10-Q 1 d10qbigfoot.txt BIG FOOT FINANCIAL CORP SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 10-Q (Mark One) [ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2001 OR [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 0-21491 Big Foot Financial Corp. (Exact name of registrant as specified in its charter) ILLINOIS 36-410848-0 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1190 RFD, Long Grove, IL 60047-7304 (Address of principal executive offices) (Zip Code) (847) 634-2100 (Registrant's telephone number including area code) NA (Former name, former address and former fiscal year, if changed from last Report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes X No -- -- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. OUTSTANDING AT CLASS NOVEMBER 5, 2001 ----- ---------------- Common Stock, Par Value $.01 1,509,168

~~BIG~~TABLE ~~FOOT~~OF CONTENTS PART I - FINANCIAL ~~CORP.~~INFORMATION ~~AND~~ITEM ~~SUBSIDIARY~~1. ~~CONSOLIDATED~~FINANCIAL STATEMENTS OF BIG FOOT FINANCIAL ~~CONDITION~~CORP. ~~(Unaudited)~~Consolidated ~~(In~~Statements ~~thousands,~~of ~~except~~Financial ~~share~~Condition ~~data~~(Unaudited) ~~MARCH~~September ~~31, JUNE~~ 30, 2001 ~~2000 ---------- ---------- ASSETS Cash~~ and ~~due~~June ~~from banks .................................................... $ 3~~30,~~122~~ ~~$ 2,905 Interest-earning deposits~~ 2001...........................................~~.......~~ ~~9,640~~Page 3~~,429~~ ~~Mortgage-backed~~Consolidated ~~securities~~Statements ~~held-to-maturity,~~of atEarnings ~~amortized cost~~ (~~fair~~Unaudited) ~~value~~- ofThree ~~$8,909~~months atended ~~March~~September 3130, 2001 and ~~$17,227 at June 30,~~ 2000)..... ~~8,852 17,894 Mortgage-backed securities available-for-sale, at fair value~~ ............... ~~15,465 19,469 Investment securities at fair value~~ ..........................~~..............~~ ~~8,771~~Page ~~7,511~~4 ~~Loans~~Consolidated ~~receivable,~~Statements ~~net ...................................................... 162,759 155,187 Accrued interest receivable ................................................ 910 954 Stock in Federal Home Loan Bank~~ of ~~Chicago,~~Cash atFlows ~~cost~~(Unaudited) ~~........................ 3,636 3,300 Foreclosed real estate .....................................................~~ -- 78Three ~~Office~~months ~~properties~~ended ~~and~~September ~~equipment~~30, ~~net~~2001 ~~....................................... 4,307 4,512 Prepaid expenses~~ and ~~other assets~~ 2000.......................................... ~~341 435 -------- -------- Total assets~~ ....~~...........................................................~~ ~~$217,803~~Page ~~$215,674~~5 ~~========~~Notes ~~========~~to ~~LIABILITIES~~Unaudited ~~Noninterest-bearing~~Consolidated ~~NOW~~Financial ~~accounts~~ Statements...........................~~................~~ $Page 6~~,349~~ $ITEM ~~6,592 Interest-bearing NOW accounts~~ 2.~~.............................................~~ ~~8,060~~MANAGEMENT'S ~~8,944~~DISCUSSION ~~Money~~AND ~~market~~ANALYSIS ~~demand~~OF ~~accounts~~FINANCIAL ~~...............................................~~CONDITION ~~9,230~~AND ~~10,752~~RESULTS ~~Passbook~~OF ~~accounts~~ OPERATIONS......................................................~~....~~ ~~37,314~~Page ~~37,447~~8 ~~Certificates~~ITEM ~~of deposit~~ 3.~~...................................................~~ ~~64,773~~QUANTITATIVE ~~51,759~~AND ~~--------~~QUALITATIVE ~~--------~~DISCLOSURES ~~Total~~ABOUT ~~savings~~MARKET ~~deposits~~ RISK.....................~~................................~~ ~~125,726~~Page ~~115,494~~13 ~~Borrowed~~PART ~~money~~II ~~.............................................................~~- ~~57,000~~OTHER ~~66,000~~INFORMATION ~~Advance~~ITEM ~~payments by borrowers for taxes and insurance~~ 1.~~.....................~~ ~~1,907~~LEGAL ~~2,054 Accrued interest payable and other liabilities~~ PROCEEDINGS............................. ~~3,194 3,514 -------- -------- Total liabilities~~ .................................~~.........................~~ ~~187,827~~Page ~~187,062~~13 ~~--------~~ITEM ~~-------- STOCKHOLDERS' EQUITY Preferred stock, $~~2.01 ~~par~~CHANGES ~~value,~~IN ~~2,000,000~~SECURITIES ~~shares~~AND ~~authorized;~~USE ~~none~~OF ~~issued~~ PROCEEDS......................................~~............~~ --Page --13 ~~Common~~ITEM ~~stock, $~~3.01 ~~par~~DEFAULTS ~~value,~~UPON ~~8,000,000~~SENIOR ~~shares authorized; 2,512,750 shares issued~~ SECURITIES.................................................. 25Page 2514 ~~Treasury~~ITEM ~~stock,~~4. atSUBMISSION ~~cost~~OF ~~(808,082~~MATTERS ~~shares~~TO atA ~~March~~VOTE ~~31,~~OF ~~2001~~SECURITY ~~and 767,082 shares at June 30, 2000)~~ HOLDERS............................~~..................~~ ~~(10,080)~~Page ~~(9,567)~~14 ~~Additional~~ITEM ~~paid-in capital~~ 5.~~................................................~~ ~~24,492~~OTHER ~~24,455 Retained earnings-substantially restricted~~ INFORMATION................................. ~~17,341 16,948 Common stock acquired by Employee Stock Ownership Plan~~ ..................... ~~(1,306) (1,306) Common stock acquired by Recognition and Retention Plan~~ ........~~............~~ ~~(823)~~Page ~~(1,040)~~14 ~~Accumulated~~ITEM ~~other comprehensive income (loss)~~ 6.~~.............................~~ ~~327~~EXHIBITS ~~(903)~~AND ~~--------~~REPORTS ~~--------~~ON ~~Total~~FORM ~~stockholders' equity~~ 8-K................................................. ~~29,976~~Page ~~28,612~~14 ~~-------- -------- Total liabilities and stockholders' equity ................................. $217,803 $215,674 ======== ========~~SIGNATURES

BIG FOOT FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (In thousands, except share data)

~~BIG~~SEPTEMBER ~~FOOT FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands~~30, ~~except~~JUNE ~~per share data) FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED ENDED MARCH 31~~30, ~~MARCH~~2001 ~~31,~~2001 --------------~~-------~~ --------------~~-------~~ ~~2001~~ASSETS ~~2000~~Cash ~~2001~~and ~~2000~~due ~~----------~~from ~~---------~~banks......................................................... ~~---------~~$ ~~---------~~3,480 ~~INTEREST~~$ ~~INCOME~~2,641 ~~Mortgage~~Interest-~~backed~~earning ~~securities held-to-maturity~~ deposits....................................................... $6,846 ~~150~~9,170 $Mortgage-backed ~~311~~securities held-to-maturity, at amortized cost (fair value of $7,353 ~~494~~at September 30, 2001 and $8,111 1at June 30,~~009~~ 2001)...... 7,182 8,080 Mortgage-backed securities available-for-sale, at fair value.................... ~~257~~13,049 ~~342~~14,328 ~~848~~Investment 1securities available-for-sale,~~082~~ at fair value......................... 6,535 6,442 Investment securities held-to-maturity, at cost.................................. ~~145~~3,000 543,000 ~~426 162~~ Loans receivable, net........................................................... 2176,~~924~~718 2170,~~590~~188 ~~8,633~~Accrued ~~7,605~~interest ~~Interest-earning deposits~~ receivable..................................................... 821,157 601,009 ~~199~~Stock ~~193~~in Federal Home Loan Bank of Chicago, ~~stock~~at cost............................. 623,759 563,699 ~~199~~Office ~~143~~properties ~~-------~~and ~~-------~~equipment, ~~-------~~net............................................ ~~-------~~4,146 ~~Total~~4,215 ~~interest~~Prepaid ~~income~~expenses and other assets............................................... ~~3,620~~314 ~~3,413~~872 ~~10,799 10,194~~ ------- ------- ------- ------- ~~INTEREST~~Total ~~EXPENSE Savings deposits~~ assets.................................................................... 1$226,~~265~~186 1$223,~~055~~644 ~~3,385~~============== ~~3,184~~============== ~~Borrowed~~LIABILITIES ~~money~~Noninterest-bearing NOW accounts................................................ ~~867~~$ ~~799 2~~6,~~964~~417 2$ 6,~~306~~918 Interest-~~------~~bearing ~~-------~~NOW ~~------- ------- Total interest expense~~ accounts................................................... 29,~~132~~639 110,~~854~~272 ~~6,349~~Money ~~5,490~~market ~~-------~~demand ~~-------~~accounts.................................................... ~~-------~~9,992 ~~-------~~9,460 ~~Net~~Passbook ~~interest income before provision for loan losses~~ accounts............................................................... 136,~~488~~121 135,~~559~~396 ~~4,450~~Certificates ~~4,704~~of ~~Provision for loan losses~~ deposit......................................................... --69,181 --66,161 -- -- ------- ---~~----~~ ------- ------- ~~Net~~Total ~~interest~~savings ~~income after provision for loan losses~~ deposits.......................................................... 1131,~~488~~350 1128,~~559~~207 ~~4,450~~Borrowed ~~4,704 ------- ------- ------- ------- NONINTEREST INCOME Service fees~~ money.................................................................. 6561,000 5761,000 ~~197~~Advance ~~193~~payments ~~Gain~~by onborrowers ~~sale~~for oftaxes ~~securities~~and ~~available-for-sale~~ insurance.......... ~~149 -- 149 -- Other~~ ................. 2,511 2,240 Accrued interest payable and other liabilities.................................. 183,333 84,115 ~~51 35~~ ------- ------- ------- ------- Total ~~noninterest income~~ liabilities............................................................... ~~232~~198,194 65195,562 ~~397 228~~ ------- ------- ------- ------- ~~NONINTEREST~~STOCKHOLDERS' ~~EXPENSE~~EQUITY ~~Compensation~~Preferred ~~and~~stock, ~~benefits~~$.01 par value, 2,000,000 shares authorized; none issued....... - - Common stock, $.01 par value, 8,000,000 shares authorized; 2,512,750 shares issued...................... ~~767 775 2,215 2,312 Office occupancy~~ ................................................. ~~281~~25 ~~289~~25 ~~795~~Treasury ~~848~~stock, ~~Federal~~at ~~deposit~~cost ~~insurance~~(1,003,582 ~~premiums~~shares at September 30, 2001 and 965,082 shares at June 30, 2001)..................... ~~6 6 18 43 Real estate held for sale and development~~ ................................ --(13,179) --(12,582) Additional paid--in ~~8 Professional services~~ capital.................................. ~~107 212 414 540 Other~~ .................... 24,461 24,437 Retained earnings-substantially restricted...................................... ~~177~~17,756 ~~158~~17,580 ~~554~~Common ~~540~~stock ~~-------~~acquired ~~-------~~by ~~-------~~Employee ~~-------~~Stock ~~Total~~Ownership ~~noninterest expense~~ Plan..........................~~....~~ (1,~~338~~106) (1,~~440~~106) ~~3,996~~Common ~~4,291~~stock ~~-------~~acquired ~~-------~~by ~~-------~~Recognition ~~-------~~and ~~Income~~Retention ~~before income taxes~~ Plan.........................~~....~~ ~~382~~(643) ~~184~~(709) ~~851~~Accumulated ~~641~~other ~~Income~~comprehensive ~~tax expense~~ income.......................................... ~~107~~678 65437 ~~219 232~~ ------- ------- ------- ------- ~~NET~~Total ~~INCOME~~stockholders' ~~$ 275 $ 119 $ 632 $ 409 ======= ======= ======= ======= -------------------------------------------------------------------------------------------------- Earnings per share: Basic~~ equity................................................ ~~$ 0~~.17..... $27,992 ~~0.06~~28,082 $-------------- ~~0.39~~-------------- $Total ~~0.20~~liabilities ~~Diluted~~and stockholders' equity......................................~~........~~ ~~0.17~~$226,186 ~~0.06~~$223,644 ~~0.39~~============== ~~0.20~~==============

(SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS)

BIG FOOT FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF ~~CASH~~EARNINGS ~~FLOWS~~ (Unaudited) (In thousands, except per share data) FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, ---------------------------- 2001 2000 --------------- ------------ ~~CASH~~INTEREST ~~FLOWS~~INCOME ~~FROM~~Mortgage-backed ~~OPERATING~~securities ~~ACTIVITIES: Net income~~ held-to-maturity......................... $ 120 $ 190 Mortgage-backed securities available-for-sale.......................~~..............~~ $202 ~~632~~304 $Investment ~~409~~in ~~Adjustments~~mutual tofunds ~~reconcile net income to net cash provided by operating activities: Depreciation~~ and ~~amortization~~preferred stock...................... 156 136 Loans receivable..................... ~~322 365 Market adjustment for committed ESOP shares~~ ............................... 373,070 412,810 ~~Amortization~~Interest-earning ~~of award of RRP shares~~ deposits........................................... ~~217~~53 ~~286~~39 ~~Gain~~Federal onHome ~~sale~~Loan Bank of ~~securities~~Chicago ~~available-for-sale~~ stock............................. ~~(149)~~58 65 ------------ ~~Net~~------------ ~~amortization~~Total ofinterest ~~deferred loan fees~~ income............................................... ~~(45)~~3,659 ~~(47)~~3,544 ~~Net~~------------ ~~amortization~~------------ ofINTEREST ~~discounts~~EXPENSE ~~and~~Savings ~~premiums~~ deposits.............................. ~~94 255 Decrease in accrued interest receivable~~ ...................... 1,222 1,026 Borrowed money........... ~~44 29 Decrease in prepaid expenses and other assets~~ ........................... ~~94 28 Decrease in accrued interest payable and other liabilities, net~~ ................ ~~(938)~~810 ~~(526)~~1,035 ------------ ------------ ~~Net~~Total ~~cash~~interest ~~provided by operating activities~~ expense.............................................. ~~308~~2,032 ~~840~~2,061 ------------ ------------~~----------------------------------------------------------------------------~~ ~~CASH~~Net ~~FLOWS~~interest ~~FROM~~income ~~INVESTING~~before ~~ACTIVITIES:~~provision ~~Origination~~for ofloan ~~loans receivable~~ losses................~~.........................~~ ~~(20~~1,~~466)~~627 ~~(21~~1,~~875)~~483 ~~Principal~~Provision ~~repayment~~for onloan ~~loans receivable~~ losses................................. ~~12,939 12,469 Principal repayments on mortgage-backed securities held-to-maturity~~ .......... ~~8,981~~- ~~6,502~~- ~~Principal repayments on mortgage~~-~~backed~~----------- ~~securities available~~-~~for~~-~~sale~~---------- ~~...~~Net ~~4,813~~interest ~~4,237~~income ~~Purchase~~after ofprovision ~~investment~~for ~~securities~~loan losses.................~~......................~~ (1,~~386)~~627 ~~(350)~~1,483 ~~Proceeds~~------------ ~~from~~------------ ~~sale~~NONINTEREST ofINCOME ~~investment~~Service ~~securities~~ fees............................. ~~1,280 -- Purchase of stock in Federal Home Loan Bank of Chicago~~ .................. ~~(336) (200) Proceeds from sale of real estate held for development~~ ......... 74 65 Other......... ~~-- 154 Proceeds from sale of foreclosed real estate~~ ............................ ~~78 -- Purchase of office properties and equipment, net~~ .......................... ~~(117)~~10 ~~(125)~~23 ------------ ------------ ~~Net~~Total ~~cash~~noninterest ~~provided by investing activities~~ income............................................ ~~5,786~~84 ~~812~~88 ------------ ------------~~----------------------------------------------------------------------------~~ ~~CASH~~NONINTEREST ~~FLOWS~~EXPENSE ~~FROM~~Compensation ~~FINANCING~~and ~~ACTIVITIES: Net increase (decrease) in savings deposits~~ benefits........................................... ~~10,232~~737 ~~(3,618)~~769 ~~Proceeds~~Office ~~from borrowed money~~ occupancy.................................................... ~~39,000~~295 ~~26,000~~258 ~~Repayment~~Federal ofdeposit ~~borrowed~~insurance ~~money~~ premiums.................................. 6 6 Professional services........... ~~(48,000) (22,000) Increase in advance payments by borrowers for taxes and insurance~~ ....... ~~(147) (166) Payment of cash dividend~~ ............................. 116 178 Other................... ~~(238) (317) Purchase of treasury stock~~ .............................................. ~~(513)~~174 ~~(4,556)~~166 ------------ ------------ ~~Net~~Total ~~cash~~noninterest ~~provided by (used in) financing activities~~ expense........................................... ~~334~~1,328 (41,~~657)~~377 ------------ ------------~~----------------------------------------------------------------------------~~ ~~Net~~Income ~~increase~~before ~~(decrease)~~income ~~in cash and cash equivalents~~ taxes.......................................... ~~6,428~~383 ~~(3,005)~~194 ~~Cash~~Income ~~and~~tax ~~cash equivalents at the beginning of the period~~ expense.................................................. ~~6,334~~123 ~~10,627~~37 ------------ ------------ ~~CASH~~NET ~~AND~~INCOME ~~CASH~~$ ~~EQUIVALENTS~~260 ~~AT THE END OF THE PERIOD ......................~~ $ ~~12,762~~157 $============ ~~7,622~~============ ------------------------------------------------------------------------------------------------------ ~~SUPPLEMENTAL~~Earnings ~~DISCLOSURE~~per ~~OF CASH FLOW INFORMATION~~share: ~~Cash paid during the period for: Interest~~ Basic............................................................ $ ~~6,232~~0.18 $ ~~5,529~~0.10 ~~Income taxes~~ Diluted.......................................................... ~~175~~0.18 ~~350~~0.10

(SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS) BIG FOOT FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)

~~THREE~~FOR ~~MONTHS~~THE ~~ENDED~~THREE ~~NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, ~~MARCH 31,~~ ---------------------------- 2001 2000 ------------ ------------- ~~2001~~CASH ~~2000~~FLOWS ~~2001~~FROM ~~2000~~OPERATING ACTIVITIES: Net income.............................................................................. $ 260 $ 157 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization........................................................... 106 108 Market adjustment for committed ESOP shares............................................. 24 7 Amortization of award of RRP shares..................................................... 66 95 Federal Home Loan Bank of Chicago stock dividends....................................... (60) (55) Net amortization of deferred loan fees.................................................. (15) (8) Net amortization of discounts and premiums.............................................. 27 59 Increase in accrued interest receivable................................................. (148) (20) Decrease in prepaid expenses and other assets........................................... 558 60 Decrease in accrued interest payable and other liabilities, net......................... (900) (1,018) ------------ ------------- Net cash used in operating activities................................................... (82) (615) ----------- ------------------------------------------------------------------------------------------------------------- ~~BASIC~~CASH FLOWS FROM INVESTING ACTIVITIES: ~~Net~~Origination ~~income~~of loans receivable......................................................... $(13,950) ~~275~~(7,~~000~~554) $Principal ~~119,000~~repayment $of ~~632,000~~loans $receivable................................................. ~~409~~7,~~000~~435 ~~Weighted~~3,377 ~~average~~Principal ~~shares~~repayments ~~outstanding~~on mortgage-backed securities held-to-maturity..................... 1885 6,~~594,477~~526 Principal repayments on mortgage-backed securities available-for-sale................... 1,~~878,835~~531 1,~~601,381~~069 ~~2,009,515~~Purchase ~~Basic~~of ~~earnings~~stock ~~per~~in ~~share~~Federal Home Loan Bank of Chicago....................... 0.17.......... 0- (145) Proceeds from sale of foreclosed real estate.06........................................... 0- 78 Purchase of office properties and equipment, net.39....................................... 0(37) (45) ------------ ------------- Net cash provided by (used in) investing activities.20.................................... ~~DILUTED~~(4,136) 3,306 ------------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Net ~~income~~increase (decrease) in savings deposits.............................................. $3,143 ~~275~~(4,~~000~~482) $Net ~~119,000~~increase $in ~~632,000~~borrowed $money........................................................... ~~409~~- 4,000 ~~Weighted~~Increase ~~average~~(decrease) ~~shares~~in ~~outstanding~~advance payments by borrowers for taxes and insurance............. ~~1,594,477~~271 (1,~~878,835~~037) ~~1,601,381~~Payment ~~2,009,515~~of ~~Effect~~cash ofdividend................................................................. ~~dilutive~~(84) ~~stock~~(80) ~~options~~Purchase ~~outstanding~~of treasury stock............................................................... ~~505~~(597) (159) -- ---------- ------------- ~~Diluted~~Net ~~weighted~~cash ~~average~~provided ~~shares~~by ~~outstanding~~(used in) financing activities...................................... 12,~~594,982~~733 (1,~~878,835~~758) ------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in cash and cash equivalents..................................... (1,~~601~~485) 933 Cash and cash equivalents at beginning of the period..................................... 11,~~381~~811 26,~~009,515~~334 ~~Diluted~~------------ ~~earnings~~------------- ~~per~~CASH ~~share~~AND CASH EQUIVALENTS AT END OF THE PERIOD..................... 0.~~17 0~~.06.................... 0$10,326 $ 7,267 ------------------------------------------------------------------------------------------------------------------------ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest.39.................................................................... 02,216 2,063 Income taxes.20................................................................ - -

(SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS) BIG FOOT FINANCIAL CORP. AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (1) BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Big Foot Financial Corp. (the "COMPANY") and its wholly-owned subsidiary, Fairfield Savings Bank, F.S.B. (the "Bank") as of September 30, 2001 and June 30, 2001 and for the three month periods ended September 30, 2001 and 2000. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. In the opinion of management the unaudited consolidated financial statements include all necessary adjustments, consisting of normal recurring accruals, necessary for a fair presentation for the periods presented. These consolidated financial statements should be read in conjunction with the audited financial statements for the year ended June 30, 2001, and the notes thereto included in the Company's 2001 Annual Report on Form 10-K. The Company believes that the disclosures are adequate to make the information presented not misleading; however, the results for the periods presented are not necessarily indicative of results to be expected for the entire fiscal year. (2) EARNINGS PER SHARE Earnings per share of common stock are calculated according to the guidelines of the Financial Accounting Standards Board's ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 128 "Earnings per Share" ("Statement 128"). ESOP shares are only considered outstanding for earnings per share calculations when they are released or committed to be released. Presented below are the calculations for basic and diluted earnings per share: THREE MONTHS ENDED SEPTEMBER 30, ---------------------------- 2001 2000 ------------ ------------ BASIC: Net income ....................................... $ 260,000 $ 157,000 Weighted average shares outstanding .............. 1,416,233 1,607,794 Basic earnings per share ......................... $ 0.18 $ 0.10 DILUTED: Net income ....................................... $ 260,000 $ 157,000 Weighted average shares outstanding .............. 1,416,233 1,607,794 Effect of dilutive stock options outstanding ..... 1,247 -- Diluted weighted average shares outstanding ...... 1,417,480 1,607,794 Diluted earnings per share ....................... $ 0.18 $ 0.10 (3) COMPREHENSIVE INCOME The Company's comprehensive income for the three month periods ended September 30, 2001 and 2000 is as follows: THREE MONTHS ENDED SEPTEMBER 30, --------------------- 2001 2000 --------- --------- Net income ............................................. $260,000 $157,000 Other comprehensive income, net of tax: Unrealized holding gains arising during the period .. 241,000 468,000 -------- -------- Comprehensive income ................................... $501,000 $625,000 ======== ======== (4) DIVIDEND DECLARATION On August 15, 2001, the Board of Directors declared a quarterly dividend of $.06 per share, which was paid on September 15, 2001 to stockholders of record on August 31, 2001. (5) STOCK REPURCHASE PROGRAMS The Repurchase Programs adopted by the Company authorized the repurchase of 1,016,099 shares, or over 40 percent of the 2,512,750 shares of common stock issued in the Company's initial public offering. At September 30, 2001, 1,003,582 shares have been repurchased at an average cost of $13.13 per share. Additional authorizations to repurchase stock may be made from time to time at the discretion of the Board of Directors. Management continues to believe that stock repurchase programs are an effective capital management tool and provide enhanced value to both the Company and its stockholders. 7 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains certain forward looking statements consisting of estimates with respect to the financial condition, results of operations and business of the Company that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include: changes in general, economic and market conditions; the development of an adverse interest rate environment that adversely affects the interest rate spread or other income anticipated from the Company's operations and investments; depositor and borrower preferences; and unexpected increases in non-interest and other operational expenses. The Company disclaims any obligation to publicly announce future events or developments which may affect the forward-looking statements contained herein. GENERAL The Company's principal business is its investment in the Bank, which is a community-oriented financial institution providing a variety of financial services to the communities which it serves. The Bank's principal business consists of gathering savings deposits from the general public within its market area and investing those funds primarily in mortgage loans secured by one- to four-family owner occupied properties, mortgage-backed securities and obligations of the U.S. Government. To a lesser extent, the Bank makes multifamily residential loans, commercial real estate loans, land, construction and development loans, consumer loans and commercial lines of credit. The Bank's revenues are derived principally from interest on mortgage loans and interest and dividends on investments, mortgage-backed securities and, to a much lesser extent, short-term investments. The Bank also derives income from fees and service charges. The Bank's primary sources of funds are savings deposits and advances from the Federal Home Loan Bank of Chicago (the "FHLB"). The Bank does not have any subsidiaries. The selected financial ratios and other data of the Company set forth in the table on the next page are derived in part from, and should be read in conjunction with, the Unaudited Consolidated Financial Statements of the Company presented elsewhere in this report. 8

~~THREE~~FINANCIAL ~~MONTHS~~HIGHLIGHTS ~~ENDED~~(Dollars ~~NINE~~in ~~MONTHS~~thousands, ~~ENDED~~except ~~MARCH~~per 31share data) SEPTEMBER 30, ~~MARCH~~JUNE 3130, 2001 2001 -------------~~---------~~ ------------~~-----------~~ ~~2001~~SELECTED ~~2000~~FINANCIAL ~~2001~~CONDITION ~~2000~~DATA: ~~---------~~Total ~~----------~~assets ~~-----------~~.................................................... ~~----------~~$226,186 ~~Net~~$223,644 ~~income~~Loans receivable (net) .......................................... 176,718 170,188 Allowance for loan losses ....................................... ~~$275~~300 300 Mortgage-backed securities ...................................... 20,~~000~~231 ~~$119~~22,~~000~~408 $Savings ~~632~~deposits ................................................ 131,~~000~~350 $128,207 ~~409~~Borrowed funds .................................................. 61,000 ~~Other~~61,000 ~~comprehensive~~Stockholders' ~~income~~equity ~~(loss)~~............................................ 27,992 ~~net~~28,082 ofSELECTED ~~tax~~FINANCIAL RATIOS: ~~Unrealized~~Bank ~~holding~~Capital ~~gains~~ratios (~~losses~~1): ~~arising~~Tangible ~~during~~................................................... ~~the~~10.13% 10.14% Core ....................................................... 10.13 10.14 Risk-based ................................................. 21.33 21.48 Consolidated equity to assets at end of period ................. ~~405,000~~12.38 ~~(24,000)~~12.56 ~~1,328,000~~Non-performing ~~(552,000)~~assets ~~Less:~~as ~~reclassification~~a ~~adjustment~~percent of total assets ............. 0.09 0.05 Allowance for ~~net~~loan ~~gains~~losses ~~realized~~as ina ~~net~~percent ~~income~~of total loans .......... ~~(98,000)~~0.17 0.18 Allowance for loan losses as a percent of non--performing ~~(98~~loans.. 148.51 267.86 AT OR FOR THE THREE MONTHS ENDED SEPTEMBER 30,~~000)~~ --2001 2000 -------- -----~~---~~ ---------- --~~-------~~ ~~Comprehensive~~SELECTED OPERATING DATA: Net interest income before provision for loan losses $ 1,627 $ 1,483 Net income ......................................... 260 157 SELECTED FINANCIAL RATIOS: Return on average assets (~~loss~~2) ...................... 0.46 0.29 Return on average stockholders' equity (2) ........ 3.71 2.18 Noninterest expense to average assets (2) ......... 2.35 2.57 PER SHARE DATA: Basic earnings per share .......................... $~~582,000~~ 0.18 $ ~~95,000~~0.10 Diluted earnings per share ........................ 0.18 0.10 Book value per share .............................. 18.55 16.80 Cash dividends per share .......................... 0.06 0.05 STOCK QUOTES: High .............................................. $~~1,862,000~~ 15.73 $~~(143,000)~~ ~~========~~12.563 ~~========~~Low ~~==========~~............................................... ~~=========~~12.90 11.750 At September 30 ................................... 13.05 12.250

--------------------------------------------------------------- (1) Fairfield Savings Bank, FSB only. (2) Three month results have been annualized. 9 COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2001 AND JUNE 30, 2001 Total assets increased $2.6 million from $223.6 million at June 30, 2001 to $226.2 million at September 30, 2001. The components of the Company's asset base also changed from June 30, 2001 to September 30, 2001. Mortgage-backed securities ("MBS") (including both held-to-maturity and available-for-sale portfolios) decreased $2.2 million from $22.4 million at June 30, 2001 to $20.2 million at September 30, 2001. This decrease is primarily due to the receipt of $2.4 million principal repayments during the three month period. An increase of $6.5 million in loans receivable was the result of loan originations of $13.9 million which exceeded the $7.4 million of loan repayments. Interest earning deposits decreased $2.3 million from $9.2 million at June 30, 2001 to $6.9 million at September 30, 2001. Investment securities are recorded on the balance sheet at fair value and were $6.5 million and $6.4 million at September 30, 2001 and June 30, 2001, respectively. The allowance for loan losses at September 30, 2001 and June 30, 2001 was $300,000. Management believes that the allowance for loan losses is adequate to cover any probable losses in the loan portfolio. While management estimates loan losses using the best available information, no assurance can be made that future additions to the allowance will not be necessary. The ratio of the allowance for loan losses to total loans was 0.17% and 0.18% at September 30, 2001 and June 30, 2001, respectively. At September 30, 2001 and June 30, 2001, the ratio of the allowance for loan losses to non-performing loans was 148.15% and 267.86%, respectively. The Bank had two non-performing loans totaling approximately $202,000 at September 30, 2001 and one non-performing loan totaling approximately $112,000 at June 30, 2001. There were no loan chargeoffs during the three month periods ended September 30, 2001 and 2000. Savings deposits increased $3.1 million from June 30, 2001 to September 30, 2001; during this time, borrowed funds remained constant at $61.0 million. Interest and noninterest-bearing NOW accounts declined $1.1 million primarily due to a $1.3 million decrease in government entities deposits, whose balances fluctuate during the year. Passbook savings were $36.1 million at September 30, 2001 compared to $35.4 million at June 30, 2001. Certificates of deposit accounts increased $3.0 million to $69.2 million at September 30, 2001. Stockholders' equity decreased $90,000 to $28.0 million at September 30, 2001. This decline is due to the Company's repurchase of 38,500 treasury shares at a cost of approximately $597,000, and the payment of a $0.06 per share quarterly cash dividend in the quarter ended September 30, 2001 which was offset by $260,000 in net income. Accumulated other comprehensive income was $678,000 and $437,000 at September 30, 2001 and June 30, 2001 respectively, representing an increase in the market value of the securities held in the available-for-sale portfolio. 10 COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 GENERAL. For the three months ended September 30, 2001, net income was $260,000 or $0.18 per basic and diluted share, compared to net income of $157,000 or $0.10 per basic and diluted share for the three months ended September 30, 2000. INTEREST INCOME. Interest income was $3.7 million and $3.5 million for the three months ended September 30, 2001 and 2000, respectively. The average balance of interest-earning assets increased $10.9 million from $205.3 million for the three months ended September 30, 2000 to $216.2 million for the three months ended September 30, 2001. The average yield on the Bank's interest-earning assets decreased 13 basis points from 6.90% for the three months ended September 30, 2000 to 6.77% for the three months ended September 30, 2001. INTEREST EXPENSE. Interest expense decreased $29,000 to $2.0 million for the three months ended September 30, 2001, as compared to the same period in 2000. The average rate paid on interest-bearing liabilities decreased 33 basis points from 4.71% for the three months ended September 30, 2000 to 4.38% for the three months ended September 30, 2001. The average balance of interest-bearing liabilities increased $9.9 million to $184.0 million for the three months ended September 30, 2001 from $174.1 million for the three months ended September 30, 2000. The decrease in the cost of average interest-bearing liabilities resulted primarily from the renewal of maturing certificates of deposit and borrowed funds at lower rates. NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES. Net interest income before provision for loan losses was $1.6 million for the three months ended September 30, 2001 and $1.5 million for the three months ended September 30, 2000. The average interest rate spread increased 20 basis points from 2.19% for the three months ended September 30, 2000 to 2.39% for the comparable period in 2001. Net interest margin increased 13 basis points and was 3.04% for the three months ended September 30, 2001. PROVISION FOR LOAN LOSSES. There was no provision for loan losses for the three months ended September 30, 2001 or for the comparable period in 2000. NONINTEREST INCOME. Noninterest income was $84,000 for the three months ended September 30, 2001, compared to $88,000 for the three months ended September 30, 2000. NONINTEREST EXPENSE. Noninterest expense decreased $49,000 and was $1.3 million for the three months ended September 30, 2001. Compensation expense decreased $32,000 over the similar period last year primarily due to reduced staffing levels. Office occupancy expense was $295,000 for the three months ended September 30, 2001, compared to $258,000 for the same period in 2000. This increase was primarily due to building and land improvement repairs made in the first quarter of fiscal year 2002, while no similar expenditures occurred in the prior year. Professional services expense was $116,000 for the first quarter of 2002, a decrease of $62,000, primarily due to decreased legal fees. During the first quarter of fiscal year 2001, the Company incurred legal fees related to a suit to recover damages in a real estate development known as The 11 Trails of Olympia Fields, there was no corresponding expense in the first quarter of fiscal year 2002. Other noninterest expense was $174,000 for the three months ended September 30, 2001, compared to $166,000 for the comparable period in 2000. INCOME TAX EXPENSE. Income tax expense increased $86,000 from $37,000 for the three months ended September 30, 2000 to $123,000 for the three months ended September 30, 2001. This increase was partially due to the increase of $189,000 in pre-tax income. The effective tax rate was 32.1% and 19.0% for the three month periods ended September 30, 2001 and 2000, respectively. The increase in the effective tax rate was primarily due to the sale of certain available-for-sale securities during fiscal 2001. These securities had paid dividends, and the Company's dividend received deductions had lowered the effective rate in the prior year. LIQUIDITY AND CAPITAL RESOURCES The Bank's primary sources of funds are savings deposits, principal and interest payments on loans and mortgage-backed securities, and borrowings from the FHLB. While maturities and scheduled amortization of loans and mortgage-backed securities provide an indication of the timing of the receipt of funds, changes in interest rates, economic conditions and competition strongly influence mortgage prepayment rates and savings deposit flows, reducing the predictability of the timing of sources of funds. Net cash used in operating activities amounted to $82,000 during the quarter ended September 30, 2001 compared to $615,000 during the quarter ended September 30, 2000. Under Office of Thrift Supervision regulations, the Bank is required to maintain sufficient liquidity to ensure its safe and sound operation. At September 30, 2001, the Bank's liquidity ratio was 20.17%. The Bank's liquidity ratio is high due to the amount of mortgage-backed-securities held in the Bank's investment portfolio with a stated maturity of less than five years. The levels of the Bank's short-term liquid assets are dependent on the Bank's operating, financing and investing activities during any given period. The primary investing activities of the Bank during the three months ended September 30, 2001 were the origination of mortgage and other loans. See the "Consolidated Statements of Cash Flows" in the Unaudited Consolidated Financial Statements included in this Form 10-Q for the sources and uses of cash flows for operating activities and financing activities for the three months ended September 30, 2001 and 2000. At September 30, 2001, the Bank had outstanding loan origination commitments of $1.4 million and unused lines of consumer credit of $976,000. The Bank anticipates that it will have sufficient funds available to meet its current origination and other lending commitments. Certificates of deposit scheduled to mature in one year or less from September 30, 2001 totaled $34.3 million. Based upon the Bank's most recent pricing strategy, management believes that a significant portion of such deposits will remain with the Bank. Management believes it will have 12 adequate resources to fund all commitments on a short term and long term basis in accordance with its business strategy. At September 30, 2001, the Bank exceeded all of its regulatory capital requirements with a tangible capital level of $22.5 million, or 10.13% of total adjusted assets, which is above the required level of $3.3 million or 1.50%; core capital of $22.5 million, or 10.13% of total adjusted assets, which is above the required level of $6.7 million or 3.00%; and total risk-based capital of $22.8 million, or 21.33% of risk-weighted assets, which is above the required level of $8.5 million, or 8.00%. IMPACT OF NEW ACCOUNTING STANDARDS In July 2001, the Financing Accounting Standards Board's (the "FASB") issued SFAS No. 141, "Business Combinations" (SFAS No. 141) and SFAS No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142). SFAS No. 141 requires that all business combinations initiated after June 30, 2001 be accounted for under the purchase method and addresses the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination. SFAS No. 142 addresses the initial recognition and measurement of intangible assets acquired outside of a business combination and the accounting for goodwill and other intangible assets subsequent to their acquisition. SFAS No. 142 provides that intangible assets with finite useful lives be amortized and that goodwill and intangible assets with indefinite lives will not be amortized, but will rather be tested at least annually for impairment. SFAS No. 142 is effective January 1, 2002 for calendar year companies; however, any acquired goodwill or intangible assets recorded in transactions closed subsequent to June 30, 2001 will be subject immediately to the nonamortization and amortization provisions of SFAS No. 142. The Company anticipates that the adoption of SFAS No. 141 and No. 142 will not have a material impact on the Company's results of operations or financial condition. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. There has been no material change in market risk since that disclosed in Item 7A of the Company's Form 10-K for the year ended June 30, 2001. PART II OTHER INFORMATION ITEM 1. Legal Proceedings None ITEM 2. Changes in Securities and Use of Proceeds None 13 ITEM 3. Defaults Upon Senior Securities None ITEM 4. Submission of Matters to a Vote of Security Holders The Company held its Annual Meeting of Shareholders ("Meeting") on October 16, 2001. On August 31, 2001, the record date, there were 1,509,168 shares of common stock issued and outstanding. The proposals submitted to the shareholders and the tabulation of votes for each proposal are as follows: 1. Election of two candidates to the Board of Directors to serve for a term of three years and one candidate to serve for a term of one year. The number of votes cast with respect to this matter was as follows: NOMINEE FOR WITHHELD BROKER NON-VOTES ------- --------- -------- ---------------- Eugene W. Pilawski 1,244,198 95,979 - Walter E. Powers, M.D. 1,243,898 96,279 - Timothy L. McCue 1,244,198 95,979 - 2. Ratification of the appointment of KPMG LLP as independent public accountants for the fiscal year ending June 30, 2002. The number of votes cast with respect to this matter was as follows: FOR AGAINST ABSTAIN BROKER NON-VOTES --- ------- ------- ---------------- 1,332,575 5,831 1,775 - ITEM 5. Other Information None ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K - None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BIG FOOT FINANCIAL CORP. (Registrant) By: /s/Michael J. Cahill ------------------------------- Michael J. Cahill Senior Vice President and Chief Financial Officer November 13, 2001

FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data) (Unaudited) MARCH 31, JUNE 30, 2001 2000 ---------- ---------- SELECTED FINANCIAL CONDITION DATA: Total assets ...................................................... $217,803 $215,674 Loans receivable (net) ............................................ 162,759 155,187 Allowance for loan losses ......................................... 300 300 Mortgage-backed securities ........................................ 24,317 37,363 Savings deposits .................................................. 125,726 115,494 Borrowed funds .................................................... 57,000 66,000 Stockholders' equity .............................................. 29,976 28,612 SELECTED FINANCIAL RATIOS: Bank Capital ratios (1): Tangible ..................................................... 10.43% 10.28% Core ......................................................... 10.43 10.28 Risk-based ................................................... 22.78 22.93 Consolidated equity to assets .................................... 13.76 13.27 Non-performing assets as a percent of total assets ............... 0.05 0.15 Allowance for loan losses as a percent of total loans ............ 0.18 0.19 Allowance for loan losses as a percent of non-performing loans ... 267.86 120.48

FOR THE FOR THE THREE MONTHS ENDED NINE MONTHS ENDED MARCH 31, MARCH 31, 2001 2000 2001 2000 -------- -------- -------- -------- SELECTED OPERATING DATA: Net interest income before provision for loan losses $ 1,488 $ 1,559 $ 4,450 $ 4,704 Net income ......................................... 275 119 632 409 SELECTED FINANCIAL RATIOS: Return on average assets (2) ...................... 0.50 0.23 0.39 0.26 Return on average stockholders' equity (2) ........ 3.70 1.53 2.88 1.65 Noninterest expense to average assets (2) ......... 2.45 2.74 2.47 2.70 PER SHARE DATA: Basic earnings per share .......................... $ 0.17 $ 0.06 $ 0.39 $ 0.20 Diluted earnings per share ........................ 0.17 0.06 0.39 0.20 Book value per share at end of period ............. 17.58 15.79 17.58 15.79 Cash dividends per share .......................... 0.05 0.05 0.15 0.15 STOCK QUOTES: High .............................................. $14.500 $13.000 $14.500 $15.063 Low ............................................... 12.000 10.250 10.125 10.250 At March 31 ....................................... 14.500 11.438 14.500 11.438 ------------------------------------------------------------

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