  (39,007)      15,559                                (23,448)
                                                          ---------      -------                              ---------
Purchase of treasury stock
  (5,575 shares)                                                                      (66,900)                  (66,900)
Contribution to fund ESOP loan                   3,616                                             18,088        21,704
                                    -----    ---------    ---------      -------      -------     -------     ---------
Balance at March 31, 2001         $ 2,319    2,000,877    2,460,055       46,782     (321,557)    (89,874)    4,098,602
                                    =====    =========    =========      =======      =======     =======     =========
</TABLE>


See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                            WEST TOWN BANCORP, INC.
                               AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                 Years Ended March 31,
                                                                         -------------------------------------
                                                                            2001         2000         1999
                                                                            ----         ----         ----
<S>                                                                  <C>             <C>          <C>
Cash flows from operating activities:
  Net income (loss)                                                   $    (39,007)      62,036      157,364
   Adjustments to reconcile net income to net cash
    from operating activities:
     Depreciation                                                           90,835       47,049       28,164
     Amortization of cost of stock benefit plans                            21,704       19,846       18,980
     Federal Home Loan Bank stock dividend                                 (14,100)      (3,100)           -
     Provision for loan losses                                              40,829        6,000        6,000
     Decrease in deferred income                                              (442)      (7,142)      (1,519)
     (Increase) decrease in current and deferred federal
       and state income taxes                                                9,269      (31,713)      20,528
     (Increase) decrease in accrued interest receivable                   (121,751)         776       48,597
     Increase (decrease) in accrued interest payable                       136,475       15,002      (39,999)
     Change in prepaid and accrued items, net                              (98,207)     350,078      527,798
                                                                        ----------   ----------    ---------

Net cash provided by operating activities                                   25,605      458,832      765,913
                                                                        ----------   ----------    ---------

Cash flows from investing activities:
     Purchase of investment securities,
       available for sale                                                        -            -     (100,000)
     Proceeds from maturities of investment securities,
       held to maturity                                                          -            -      500,000
     Purchase of mortgage-backed securities,
         held to maturity                                               (6,888,224)    (991,250)           -
     Proceeds from repayments of mortgage-backed
       securities, held to maturity                                        961,864      353,631      693,683
     Purchase of Federal Home Loan Bank stock                                    -       (5,900)           -
     Disbursements for loans originated or purchased                   (20,966,887)  (4,689,865)  (9,751,611)
     Loan repayments                                                     8,077,608    4,461,070    7,357,914
     Participation loans sold                                               82,743      707,011      730,946
     Property and equipment expenditures                                   (19,018)  (1,139,097)    (382,125)
                                                                        ----------   ----------   ----------

Net cash provided for investing activities                             (18,751,914)  (1,304,400)    (951,193)
                                                                        ----------   ----------   ----------

Cash flows from financing activities:
     Purchase of treasury stock                                            (66,900)    (147,451)     (25,300)
     Deposit receipts                                                   42,295,532   15,562,103    8,711,886
     Deposit withdrawals                                               (29,490,329) (12,763,981)  (8,521,811)
     Interest credited to deposit accounts                               1,941,717    1,229,981      975,592
     Increase (decrease) in advance payments by
      borrowers for taxes and insurance                                     11,601       (4,322)       6,482
                                                                        ----------   ----------   ----------

Net cash provided by financing activities                               14,691,621    3,876,330    1,146,849
                                                                        ----------   ----------   ----------

Increase (decrease) in cash and cash equivalents                        (4,034,688)   3,030,762      961,569
Cash and cash equivalents at beginning of year                          11,169,909    8,139,147    7,177,578
                                                                        ----------   ----------   ----------

Cash and cash equivalents at end of year                              $  7,135,221   11,169,909    8,139,147
                                                                        ==========   ==========   ==========

Cash paid during the year for:
    Interest                                                          $  1,942,043    1,229,962    1,262,574
    Income taxes                                                             3,500       56,754       71,112
                                                                        ==========   ==========   ==========
</TABLE>


See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                            WEST TOWN BANCORP, INC.
                               AND SUBSIDIARIES
                               ----------------

                  Notes to Consolidated Financial Statements


1)       Summary of Significant Accounting Policies
         ------------------------------------------

         West Town Bancorp, Inc. (the "Company") is a Delaware corporation
         incorporated on May 6, 1994 for the purpose of becoming the savings
         bank holding company for West Town Savings Bank (the "Bank"). On March
         1, 1995, the Bank converted from a mutual to a stock form of ownership,
         and the Company completed its initial public offering, and with a
         portion of the net proceeds acquired all of the issued and outstanding
         capital stock of the Bank.

         The accounting and reporting policies of the Company and its
         subsidiaries conform to generally accepted accounting principles and to
         general practice within the thrift industry. The preparation of
         financial statements in conformity with generally accepted accounting
         principles requires management to make estimates and assumptions that
         affect the reported amounts of assets and liabilities and disclosures
         of contingent assets and liabilities at the date of the financial
         statements and the reported amounts of revenues and expenses during the
         reporting period. Actual results could differ from those estimates. The
         following is a description of the more significant policies which the
         Company follows in preparing and presenting its consolidated financial
         statements.

         Principles of Consolidation
         ---------------------------

         The accompanying consolidated financial statements include the accounts
         of the Company, and its wholly owned subsidiary, West Town Savings Bank
         and the Bank's wholly owned subsidiary, West Town Insurance Agency,
         Inc. Significant intercompany balances and transactions have been
         eliminated in consolidation.

         Industry Segments
         -----------------

         The Company operates principally in the banking industry through its
         subsidiary bank. As such, substantially all of the Company's revenues,
         net income, identifiable assets and capital expenditures are related to
         banking operations.

         Mortgage-Backed Securities, Held to Maturity
         --------------------------------------------

         Mortgage-backed securities are carried at cost, and adjusted for
         amortization of premiums and accretion of discounts. Premiums and
         discounts are amortized and accreted into income using the level-yield
         method. These securities are not carried at fair value because the
         Company has both the ability and the intent to hold them to maturity.

                                      F-6
<PAGE>

1)       Summary of Significant Accounting Policies (continued)
         ------------------------------------------------------

         Other Investments, Available for Sale
         -------------------------------------

         Investment securities are recorded in accordance with Statement of
         Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain
         Investments in Debt and Equity Securities". SFAS No. 115 requires the
         use of fair value accounting for securities available for sale or
         trading and retains the use of the amortized cost method for
         investments the Company has the positive intent and ability to hold to
         maturity.

         SFAS No. 115 requires the classification of debt and equity securities
         into one of three categories: held to maturity, available for sale, or
         trading. Held to maturity securities are measured at amortized cost.
         Unrealized gains and losses on trading securities are included in
         income. Unrealized gains and losses on available for sale securities
         are excluded from income and reported net of taxes as a separate
         component of stockholders' equity.

         The Company has designated certain equity and debt securities as
         available for sale, and has recorded these investments at their current
         fair values. Unrealized gains and losses are recorded in a valuation
         account which is included, net of income taxes, as a separate component
         of stockholders' equity. Gains and losses on the sale of securities are
         determined using the specific identification method.

         Loans Receivable and Related Fees
         ---------------------------------

         Loans are stated at the principal amount outstanding, net of loans in
         process, deferred fees and the allowance for losses. Interest on loans
         is credited to income as earned and accrued only if deemed collectible.
         Loans are placed on non-accrual status when, in the opinion of
         management, the full timely collection of principal or interest is in
         doubt. As a general rule, the accrual of interest is discontinued when
         principal or interest payments become 90 days past due or earlier if
         conditions warrant. When a loan is placed on nonaccrual status,
         previously accrued but unpaid interest is charged against current
         income.

         Loan origination fees are being deferred in accordance with SFAS No.
         91, "Accounting for Nonrefundable Fees and Costs Associated with
         Originating or Acquiring Loans and Initial Direct Costs of Leases".
         This statement requires that loan origination fees and direct loan
         origination costs for a completed loan be netted and then deferred and
         amortized into interest income as an adjustment of yield over the
         contractual life of the loan.

         The Company has adopted the provisions of SFAS No. 114 "Accounting by
         Creditors for Impairment of a Loan" and SFAS No. 118 "Accounting by
         Creditors for Impairment of a Loan - Income Recognition and
         Disclosures" which impose certain requirements on the measurement of
         impaired loans. These statements apply to all loans that are identified
         for evaluation except for large groups of smaller-balance homogeneous
         loans that are collectively evaluated for impairment. These loans
         include, but are not limited to, residential mortgage and consumer
         installment loans. A loan is considered impaired when it is probable
         that a creditor will be unable to collect contractual principal and
         interest due according to the contractual terms of the loan agreement.
         Management has determined that there were no material amounts of loans
         at March 31, 2001 and 2000, nor during the three years ended March 31,
         2001, which met the definition of an impaired loan.

                                      F-7
<PAGE>

1)       Summary of Significant Accounting Policies (continued)
         ------------------------------------------------------

         Allowance for Loan Losses
         -------------------------

         The determination of the allowance for loan losses involves material
         estimates that are susceptible to significant change in the near term.
         The allowance for loan losses is maintained at a level adequate to
         provide for losses through charges to operating expense. The allowance
         is based upon past loss experience and other factors which, in
         management's judgement, deserve current recognition in estimating
         losses. Such other factors considered by management include growth and
         composition of the loan portfolio, the relationship of the allowance
         for losses to outstanding loans, and economic conditions.

         Management believes that the allowance is adequate. While management
         uses available information to recognize losses on loans, future
         additions to the allowance may be necessary based on changes in
         economic conditions. In addition, various regulatory agencies, as an
         integral part of their examination process, periodically review the
         Company's allowance for losses. Such agencies may require the Company
         to recognize additions to the allowance based on their judgements about
         information available to them at the time of their examination.

         Depreciation
         ------------

         Depreciation of office properties and equipment are accumulated on the
         straight-line basis over estimated lives of the various assets.
         Estimated lives are 15 to 40 years for office buildings, 30 years for
         parking lot improvements, and 5 to 10 years for furniture, fixtures and
         equipment.

         Income Taxes
         ------------

         The Company files a consolidated federal income tax return with its
         subsidiaries. The provision for federal and state taxes on income is
         based on earnings reported in the financial statements. Deferred income
         taxes arise from the recognition of certain items of income and expense
         for tax purposes in years different from those in which they are
         recognized in the consolidated financial statements. Deferred tax
         assets and liabilities are recognized for the estimated future tax
         consequences attributable to differences between the financial
         statement carrying amount of existing assets and liabilities and their
         respective tax bases. Deferred tax assets and liabilities are measured
         using enacted tax rates in effect for the year in which those temporary
         differences are expected to be recovered or settled. The effect on
         deferred tax assets and liabilities of a change in tax rates is
         recognized in income for the period that includes the enactment date.

         Consolidated Statements of Cash Flows
         -------------------------------------

         For the purposes of reporting cash flows, the Company has defined cash
         and cash equivalents to include cash on hand, amounts due from
         depository institutions, and interest-bearing deposits in other
         financial institutions.

                                      F-8
<PAGE>

1)       Summary of Significant Accounting Policies (continued)
         ------------------------------------------------------

         Earnings Per Share
         ------------------

         Basic earnings per share is computed by dividing net income by the
         weighted-average number of common shares outstanding for the period.
         ESOP shares not committed to be released are not considered to be
         outstanding. Diluted earnings per share reflects the potential dilution
         that could occur if securities or other contracts to issue common stock
         were exercised or converted into common stock or resulted in the
         issuance of common stock that then shared in the earnings of the
         entity.

         Weighted average shares used in calculating earnings per share are
         summarized below:

<TABLE>
<CAPTION>
                                                             Years Ended March 31,
                                                   -------------------------------------
                                                      2001          2000          1999
                                                      ----          ----          ----
         <S>                                       <C>             <C>           <C>
         Weighted average number of
           common shares outstanding used
           in basic EPS calculation                  196,539       203,981       209,786
         Add common stock equivalents
           for shares issuable under
           Stock Option Plans                          2,641         2,720         3,566
                                                   ---------       -------       -------

         Weighted average number of shares
           outstanding adjusted for common
           stock equivalents                         199,180       206,701       213,352
                                                   =========       =======       =======

         Net income (loss)                         $ (39,007)       62,036       157,364
         Basic earnings (loss) per share           $    (.20)          .30           .75
         Diluted earnings (loss) per share         $    (.20)          .30           .74
</TABLE>

                                      F-9
<PAGE>

2)       Mortgage-Backed Securities, Held to Maturity
         --------------------------------------------

         Mortgage-backed securities are summarized as follows:

<TABLE>
<CAPTION>
                                                             Gross         Gross
                                            Amortized     Unrealized     Unrealized      Fair
                                               Cost          Gains         Losses        Value
                                            ---------      ----------    ----------    ---------
         March 31, 2001
         --------------
         <S>                                <C>           <C>            <C>           <C>
           Participation Certificates:
             FHLMC                          $   392,761          402         6,763        386,400
             GNMA                             3,260,165       94,135             -      3,354,300
             FNMA                             3,848,991       31,509             -      3,880,500
                                            -----------      -------        ------      ---------

                                            $ 7,501,917      126,046         6,763      7,621,200
                                            ===========      =======        ======      =========


         Weighted average interest rate            7.40%
                                                   ====


         March 31, 2000
         --------------

           Participation Certificates:
             FHLMC                          $    54,359          831           290         54,900
             GNMA                             1,151,003       16,797             -      1,167,800
             FNMA                               370,195            -         2,295        367,900
                                            -----------       ------        ------      ---------

                                            $ 1,575,557       17,628         2,585      1,590,600
                                            ===========       ======        ======      =========


         Weighted average interest rate            7.24%
                                                   ====
</TABLE>

                                      F-10
<PAGE>

3)       Loans Receivable
         ----------------

         Loans receivable are summarized as follows:

<TABLE>
<CAPTION>
                                                                      March 31,
                                                              --------------------------
                                                                   2001           2000
                                                                   ----           ----
         <S>                                                  <C>             <C>
         Mortgage loans:
            One-to-four family                                $ 22,578,763    17,677,995
            Multi-family                                           609,277       253,884
            Nonresidential                                       1,588,884       808,381
            Construction                                         1,090,000     2,047,848
                                                              ------------    ----------

         Total mortgage loans                                   25,866,924    20,788,108
                                                              ------------    ----------

         Other loans:
            Secured lines of credit                              3,590,744             -
            Business loans                                       1,755,688             -
            Loans on deposit accounts                              164,968        26,061
            Consumer loans                                         644,825       191,497
                                                              ------------    ----------

         Total other loans                                       6,156,225       217,558
                                                              ------------    ----------

         Total loans receivable                                 32,023,149    21,005,666
                                                              ------------    ----------

         Less:
            Loans in process                                       500,521     1,235,476
            Deferred loan fees and discounts,
             net of premiums                                        78,751        79,193
            Allowance for loan losses                               99,000        58,171
                                                              ------------    ----------

         Loans receivable, net                                $ 31,344,877    19,632,826
                                                              ============    ==========


         Weighted average interest rate                               7.51%         7.38%
                                                                      ====          ====
</TABLE>

         There were no loans delinquent three months or more at March 31, 2001
         and 2000 respectively. The Bank has established a loan loss reserve of
         $99,000 as required by its internal policies.

         Activity in the allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>
                                                            Years Ended March 31,
                                                    ------------------------------------
                                                      2001          2000          1999
                                                      ----          ----          ----
         <S>                                        <C>             <C>           <C>
         Balance, beginning of year                 $ 58,171        52,171        40,171

         Provision for loan losses                    40,829         6,000         6,000

         Charge-offs                                       -             -             -
                                                    --------        ------        ------

         Balance, end of year                       $ 99,000        58,171        46,171
                                                    ========        ======        ======
</TABLE>

         The Bank has pledged approximately $472,000 in single-family mortgage
         loans as collateral to secure deposits in excess of Federal Deposit
         Insurance Corporation insurance limitations. The balances of these
         loans are at least 110% of the non- insured deposits at March 31, 2001,
         in accordance with the terms of the executed collateralization
         agreements with various depositors.

                                      F-11
<PAGE>


4)       Other Investments, Available for Sale
         -------------------------------------

         This portfolio is being accounted for at fair value in accordance with
         SFAS No. 115. A summary of other investments available for sale is as
         follows:

<TABLE>
<CAPTION>
                                                        Gross       Gross
                                           Amortized  Unrealized  Unrealized     Fair
                                              Cost      Gains       Losses       Value
                                           ---------  ----------  ----------   ---------
         <S>                               <C>        <C>         <C>          <C>
         March 31, 2001
         --------------

         Corporate equity securities       $ 100,000    70,000           -       170,000
         Corporate debt securities           100,000         -       7,000        93,000
                                           ---------    ------      ------       -------

                                           $ 200,000    70,000       7,000       263,000
                                           =========    ======      ======       =======

         March 31, 2000
         --------------

         Corporate equity securities       $ 100,000    70,000           -       170,000
         Corporate debt securities           100,000         -      21,250        78,750
                                           ---------    ------      ------       -------

                                           $ 200,000    70,000      21,250       248,750
                                           =========    ======      ======       =======
</TABLE>

         There were no sales from this portfolio during the years ended March
         31, 2001, 2000 and 1999 respectively. In addition, during the current
         period, the increase in net unrealized gains of $14,250, adjusted for
         the tax effect of $1,309, resulted in a $15,559 credit to stockholders'
         equity.

5)       Accrued Interest Receivable
         ---------------------------

         Accrued interest receivable is summarized as follows:

<TABLE>
<CAPTION>
                                                                         March 31,
                                                                 ------------------------
                                                                     2001           2000
                                                                     ----           ----
         <S>                                                     <C>
         Interest-bearing deposits                                $  14,422        17,616
         Mortgage-backed securities                                  48,489         9,395
         Loan receivable                                            208,220       122,281
         Other                                                        2,294         2,382
                                                                  ---------       -------
                                                                  $ 273,425       151,674
                                                                  =========       =======
</TABLE>

                                      F-12
<PAGE>

6)       Office Properties and Equipment
         -------------------------------

         Office properties and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                                        March 31,
                                                                 -----------------------
                                                                    2001          2000
                                                                    ----          ----
         <S>                                                   <C>             <C>
         Cost:
           Land - Cicero                                       $    25,532        25,532
           Land - North Riverside                                  351,975       351,975
           Office building - Cicero                                426,631       426,631
           Office building - North Riverside                       754,828       753,613
           Furniture, fixtures and equipment                       451,629       433,826
           Automobile                                               36,511        36,511
                                                                 ---------     ---------
                                                                 2,047,106     2,028,088

         Less accumulated depreciation                             470,549       379,714
                                                                 ---------     ---------

                                                               $ 1,576,557     1,648,374
                                                                 =========     =========
</TABLE>

         Depreciation of office properties and equipment for the years ended
         March 31, 2001, 2000 and 1999 amounted to $90,835, $47,049, and $28,164
         respectively.

7)       Prepaid Expenses and Other Assets
         ---------------------------------

         Prepaid expenses and other assets consist of the following:

<TABLE>
<CAPTION>
                                                                        March 31,
                                                                 -----------------------
                                                                    2001          2000
                                                                    ----          ----
         <S>                                                   <C>             <C>
         Current federal and state income tax
           overpayment - net                                   $    48,973        50,620
         Prepaid insurance                                          12,626        14,635
         Other prepaid expenses                                     22,079        30,639
         Cash surrender value of corporate-owned
           life insurance                                           86,263        66,900
         Amounts due on loans serviced by others                 1,233,612       179,514
         Other                                                     125,965         2,087
                                                                 ---------     ---------

                                                               $ 1,529,518       344,395
                                                                 =========     =========
</TABLE>

                                      F-13
<PAGE>

8)       Deposits
         --------

         Deposit accounts are summarized as follows:

<TABLE>
<CAPTION>
                                                                      March 31,
                                                                ------------------------
                                                                   2001          2000
                                                                   ----          ----
         <S>                                                  <C>             <C>
         Passbook accounts                                    $  6,217,668     5,743,002
         Certificates                                           31,659,831    23,181,196
         Demand deposit and money market accounts                7,327,041     1,533,422
                                                                ----------    ----------

           Total                                              $ 45,204,540    30,457,620
                                                                ==========    ==========
</TABLE>

         The composition of deposit accounts by interest rate is as follows:

<TABLE>
<CAPTION>
                                                                      March 31,
                                                                ------------------------
                                                                   2001          2000
                                                                   ----          ----
         <S>                                                  <C>             <C>
         Non-interest bearing                                 $    851,334       265,115
         1.00 - 2.99%                                            6,650,627     5,994,610
         3.00 - 3.99                                                59,094        32,771
         4.00 - 4.99                                             6,731,096     3,654,989
         5.00 - 5.99                                             5,503,536    11,245,441
         6.00 - 6.99                                            23,200,504     9,264,694
         7.00 - 7.99                                             2,208,349          -
                                                                ----------    ----------

           Total                                              $ 45,204,540    30,457,620
                                                                ==========    ==========
</TABLE>

         The weighted average interest rate on deposit accounts at March 31,
         2001 and 2000 was 5.47% and 4.97% respectively.

         A summary of certificates of deposit that mature during the
         twelve-month periods indicated is as follows:

<TABLE>
<CAPTION>
                                                                      March 31,
                                                                ------------------------
                                                                   2001          2000
                                                                   ----          ----
         <S>                                                  <C>             <C>
         Twelve month period ended March 31, 2001             $       -       16,685,638
         Twelve month period ended March 31, 2002               26,647,720     6,024,854
         Twelve month period ended March 31, 2003                4,324,825       194,986
         Twelve month period ended March 31, 2004                  424,007       119,847
         Twelve month period ended March 31, 2005                   45,832       155,871
         Twelve month period ended March 31, 2006
           and thereafter                                          217,447          -
                                                                ----------    ----------

           Total                                              $ 31,659,831    23,181,196
                                                                ==========    ==========
</TABLE>

         Interest expense on deposits consists of the following:

<TABLE>
<CAPTION>
                                                         Years Ended March 31,
                                                   -------------------------------------
                                                      2001          2000          1999
                                                      ----          ----          ----
         <S>                                     <C>             <C>           <C>
         Passbooks                               $   152,632       147,544       156,253
         Certificates                              1,717,006     1,086,131     1,065,000
         Demand deposit and
          money market accounts                      208,880        11,289         1,322
                                                   ---------     ---------     ---------

           Total                                 $ 2,078,518     1,244,964     1,222,575
                                                   =========     =========     =========
</TABLE>

         The aggregate amount of deposit accounts with a balance of $100,000 or
         greater was approximately $8,041,000 and $6,499,000 at March 31, 2001
         and 2000 respectively. Deposits in excess of $100,000 are not insured
         by the Federal Deposit Insurance Corporation.

                                      F-14
<PAGE>

9)       Borrowed Money
         --------------

         In connection with the Company's initial public offering, the Bank
         established an Employee Stock Ownership Plan (ESOP). The ESOP was
         funded by the proceeds from a $177,550 loan from the Company. The loan
         carries an interest rate of nine and one- half percent and matures in
         the year 2005. The loan is secured by the shares of the Company
         purchased with the loan proceeds. The Bank has committed to make
         contributions to the ESOP sufficient to allow the ESOP to fund the debt
         service requirements of the loan.

10)      Other Liabilities
         -----------------

         Other liabilities include the following:
                                                               March 31,
                                                       -----------------------
                                                          2001          2000
                                                          ----          ----

         Deferred income tax liability (a)             $  68,390        62,077
         Accrued interest on deposits                    246,019       109,544
         Accrued real estate taxes                        80,000        41,000
         Accrued audit fees                               16,450        15,300
         Other accounts payable                           62,703        68,388
                                                       ---------       -------

                                                       $ 473,562       296,309
                                                       =========       =======

         (a)   The approximate tax effect of temporary differences that give
               rise to the Company's net deferred tax liability at March 31,
               2001 and 2000 under SFAS No. 109 is as follows:

<TABLE>
<CAPTION>
                                                        Assets      Liabilities        Net
               March 31, 2001                           ------      -----------        ---
               --------------
               <S>                                     <C>          <C>              <C>
               Loan fees deferred for
                financial reporting purposes           $      -             -              -
               Accelerated depreciation for
                tax purposes                                  -        58,387         58,387
               Bad debt reserves established
                for financial reporting purposes        (35,595)            -        (35,595)
               Increases to tax bad debt reserves
                since April 1, 1988                           -        23,196         23,196
               Unrealized gain on securities
                available for sale                            -        16,218         16,218
               Stock dividends deferred for
                tax purposes                                  -         6,184          6,184
                                                       --------       -------        -------

                  Total                                $(35,595)      103,985         68,390
                                                       ========       =======        =======

               March 31, 2000
               --------------
               Loan fees deferred for
                financial reporting purposes           $   (253)            -           (253)
               Accelerated depreciation for
                tax purposes                                  -        33,675         33,675
               Bad debt reserves established
                for financial reporting purposes        (20,915)            -        (20,915)
               Increases to tax bad debt reserves
                since April 1, 1988                           -        30,928         30,928
               Unrealized gain on securities
                available for sale                            -        17,527         17,527
               Stock dividend deferred for
                tax purposes                                  -         1,115          1,115
                                                       --------       -------        -------

                  Total                                $(21,168)       83,245         62,077
                                                       ========       =======        =======
</TABLE>

                                      F-15
<PAGE>

11)      Officer, Director and Employee Plans
         ------------------------------------

         Stock Option Plan
         -----------------

         On July 12, 1995, the stockholders of the Company approved the West
         Town Bancorp, Inc. Stock Option Plan. This is an incentive stock option
         plan for the benefit of the officers and employees of the Company and
         its affiliates and a directors' stock option plan for the benefit of
         outside directors of the Company. The number of shares authorized under
         the Plan is 22,194, equal to 10.0% of the total number of shares issued
         in the Conversion. As of March 31, 2001, 19,429 options had been
         granted, which are exercisable at a rate of 20% per year and expire ten
         years from the date of grant. The following is an analysis of the stock
         option activity for each of the years in the three year period ended
         March 31, 2001 and the stock options outstanding at the end of the
         respective periods:

<TABLE>
<CAPTION>
                                                                    Exercise Price
                                                              --------------------------
                                                 Number
         Options                                of Shares       Per Share        Total
         -------                                ---------     ------------     ---------
         <S>                                    <C>          <C>               <C>
         Outstanding at April 1, 1998             16,171     $ 10.00-11.00     $ 162,358
         Granted                                     748             12.00         8,976
         Exercised                                     -                               -
         Forfeited                                     -                               -
                                                  ------     -------------     ---------
         Outstanding at March 31, 1999            16,919       10.00-12.00       171,334
         Granted                                     700             12.00         8,400
         Exercised                                     -                               -
         Forfeited                                     -                               -
                                                  ------     -------------     ---------
         Outstanding at March 31, 2000            17,619       10.00-12.00       179,734
         Granted                                     700             12.00         8,400
         Exercised                                     -                               -
         Forfeited                                     -                               -
                                                  ------     -------------     ---------
         Outstanding at March 31, 2001            18,319     $ 10.00-12.00     $ 188,134
                                                  ======     =============     =========

         Exercisable at March 31, 2001            16,279     $ 10.00-12.00     $ 164,617
                                                  ======     =============     =========
         Options available for future
           grants at March 31, 2001                2,765
                                                  ======
</TABLE>

         The weighted average fair value of options granted during the years
         ended March 31, 2001, 2000 and 1999 was $12.00, $12.00 and $12.00,
         respectively. As of March 31, 2001, the weighted average exercise price
         for options outstanding was $10.11 with a weighted average remaining
         contractual life of 4.9 years.

         The Company has elected to follow Accounting Principles Board Opinion
         No. 25 "Accounting for Stock Issued to Employees" ("APB 25") and
         related interpretations in accounting for its employee stock options.
         Under APB 25, because the exercise price of the Company's employee
         stock options equals the market price of the underlying stock on the
         date of grant, no compensation expense is recognized.

         The Company has implemented SFAS No. 123 "Accounting for Stock-Based
         Compensation". The Company has retained its accounting method for its
         stock based compensation plans. This statement has only resulted in
         additional disclosures for the Company, and as such, its adoption did
         not have, nor is it expected to have, a material impact on the
         Company's financial condition or its results of operations.

                                      F-16
<PAGE>

11)      Officer, Director and Employee Plans (continued)
         ------------------------------------------------

         The following summarizes the pro forma net income as if the fair value
         method of accounting for stock-based compensation plans had been
         utilized:

<TABLE>
<CAPTION>
                                                         Years Ended March 31,
                                                   -----------------------------------
                                                      2001          2000          1999
                                                      ----          ----          ----
         <S>                                       <C>              <C>          <C>

         Net income (loss) (as reported)           $ (39,007)       62,036       157,364
         Pro forma net income (loss)                 (42,305)       58,882       154,354

         Earnings (loss) per share -
           diluted (as reported)                   $    (.20)          .30           .74
         Pro forma diluted earnings (loss)
           per share                                    (.21)          .28           .72
</TABLE>

         The pro forma results presented above may not be representative of the
         effects reported in pro form net income for future years.

         Employee Stock Ownership Plan
         -----------------------------

         In conjunction with the Conversion, the Bank formed an Employee Stock
         Ownership Plan ("ESOP"). The ESOP covers substantially all employees
         with more than one year of employment and who have attained the age of
         21. The ESOP borrowed $177,550 from the Company and purchased 17,755
         common shares issued in the Conversion. The Bank will make scheduled
         discretionary cash contributions to the ESOP sufficient to service the
         amount borrowed. In accordance with generally accepted accounting
         principles, the unpaid balance of the ESOP loan, which is comparable to
         unearned compensation, is reported as a reduction of stockholders'
         equity. Total contributions by the Bank to the ESOP which were used to
         fund principal and interest payments on the ESOP debt totaled $27,569,
         $27,569 and $27,569 for the years ended March 31, 2001, 2000 and 1999,
         respectively.

         Statement of Position No. 93-6, "Employers' Accounting for Employee
         Stock Ownership Plans" ("SOP No. 93-6") provides guidance for
         accounting for all ESOPs. SOP No. 93-6 requires that the issuance or
         sale of treasury shares to the ESOP be reported when the issuance or
         sale occurs and that compensation expense be recognized for shares
         committed to be released to directly compensate employees equal to the
         fair value of the shares committed. In addition, SOP No. 93-6 requires
         that leveraged ESOP debt and related interest expense be reflected in
         the employer's financial statements. Prior practice was to recognize
         compensation expenses based on the amount of the employer's
         contributions to the ESOP. The application of SOP No. 93-6 results in
         fluctuations in compensation expense as a result of changes in the fair
         value of the Company's common stock; however, any such compensation
         expense fluctuations will result in an offsetting adjustment to
         additional paid-in capital. Additional compensation expense, recognized
         as a result of the implementation of this accounting principle, was
         $3,616, $3,392, and $4,012 for the years ended March 31, 2001, 2000 and
         1999 respectively.

                                      F-17
<PAGE>

12)  Income Taxes
     ------------

     As a result of legislation that changed the method used by many savings
     banks to calculate their bad debt reserve for federal income tax purposes,
     the Bank must recapture that portion of the reserve that exceeds the amount
     that could have been taken under the experience method for tax years
     beginning after December 31, 1987. The legislation also requires thrifts to
     account for bad debts for federal income tax purposes on the same basis as
     commercial banks for tax years beginning after December 31, 1995. The
     recapture is occurring over a six year period. The commencement of the
     recapture by the Bank was delayed two years as the Bank met certain
     residential lending requirements. For the three years ended December 31,
     2001, the Bank recaptured approximately $64,500 in excess bad debt reserves
     resulting in tax payments of approximately $20,000 which were previously
     accrued. The pre-1988 reserve provisions are subject only to recapture
     requirements if the Bank no longer qualifies as a thrift. Tax bad debt
     deductions accumulated prior to 1988 by the Bank and included in retained
     earnings total approximately $412,000. No deferred income taxes have been
     provided for these bad debt deductions and no recapture of these amounts is
     anticipated.

     The provision for income taxes (benefit) consists of the following:

<TABLE>
<CAPTION>
                                                            Years Ended March 31,
                                                    ------------------------------------
                                                       2001          2000          1999
                                                       ----          ----          ----
<S>                                                <C>              <C>           <C>
Current (benefit)                                  $ (39,333)       10,390        82,708
Deferred                                               7,622        13,794         8,932
                                                   ---------        ------        ------

                                                   $ (31,711)       24,184        91,640
                                                   =========        ======        ======
</TABLE>

         A reconciliation of the statutory federal income tax rate to effective
         income tax rate is as follows:

<TABLE>
<CAPTION>
                                                            Years Ended March 31,
                                                    -----------------------------------
                                                      2001          2000          1999
                                                      ----          ----          ----
<S>                                                 <C>            <C>           <C>
Statutory federal income tax rate                    (34.0)%        34.0          34.0
Surtax exemption                                      (5.0)        (11.7)         (2.6)
State income tax                                      (4.7)          6.2           4.7
Other                                                 (1.1)          (.5)           .7
                                                    ------         -----         -----

         Effective income tax rate                   (44.8)%        28.0          36.8
                                                    ======         =====         =====
</TABLE>

         Deferred income tax expense consists of the following tax effects of
         timing differences:

<TABLE>
<CAPTION>
                                                            Years Ended March 31,
                                                    ------------------------------------
                                                       2001          2000          1999
                                                       ----          ----          ----
<S>                                                <C>              <C>           <C>
Loan fees                                          $     253         1,280         1,447
Book loan loss provision in excess
 of tax bad debt deduction                           (14,680)       (2,157)       (2,158)
Compensation related expenses                              -             -        10,330
Depreciation                                          24,712        21,288         7,048
Recapture of bad debt reserve                         (7,732)       (7,732)       (7,735)
Stock dividends deferred for
 tax purposes                                          5,069         1,115             -
                                                   ---------       -------       -------

                                                   $   7,622        13,794         8,932
                                                   =========       =======       =======
</TABLE>

                                      F-18
<PAGE>

13)  Regulatory Capital Requirements
     -------------------------------

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

     Quantitative measures established by regulation to ensure capital adequacy
     require the Bank to maintain minimum amounts and ratios, set forth in the
     table below, of the total risk-based and core capital, as defined in the
     regulations. Management believes, as of March 31, 2001, that the Bank meets
     all capital adequacy requirements to which it is subject.

     The Bank, according to federal regulatory standards, is well-capitalized
     under the regulatory framework for prompt corrective action. To be
     categorized as adequately capitalized, the Bank must maintain minimum total
     risk-based and core ratios as set forth in the table. There are no
     conditions or events since that notification that management believes have
     changed the institution's category.

     At March 31, 2001 and 2000, the Bank's actual capital amounts and ratios,
     minimum amounts and ratios required for capital adequacy purposes and
     minimum amounts and ratios to meet the well-capitalized criteria under
     prompt corrective action provisions, are as follows:

<TABLE>
<CAPTION>
                                                                                     To Be Well-
                                                                                   Capitalized Under
                                                                   For Capital     Prompt Corrective
                                         Actual                Adequacy Purposes     Action Provisions
                                 ----------------------------------------------------------------------
                                  Amount       Ratio            Amount      Ratio      Amount    Ratio
                                 ----------------------------------------------------------------------
<S>                           <C>              <C>          <C>             <C>     <C>          <C>
     March 31, 2001
     --------------

     Risk-based               $ 3,374,982      13.27%       $ 2,034,890     8.00%   $ 2,543,610  10.00%
     Core                       3,275,982       6.68          1,471,930     3.00      2,453,201   5.00

     March 31, 2000
     --------------

     Risk-based               $ 3,353,181      23.01%       $ 1,165,760     8.00%   $ 1,457,200  10.00%
     Core                       3,295,010       9.65          1,024,820     3.00      1,708,030   5.00
</TABLE>

<TABLE>
<CAPTION>
                                                        Core      Risk-based
                                                       Capital     Capital
                                                     ----------   ----------
<S>                                                  <C>          <C>
     March 31, 2001
     --------------

     Stockholders' equity of the Bank                $ 3,275,982    3,275,982
     General loss allowances                                   -       99,000
                                                     -----------   ----------

     Regulatory capital computed                     $ 3,275,982    3,374,982
                                                     ===========   ==========

     March 31, 2000
     --------------

     Stockholders' equity of the Bank                $ 3,295,010    3,295,010
     General loss allowances                                   -       58,171
                                                     -----------   ----------

     Regulatory capital computed                     $ 3,295,010    3,353,181
                                                     ===========   ==========
</TABLE>

                                      F-19
<PAGE>

14)  Stockholders' Equity
     --------------------

     As part of the Conversion, the Bank established a liquidation account for
     the benefit of all eligible depositors who continue to maintain their
     deposit accounts in the Bank after conversion. In the unlikely event of a
     complete liquidation of the Bank, each eligible depositor will be entitled
     to receive a liquidation distribution from the liquidation account, in the
     proportionate amount of the then current adjusted balance for deposit
     accounts held, before distribution may be made with respect to the Bank's
     capital stock. The Bank may not declare or pay a cash dividend to the
     Company on, or repurchase any of, its capital stock if the effect thereof
     would cause the retained earnings of the Bank to be reduced below the
     amount required for the liquidation account. Except for such restrictions,
     the existence of the liquidation account does not restrict the use or
     application of retained earnings.

     In addition the Bank may not declare or pay cash dividends on or repurchase
     any of its shares of common stock if the effect thereof would cause
     stockholders' equity to be reduced below applicable regulatory capital
     maintenance requirements or if such declaration and payment would otherwise
     violate regulatory requirements.

     Unlike the Bank, the Company is not subject to these regulatory
     restrictions on the payment of dividends to its stockholders. However, the
     Company's source of funds for future dividends may depend upon dividends
     received by the Company from the Bank.

15)  Financial Instruments with Off-Balance Sheet Risk
     -------------------------------------------------

     The Company is a party to various transactions with off-balance sheet risk
     in the normal course of business. These transactions are primarily
     commitments to originate and to purchase loans. These financial instruments
     carry varying degrees of credit and interest-rate risk in excess of amounts
     recorded in the consolidated financial statements.

     Commitments to originate mortgage loans of $1,581,000 at March 31, 2001
     represent amounts which the Bank plans to fund within the normal commitment
     period of 60 to 90 days. Of this amount, $580,000 are in fixed rate
     commitments with rates ranging from 6.75% to 7.25% and $1,001,0000 are in
     adjustable rate commitments. Because the credit worthiness of each customer
     is reviewed prior to extension of the commitment, the Bank adequately
     controls its credit risk on these commitments, as it does for loans
     recorded on the balance sheet. The Bank conducts all of its lending
     activities in the Chicagoland area. Management believes the Bank has a
     diversified loan portfolio and the concentration of lending activities in
     these local communities does not result in an acute dependency upon
     economic conditions of the lending region.

     The Bank has approved, but unused, home equity lines of credit of
     approximately $486,000 at March 31, 2001. Approval of lines of credit is
     based upon underwriting standards that generally do not allow total
     borrowings, including the line of credit, to exceed 80% of the estimated
     fair value of the customer's home. In addition, the Bank has approved but
     unused equity lines of credit on various construction and commercial
     projects of approximately $970,000 at March 31, 2001.

     The Federal Home Loan Bank of Chicago has issued an irrevocable letter of
     credit for $510,000 to the State of Illinois on behalf of the Bank in order
     to secure deposits totaling $502,952.

16)  Contingencies
     -------------

     The Bank is, from time to time, a party to certain lawsuits arising in the
     ordinary course of its business, wherein it enforces its security interest.
     Management, based upon discussions with legal counsel, believes that the
     Company and the Bank are not engaged in any legal proceedings of a material
     nature at the present time.

                                      F-20
<PAGE>

17)      Disclosures About the Fair Value of Financial Instruments
         ---------------------------------------------------------

         The following methods and assumptions were used to estimate the fair
         value of each class of financial instruments for which it is
         practicable to estimate that value:

         Cash and cash equivalents: For cash and interest-bearing deposits, the
         carrying amount is a reasonable estimate of fair value.

         Mortgage-backed securities: Fair values for mortgage-backed securities
         are based on average quotes received from a third-party broker.

         Loans receivable: The fair values of mortgage loans are estimated using
         discounted cash flow analyses, using interest rates currently being
         offered for loans with similar terms and collateral to borrowers of
         similar credit quality.

         Other investments: Fair values for other investments are based on
         quoted market prices received from third-party sources.

         Deposit liabilities: The fair value of savings accounts is the amount
         payable on demand at the reporting date. The fair value of fixed
         maturity certificates of deposit is estimated by discounting the future
         cash flows using the rates currently offered for deposits of similar
         original maturities.

         Financial instruments with off-balance sheet risk: Fair values of the
         Company's off-balance sheet financial instruments, which consist of
         loan commitments, are based on fees charged to enter into these
         agreements. As the Company currently charges no fees on these
         instruments, no estimate of fair value has been made.

         The fair value of the Company's off-balance-sheet instruments is
         nominal.

         The estimated fair values of the Company's financial instruments as of
         March 31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                                    March 31, 2001
                                                             ---------------------------
                                                              Carrying          Fair
                                                               Amount           Value
                                                             ----------       ----------
         <S>                                                 <C>              <C>
         Financial assets:
           Cash and cash equivalents                          $  7,135,221     7,135,221
           Mortgage-backed securities                            7,501,917     7,621,200
           Loans receivable, gross                              32,023,149    32,980,600
           Other investments, available for sale                   263,000       263,000

         Financial liabilities:
           Deposits                                             45,204,540    45,127,700


                                                                    March 31, 2000
                                                             ---------------------------
                                                              Carrying          Fair
                                                               Amount           Value
                                                             ----------       ----------
         Financial assets:
           Cash and cash equivalents                          $ 11,169,909    11,169,909
           Mortgage-backed securities                            1,575,557     1,590,600
           Loans receivable, gross                              21,005,666    20,671,700
           Other investments, available for sale                   248,750       248,750

         Financial liabilities:
           Deposits                                             30,457,620    29,930,700
</TABLE>

                                      F-21
<PAGE>

18)      Condensed Parent Company Only Financial Statements
         --------------------------------------------------

         The following condensed statements of financial condition, as of March
         31, 2001 and 2000, and condensed statements of income and cash flows
         for the years ended March 31, 2001, 2000 and 1999 for West Town
         Bancorp, Inc. should be read in conjunction with the consolidated
         financial statements and the notes thereto.

                       Statements of Financial Condition
                              ------------------

<TABLE>
<CAPTION>
                                                                       March 31,
                                                               -------------------------
                                                                    2001          2000
                                                                    ----          ----
         <S>                                                   <C>             <C>
         Assets
         ------

         Cash and cash equivalents                             $   406,173       347,614
         Loans receivable                                          198,363       305,397
         Other investments, available for sale                     263,000       248,750
         Accrued interest receivable                                 3,027         3,033
         Equity investment in subsidiaries                       3,353,786     3,394,518
         Other assets                                                4,475         4,847
                                                               -----------     ---------

                                                                 4,228,824     4,304,159
                                                               ===========     =========

         Liabilities and Stockholders' Equity
         ------------------------------------

         Accrued taxes and other liabilities                        52,418        37,405
         Common stock                                                2,319         2,319
         Additional paid-in capital                              1,988,807     1,988,807
         Retained earnings                                       2,460,055     2,499,062
         Accumulated other comprehensive income,
          net of income taxes                                       46,782        31,223
         Treasury stock, at cost                                  (321,557)     (254,657)
                                                               -----------     ---------

                                                               $ 4,228,824     4,304,159
                                                               ===========     =========
</TABLE>

<TABLE>
<CAPTION>
                                         Statements of Income
                                         --------------------

                                                           Years Ended March 31,
                                                   -------------------------------------
                                                       2001          2000         1999
                                                       ----          ----         ----
         <S>                                       <C>             <C>           <C>
         Interest income                           $  54,457        57,254        56,571
         Loan fees and service charges                   351         1,667           633
         Non-interest expense                        (51,918)      (32,072)      (33,234)
                                                     -------       -------       -------

         Net income before income taxes and
           equity in earnings of subsidiaries          2,890        26,849        23,970
         Provision for income taxes                   (1,165)       (5,613)       (7,970)
                                                     -------       -------       -------

         Net income before equity in
           earnings of subsidiaries                    1,725        21,236        16,000
         Equity in earnings (loss) of subsidiaries   (40,732)       40,800       141,364
                                                     -------       -------       -------

         Net income (loss)                         $ (39,007)       62,036       157,364
                                                     =======       =======       =======
</TABLE>

                                      F-22
<PAGE>

18)      Condensed Parent Company Only Financial Statements (continued)
         --------------------------------------------------------------

                            Statements of Cash Flows
                                 -------------

<TABLE>
<CAPTION>
                                                              Years Ended March 31,
                                                       --------------------------------------
                                                           2001          2000          1999
                                                           ----          ----          ----
         <S>                                            <C>             <C>           <C>
         Operating activities:
           Net income (loss)                            $ (39,007)       62,036       157,364
           Equity in (earnings) loss of
              subsidiaries                                 40,732       (40,800)     (141,364)
           Decrease in accrued interest receivable              6         3,198        11,183
           Change in prepaid and accrued items, net        16,694        21,280         3,190
                                                        ---------       -------       -------

         Net cash provided by
           operating activities                            18,425        45,714        30,373
                                                        ---------       -------       -------

         Investing activities:
           Purchase of investment securities,
             available for sale                                 -             -      (100,000)
           Loan disbursements                             (20,686)     (286,753)     (182,736)
           Loan repayments                                127,720       187,321       274,164
                                                        ---------       -------       -------

         Net cash provided by (for)
           investing activities                           107,034       (99,432)       (8,572)
                                                        ---------       -------       -------

         Financing activities:
           Purchase of treasury stock                     (66,900)     (147,451)      (25,300)
                                                        ---------       -------       -------

         Net cash provided for
           financing activities                           (66,900)     (147,451)      (25,300)
                                                        ---------       -------       -------

         Increase (decrease) in cash and
            cash equivalents                               58,559      (201,169)       (3,499)

         Cash and cash equivalents at
            beginning of year                             347,614       548,783       552,282
                                                        ---------       -------       -------

         Cash and cash equivalents at
            end of year                                 $ 406,173       347,614       548,783
                                                        =========       =======       =======
</TABLE>


                                      F-23