10-Q 1 form10q.txt FORM 10-Q 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, 2002 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 OCTOBER 14, 2002 ----- ---------------- Common Stock, Par Value $.01 1,509,168 TABLE OF CONTENTS PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS OF BIG FOOT FINANCIAL CORP. Consolidated Statements of Financial Condition (Unaudited) September 30, 2002 and June 30, 2002........................... Page 3 Consolidated Statements of Earnings (Unaudited) - Three months ended September 30, 2002 and 2001.............................. Page 4 Consolidated Statements of Cash Flows (Unaudited) - Three months ended September 30, 2002 and 2001....................... Page 5 Notes to Unaudited Consolidated Financial Statements........... Page 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................................... Page 8 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..... Page 13 ITEM 4. CONTROLS AND PROCEDURES........................................ Page 13 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS.............................................. Page 14 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS...................... Page 14 ITEM 3. DEFAULTS UPON SENIOR SECURITIES................................ Page 14 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............ Page 14 ITEM 5. OTHER INFORMATION.............................................. Page 14 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................... Page 14 SIGNATURES 2 BIG FOOT FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (In thousands, except share data)

~~ITEM~~SEPTEMBER 130, JUNE 30 2002 2002 ------------- ------------- ASSETS Cash and due from banks ........................................................ ~~FINANCIAL~~$ ~~STATEMENTS~~2,422 OF$ ~~BIG~~3,157 ~~FOOT~~Interest-earning ~~FINANCIAL~~deposits ~~CORP~~...................................................... ~~Consolidated~~8,463 ~~Statements~~9,802 ofMortgage-backed ~~Financial~~securities ~~Condition~~held-to-maturity, at amortized cost (~~Unaudited)~~fair ~~December~~value 31of $4,127 ~~2001~~at September 30, 2002 and $4,741 at June 30, ~~2001~~2002) ..... 3,970 4,590 Mortgage-backed securities available-for-sale, at fair value ................... 7,222 18,388 Investment securities available-for-sale, at fair value ........................ ~~Page~~5,359 35,506 ~~Consolidated~~Investment ~~Statements~~securities ofheld-to-maturity, ~~Earnings~~at ~~(Unaudited)~~cost -................................ ~~Three~~3,000 ~~and~~3,000 ~~Six~~Loans ~~months~~receivable, ~~ended~~net ~~December~~.......................................................... 31169,171 ~~2001~~173,741 ~~and~~Accrued ~~2000~~interest receivable .................................................... ~~Page~~1,124 41,179 ~~Consolidated~~Stock ~~Statements~~in Federal Home Loan Bank of ~~Cash~~Chicago, ~~Flows~~at ~~(Unaudited)~~cost -............................ ~~Six~~3,969 ~~months~~3,920 ~~ended~~Office ~~December~~properties 31and equipment, ~~2001~~net ........................................... 3,759 3,842 Prepaid expenses and ~~2000~~other assets .............................................. 254 257 ------------- ------------- Total assets.................................................................... ~~Page~~$208,713 5$227,382 ~~Notes~~============= to============= ~~Unaudited~~LIABILITIES ~~Consolidated~~Noninterest-bearing ~~Financial~~NOW ~~Statements~~accounts ............................................... ~~Page~~$ 6,840 ~~ITEM~~$ 2.7,048 ~~MANAGEMENT'S~~Interest-bearing ~~DISCUSSION~~NOW ~~AND~~accounts ~~ANALYSIS~~.................................................. OF8,229 ~~FINANCIAL~~9,841 ~~CONDITION~~Money ~~AND~~market ~~RESULTS~~demand OFaccounts ~~OPERATIONS~~...................................................~~...~~ ~~Page~~12,610 810,760 ~~ITEM~~Passbook 3accounts .............................................................. ~~QUANTITATIVE~~41,776 ~~AND~~41,923 ~~QUALITATIVE~~Certificates ~~DISCLOSURES~~of ~~ABOUT~~deposit ~~MARKET RISK~~........................................................ ~~Page~~62,270 1462,510 ~~PART~~------------- II ------------- ~~OTHER~~Total ~~INFORMATION~~savings ~~ITEM~~deposits 1......................................................... ~~LEGAL~~131,725 ~~PROCEEDINGS~~132,082 Borrowed money ................................................................. ~~Page~~42,000 1461,000 ~~ITEM~~Advance 2.payments ~~CHANGES~~by INborrowers ~~SECURITIES~~for ~~AND~~taxes ~~USE~~and OFinsurance ~~PROCEEDS~~.......................... 2,245 1,982 Accrued interest payable and other liabilities ................................. ~~Page~~3,272 ~~14 ITEM~~ 3.,085 ~~DEFAULTS~~------------- ~~UPON~~------------- ~~SENIOR~~Total ~~SECURITIES~~liabilities.............................................................. ~~Page~~179,242 14198,149 ~~ITEM~~------------- 4------------- STOCKHOLDERS' EQUITY Preferred stock, $.01 ~~SUBMISSION~~par OFvalue, ~~MATTERS~~2,000,000 TOshares Aauthorized; ~~VOTE~~none OFissued ~~SECURITY~~...... ~~HOLDERS~~-- -- Common stock, $.01 par value, 8,000,000 shares authorized; 2,512,750 issued .... 25 25 Treasury stock, at cost (1,003,582 shares at September 30, 2002 and June 30, 2002) .......................................................................... ~~Page~~(13,178) 14(13,178) ~~ITEM~~Additional 5paid-in capital ..................................................... ~~OTHER~~24,558 ~~INFORMATION~~24,512 Retained earnings-substantially restricted ..................................... 18,508 18,270 Common stock acquired by Employee Stock Ownership Plan ......................... ~~Page~~(905) 15(905) ~~ITEM~~Common 6stock acquired by Recognition and Retention Plan......................... ~~EXHIBITS~~(230) ~~AND~~(334) ~~REPORTS~~Accumulated ONother ~~FORM~~comprehensive 8income, net of tax ............................. 693 843 -K------------ ------------- Total stockholders' equity ..................................................... ~~Page~~29,471 1529,233 ~~SIGNATURES~~------------- ------------- Total liabilities and stockholders' equity ..................................... $208,713 $227,382 ============= =============

(SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS) 3 BIG FOOT FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands, except per share data)

~~DECEMBER~~FOR ~~31,~~THE ~~JUNE~~THREE MONTHS ENDED SEPTEMBER 30, ~~2001~~------------------------ 2002 2001 ---------- -- -------- ~~ASSETS~~INTEREST ~~Cash~~AND ~~and~~DIVIDEND ~~due~~INCOME ~~from~~Mortgage-backed ~~banks~~securities held-to-maturity ................................ $ 64 $ 120 Mortgage-backed securities available-for-sale .............................. $196 ~~2,862~~202 $Investment ~~2,641~~securities ~~Interest-earning deposits~~ ...................................................... ~~16,931~~129 ~~9,170~~156 ~~Mortgage-backed~~Loans ~~securities~~receivable ~~held-to-maturity, at amortized cost (fair value of $6,339 at December 31, 2001 and $8,111 at June 30, 2001)~~ ...... ~~6,249 8,080 Mortgage-backed securities available-for-sale, at fair value~~ ................... ~~10,481 14,328 Investment securities available-for-sale, at fair value~~ .................................. 62,~~186~~912 63,~~442~~070 ~~Investment securities held~~Interest-~~to-maturity,~~earning atdeposits ~~cost~~ ................................ ~~3,000 3,000 Loans receivable, net~~ .................. 44 53 Federal Home Loan Bank of Chicago stock ....................................~~....~~ ~~172,755~~50 ~~170,188~~58 ~~Accrued~~---------- ---------- Total interest ~~receivable~~and dividend income .........................................~~...........~~ 13,~~054~~395 13,~~009~~659 ~~Stock~~---------- in---------- ~~Federal~~INTEREST ~~Home~~EXPENSE ~~Loan~~Savings ~~Bank~~deposits ~~of Chicago, at cost~~ ............................ ~~3,817 3,699 Office properties and equipment, net~~ ............................... 864 1,222 Borrowed money ............ ~~4,054 4,215 Prepaid expenses and other assets~~ ................................................. ~~292~~696 ~~872~~810 ---------- ---------- Total ~~assets~~interest expense ..................................................... 1,560 2,032 ---------- ---------- Net interest income before provision for loan losses ....................... ~~$ 227~~1,~~681~~835 ~~$ 223~~1,~~644~~627 ~~=========~~Provision ~~=========~~for ~~LIABILITIES~~loan ~~Noninterest-bearing~~losses ~~NOW accounts~~ .................................................. $-- ~~7,297~~-- $---------- ~~6,918 Interest~~-~~bearing~~--------- ~~NOW~~Net ~~accounts~~interest income after provision for loan losses ........................ 1,835 1,627 ---------- ---------- NONINTEREST INCOME Service fees .......................... ~~9,578 10,272 Money market demand accounts~~ ..................................... 83 74 Gain on sale of securities available-for-sale .............................. ~~10,944~~197 ~~9,460~~-- ~~Passbook~~Other ~~accounts~~ ...................................................................... ~~35,806~~11 ~~35,396~~10 ~~Certificates~~---------- of---------- ~~deposit~~Total noninterest income ...................................................~~.....~~ ~~69,195~~291 ~~66,161~~84 ---------- ---------- ~~Total~~NONINTEREST ~~savings~~EXPENSE ~~deposits~~Compensation and benefits .................................................. 894 737 Office occupancy ....... ~~132,820 128,207 Borrowed money~~ .................................................... 277 295 Federal deposit insurance premiums ............. ~~61,000 61,000 Advance payments by borrowers for taxes and insurance~~ ............................ ~~2,049~~6 ~~2,240~~6 ~~Accrued~~Professional ~~interest~~services ~~payable and other liabilities~~ ...................................................... ~~3,679~~251 ~~4,115~~116 ~~---------~~Other ~~--------- Total liabilities~~ ...................................................................... ~~199,548~~186 ~~195,562~~174 ---------- --------- ~~STOCKHOLDERS' EQUITY Preferred stock, $.01 par value, 2,000,000 shares authorized; none issued ......~~ -- --Total ~~Common~~noninterest ~~stock,~~expense $.~~01 par value, 8,000,000 shares authorized; 2,512,750 issued~~ .... ~~25 25 Treasury stock, at cost (1,003,582 shares at December 31, 2001 and 965,082 shares at June 30, 2001)~~ .............................................~~.....~~ ~~(13~~1,~~179)~~614 ~~(12~~1,~~582)~~328 ~~Additional~~---------- ~~paid~~-in--------- ~~capital~~Income before income taxes .................................................~~....~~ ~~24,488~~512 ~~24,437~~383 ~~Retained~~Income ~~earnings-substantially~~tax ~~restricted~~expense ..................................... ~~17,881 17,580 Common stock acquired by Employee Stock Ownership Plan~~ ....................~~.....~~ ~~(1,106)~~189 ~~(1,106)~~123 ~~Common~~---------- ~~stock~~---------- ~~acquired~~NET byINCOME ~~Recognition and Retention Plan~~ ........................ ~~(550) (709) Accumulated other comprehensive income~~ ......................................... ~~574~~$ ~~437~~323 $ 260 ========== ========== --------- ----------------------------------------------------------------------------------------------- ~~Total~~Earnings ~~stockholders'~~per ~~equity~~share: Basic ...................................................................... ~~28,133~~$ ~~28,082~~0.23 ~~---------~~$ ~~---------~~0.18 ~~Total~~Diluted ~~liabilities and stockholders' equity~~ .................................................................... $0.22 ~~227,681 $ 223,644 ========= =========~~0.18

(SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS) 4 BIG FOOT FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)

FOR THE THREE MONTHS ~~FOR THE SIX MONTHS~~ ENDED ~~ENDED~~SEPTEMBER ~~DECEMBER 31~~30, ~~DECEMBER 31,~~ -------------------- --------~~----------~~ ~~2001~~CASH ~~2000~~FLOWS ~~2001~~FROM ~~2000~~OPERATING ACTIVITIES: 2002 2001 ------ ------ ------ ------ ~~INTEREST INCOME Mortgage~~-~~backed~~ ~~securities~~Net ~~held-to-maturity~~income ....................... ~~$ 105 $ 154 $ 225 $ 344 Mortgage-backed securities available-for-sale~~ ..................... ~~170 287 372 591 Investment securities~~ ......................... $ 323 $ 260 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization.................... ~~149 145 305 281 Loans receivable~~ ............................... 100 106 Market adjustment for committed Employee Stock Ownership Plan shares ........... 46 24 Amortization of award of Recognition and Retention Plan shares ........ ~~3,066 2,899 6,136 5,709 Interest-earning deposits~~ ......... 104 66 Gain on sale of securities available-for-sale .................................. 51(197) 78-- ~~104 117~~ Federal Home Loan Bank of Chicago stock dividends .............................. 55(49) 72(60) ~~113~~Net ~~137~~amortization ~~-------~~of ~~-------~~deferred ~~-------~~loan ~~-------~~fees ~~Total interest income~~ .........................................~~....~~ ~~3,596~~(30) ~~3,635~~(15) ~~7,255~~Net ~~7,179~~amortization ~~-------~~of ~~-------~~discounts ~~-------~~and ~~-------~~premiums ~~INTEREST EXPENSE Savings deposits~~ ..................................... 20 27 (Increase) decrease in accrued interest receivable ............. ~~1,146 1,094 2,368 2,120 Borrowed money~~ ................ 55 (148) Decrease in prepaid expenses and other assets .................................... ~~744~~3 ~~1,062~~558 ~~1,554~~Increase 2(decrease) in accrued interest payable and other liabilities,~~097~~ net ..... 271 (900) ------- ------- ------- ------- ~~Total~~Net ~~interest~~cash ~~expense~~provided by (used in) operating activities.............................~~...............~~ ~~1,890~~646 ~~2,156~~(82) ~~3,922 4,217~~ ------- ------- ------- --------------------------------------------------------------------------------------------------- ~~Net~~CASH ~~interest~~FLOWS ~~income~~FROM ~~before~~INVESTING ~~provision~~ACTIVITIES: ~~for~~Origination ~~loan~~of ~~losses~~loans receivable ................................................ 1(6,~~706~~536) 1(13,~~479~~950) ~~3,333~~Principal ~~2,962~~repayment ~~Provision~~of ~~for~~loans ~~loan~~receivable ~~losses~~ ......................................... --11,136 --7,435 --Principal --repayments ~~-------~~on mortgage-~~------~~backed ~~-------~~securities held-to-~~-----~~maturity ~~Net~~............ ~~interest~~610 ~~income~~885 ~~after~~Principal ~~provision~~repayments ~~for~~on ~~loan~~mortgage-backed ~~losses~~securities available-for-sale ..........~~.....~~ 1,~~706~~318 1,~~479~~531 ~~3,333~~Proceeds ~~2,962~~from ~~-------~~sale ~~-------~~of mortgage-~~------~~backed securities available-for-~~-----~~sale ~~NONINTEREST INCOME Service fees~~ ............ 9,927 -- Purchase of investment securities available-for-sale ...........................~~...............~~ 93(250) 67-- ~~167~~Proceeds ~~132~~from ~~Loss on~~ sale of investment securities available-for-sale ................. ~~(48)~~271 -- ~~(48)~~Purchase --of ~~Other~~office properties and equipment, net ...............................~~..............................~~ 11(17) 10(37) ~~21 33~~ ------- ------- ------- ------- ~~Total~~Net ~~noninterest~~cash ~~income~~provided by (used in) investing activities ............................~~..............~~ 5616,459 77(4,136) ~~140 165~~ ------- ------- ------- --------------------------------------------------------------------------------------------------- ~~NONINTEREST~~CASH ~~EXPENSE~~FLOWS ~~Compensation~~FROM ~~and~~FINANCING ~~benefits~~ACTIVITIES: Net increase (decrease) in savings deposits ....................................~~.....~~ ~~731~~(357) ~~679 1~~3,~~468~~143 ~~1,448~~Repayments ~~Office~~of ~~occupancy~~borrowed money ................................................... ~~264~~(19,000) ~~256~~-- ~~559~~Increase ~~514~~in ~~Federal~~advance ~~deposit~~payments ~~insurance~~by ~~premiums~~borrowers for taxes and insurance .............. 263 271 Payment of cash dividend .................. ~~6 6 12 12 Professional services~~ .....................................~~........~~ ~~235~~(85) ~~129~~(84) ~~351~~Purchase ~~307~~of ~~Other~~treasury stock .....................................................~~........~~ ~~221~~-- ~~211~~(597) ~~395~~------------ ~~377~~------------- ~~=======~~Net ~~=======~~cash ~~=======~~provided ~~=======~~by ~~Total~~(used ~~noninterest~~in) ~~expense~~financing activities.............................~~............~~ 1(19,~~457~~179) ~~1,281~~ 2,~~785~~733 ~~2,658~~ ------- ------- ------- --------------------------------------------------------------------------------------------------- ~~Income~~Net ~~before~~decrease ~~income~~in ~~taxes~~cash and cash equivalents........................................ ~~305~~(2,074) ~~275~~(1,485) ~~688~~Cash ~~469~~and ~~Income~~cash ~~tax~~equivalents ~~expense~~at the beginning of the period .......................~~.........................~~ 9612,959 7511,811 ~~219 112~~ ------- ------- ------- ------- ~~NET~~CASH ~~INCOME~~AND $CASH ~~209~~EQUIVALENTS $AT ~~200~~THE $END ~~469~~OF $THE ~~357~~PERIOD ~~=======~~............................. ~~=======~~$ ~~=======~~10,885 ~~=======~~$ 10,326 ------------------------------------------------------------------------------------------------------------------------- ~~Earnings~~SUPPLEMENTAL ~~per~~DISCLOSURE ~~share~~OF CASH FLOW INFORMATION: ~~Basic~~Cash paid during the period for: Interest ........................................................... $ ~~0.15~~1,597 $ ~~0.12~~2,216 $Income ~~0.33~~taxes ~~$ 0~~.~~22 Diluted~~ ........................................................ ~~0.15~~100 ~~0.12 0.33 0.22~~--

(SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS) 5 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, 2002 and June 30, 2002 and for the three month periods ended September 30, 2002 and 2001. 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, 2002, and the notes thereto included in the Company's 2002 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: 6

~~FOR~~THREE ~~THE SIX~~ MONTHS ENDED ~~DECEMBER~~SEPTEMBER 3130, ------------------------- ~~CASH FLOWS FROM OPERATING ACTIVITIES: 2001 2000~~ -------- ~~--------~~2002 ~~Net~~2001 income ....................................................................................... $ 469 $ 357 Adjustments to reconcile net income to net cash provided by in operating activities: Depreciation and amortization .................................................................... 211 228 Market adjustment for committed Employee Stock Ownership Plan shares ............................. 51 17 Amortization of award of Recognition and Retention Plan shares ................................... 159 120 Loss on sale of investment securities available-~~for~~-~~sale ......................................... 48~~ -- Federal Home Loan Bank of Chicago stock dividends ................................................ (118) (120) Net amortization of deferred loan fees ........................................................... (58) (20) Net amortization of discounts and premiums ....................................................... 50 86 (Increase) decrease in accrued interest receivable ............................................... (45) 1 Decrease in prepaid expenses and other assets .................................................... 580 97 Decrease in accrued interest payable and other liabilities, net .................................. (493) (466) -------- --~~------~~ ~~Net cash provided by operating activities ........................................................ 854 300~~ ------------~~-----------------------------------------------------------------------------------------------------------------------~~ ~~CASH FLOWS FROM INVESTING ACTIVITIES~~BASIC: ~~Origination~~Net ~~of loans receivable~~ income..........................................................~~........~~ ~~(19,225)~~$ ~~(15~~323,~~065)~~000 ~~Principal~~$ ~~repayment~~260,000 ofWeighted ~~loans~~average ~~receivable~~shares outstanding.................................~~.........................~~ 161,~~716 6~~421,~~899~~270 ~~Principal repayments on mortgage-backed securities held-to-maturity ..............................~~ 1,~~805 8~~416,~~650 Principal repayments on mortgage-backed securities available-for-sale ............................ 3,905 2,~~233 ~~Purchase~~Basic ofearnings ~~investment~~per ~~securities available-for-sale~~ share............................................. --$ ~~(252) Proceeds from sale of investment securities available-for-sale~~ 0.~~..................................~~23 ~~320~~$ ~~-- Purchase of stock in Federal Home Loan Bank of Chicago~~ 0.~~..........................................~~18 --DILUTED: ~~(145)~~Net ~~Proceeds from sale of foreclosed real estate~~ income..................................................... ~~-- 78 Purchase of office properties and equipment~~ .....~~.................................................~~ ~~(50)~~$ ~~(116)~~323,000 ~~--------~~$ ~~-------- Net cash provided by investing activities ........................................................ 3~~260,~~471~~000 ~~2,282~~Weighted ~~-----------------------------------------------------------------------------------------------------------------------------------~~average ~~CASH~~shares ~~FLOWS FROM FINANCING ACTIVITIES: Net increase in savings deposits~~ outstanding.................................~~................................~~ 41,~~613 7~~421,~~168~~270 ~~Net decrease in borrowed money ................................................................... -- (~~1,~~000)~~416,233 ~~Increase~~Effect ~~(decrease) in advance payments by borrowers for taxes and insurance ..................... (191) 108 Payment~~ of ~~cash~~dilutive ~~dividend ......................................................................... (168) (160) Purchase of treasury~~ stock ~~.......................................................................~~options ~~(597) (300) -------- -------- Net cash provided by financing activities~~ outstanding........................~~................................~~ 355,~~657~~310 51,~~816~~247 ~~-----------------------------------------------------------------------------------------------------------------------------------~~Diluted ~~Net~~weighted ~~increase~~average inshares ~~cash and cash equivalents~~ outstanding.........................~~...............................~~ 71,~~982 8~~476,~~398~~580 ~~Cash and cash equivalents at the beginning of the period ......................................... 11~~1,~~811 6~~417,~~334~~480 ~~--------~~Diluted ~~--------~~earnings ~~CASH~~per ~~AND CASH EQUIVALENTS AT THE END OF THE PERIOD~~ share..........................................~~.....~~ $ 19,793 $ 14,732 ----------------------------------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest 0.~~............................................................................~~22 $ ~~4,024 $ 4,129 Income taxes~~ 0.~~........................................................................ 205 65~~18

(3) COMPREHENSIVE INCOME The Company's comprehensive income for the three month periods ended September 30, 2002 and 2001 is as follows:

THREE MONTHS ENDED ~~SIX~~SEPTEMBER ~~MONTHS ENDED DECEMBER 31~~30, ~~DECEMBER 31,~~ ---------------------------- -----~~-----------------------~~ ~~2001~~2002 ~~2000~~ 2001 ~~2000~~ ---------- ----~~------~~ ---------- --~~--------~~ ~~BASIC:~~ Net income ............................................ ~~$ 209,000 $ 200,000 $ 469,000 $ 357,000 Weighted average shares outstanding~~ ................... ~~1,406,235~~$ 1323,~~601,720~~000 ~~1,411,234~~$ 1260,~~604,840~~000 ~~Basic~~Other ~~earnings~~comprehensive ~~per~~income, ~~share~~net ~~..............................~~of ~~0.15~~tax: ~~0.12~~Unrealized ~~0.33~~holding ~~0.22~~gains ~~DILUTED:~~(losses) ~~Net~~arising ~~income~~during the period ..........~~..................................~~ ~~$ 209~~(20,000) ~~$ 200~~241,000 $Reclassification ~~469,000~~adjustment $for ~~357,000~~net ~~Weighted~~gains ~~average~~realized ~~shares~~in ~~outstanding~~net income .....~~..............~~ 1(130,~~406,235~~000) ~~1,601,720~~-- ~~1,411,234~~--------------------------------- ~~1,604,840~~Comprehensive ~~Effect~~income ~~of dilutive stock options outstanding~~ .......... ~~1,503 -- 1,377 -- Diluted weighted average shares outstanding~~ ........... ~~1,407,738 1,601,720 1,412,611 1,604,840 Diluted earnings per share~~ ............................ 0.~~15 0~~.~~12 0~~.33 ~~0.22~~$ 173,000 $501,000 =================================

(4) DIVIDEND DECLARATION On August 20, 2002, the Board of Directors declared a quarterly dividend of $.06 per share, which was paid on September 13, 2002 to stockholders of record on August 30, 2002. (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, 2002, 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. 7 (6) OTHER EVENTS On July 22, 2002, the Company announced that it had entered into a definitive agreement with Midwest Banc Holdings, Inc. (Midwest). The agreement calls for Midwest to acquire Big Foot Financial Corp. in a stock merger transaction. The proposed merger is subject to regulatory approval and the approval of the Company's shareholders. The closing of this transaction is scheduled for the first quarter of the 2003 calendar year. 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 FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data)

~~THREE~~SEPTEMBER ~~MONTHS~~30, ~~ENDED~~JUNE ~~SIX MONTHS ENDED DECEMBER 31~~30, ~~DECEMBER~~2002 ~~31,~~2002 ---------------~~-----------------------------------------~~ ~~2001 2000 2001 2000~~ ---------- ~~----------~~SELECTED ~~----------~~FINANCIAL ~~----------~~CONDITION ~~Net~~DATA: ~~income~~Total assets .........................................................~~...~~ $ ~~209~~208,~~000~~713 $ ~~200~~227,~~000~~382 $Loans ~~469,000~~receivable $(net) ~~357~~............................................... 169,~~000~~171 ~~Other~~173,741 ~~comprehensive~~Allowance ~~income~~for ~~(loss),~~loan ~~net~~losses of............................................ ~~tax:~~300 ~~Unrealized~~300 ~~holding~~Mortgage-backed ~~gains~~securities ~~(losses)~~........................................... ~~arising~~11,192 ~~during~~22,978 ~~the~~Savings ~~period~~deposits ..................................................... ~~(136~~131,~~000)~~725 ~~455~~132,~~000~~082 ~~105~~Borrowed money ....................................................... 42,000 ~~923~~61,000 ~~Less~~Stockholders' equity ................................................. 29,471 29,233 SELECTED FINANCIAL RATIOS: ~~reclassification~~Bank ~~adjustment~~Capital ~~for~~ratios ~~net~~(1): ~~loss~~Tangible. ~~realized~~........................................................ in11.86% ~~net~~10.66% ~~income~~Core ............................................................. ~~32,000~~11.86 10.66 Risk--based ~~32,000~~....................................................... --24.33 ~~----------~~22.83 ~~----------~~Consolidated ~~----------~~equity ~~----------~~to ~~Comprehensive~~assets ~~income~~at end of period ....................... 14.12 12.86 Non-performing assets as a percent of total assets ................... 0.14 -- Allowance for loan losses as a percent of total loans ................ $0.18 ~~105,000~~0.17 $Allowance ~~655,000~~for $loan ~~606,000~~losses ~~$1,280,000~~as ~~==========~~a ~~==========~~percent ~~==========~~of ~~==========~~non-performing loans ....... 106.38 --

~~DECEMBER~~AT ~~31,~~OR ~~JUNE~~FOR THE THREE MONTHS ENDED SEPTEMBER 30, ~~2001~~----------------------------------- 2002 2001 --------------- ---------- SELECTED ~~FINANCIAL~~OPERATING ~~CONDITION~~ DATA: ~~Total~~Net ~~assets~~interest income before provision for loan losses ................. $ 1,835 $ 1,627 Net income........................................ ~~$227,681 $223,644 Loans receivable (net)~~ .................... 323 260 SELECTED FINANCIAL RATIOS: Return on average assets (2) ........................... ~~172,755 170,188 Allowance for loan losses~~ .............. 0.58 0.46 Return on average stockholders' equity (2) ........................... 4.40 ~~300~~3.71 ~~300~~Noninterest ~~Mortgage-backed~~expense ~~securities~~to average assets (2) ............................ 2.88 2.~~.............~~35 ~~16,730~~PER ~~22,408~~SHARE ~~Savings~~DATA: ~~deposits~~Basic earnings per share ............................................. $ 0.23 $ 0.~~......~~18 ~~132,820~~Diluted ~~128,207~~earnings ~~Borrowed~~per ~~funds~~share ........................................... 0.22 0.~~..........~~18 ~~61,000~~Book ~~61,000~~value ~~Stockholders'~~per ~~equity~~share ................................................. ~~28,133~~19.53 ~~28,082~~18.55 ~~SELECTED~~Cash ~~FINANCIAL~~dividends ~~RATIOS:~~per ~~Bank~~share ~~Capital ratios (1): Tangible~~ ............................................. 0.06 0.06 STOCK QUOTES: High ......... 10.~~10 % 10~~.~~14 % Core~~ ...................................................... $ 20.75 $ 15.73 Low .... 10.~~10 10~~.~~14 Risk-based~~ ............................................................ 2116.6100 2112.4890 ~~Consolidated~~At ~~equity~~September to30 ~~assets at end of period~~ ...................... 12.~~36 12~~.~~56 Non-performing assets as a percent of total assets~~ .................. 0.~~11 0~~.~~05 Allowance for loan losses as a percent of total loans~~ ..........~~.....~~ 020.1770 013.1805 ~~Allowance~~--------------------------------------------------- ~~for~~(1) ~~loan~~Fairfield ~~losses~~Savings asBank, aFSB ~~percent~~only. of(2) ~~non-performing~~Three ~~loans~~month ~~......~~results ~~118.58~~have ~~267~~been annualized.86

9 COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2002 AND JUNE 30, 2002 Total assets decreased $18.7 million from $227.4 million at June 30, 2002 to $208.7 million at September 30, 2002. The components of the Company's asset base also changed from June 30, 2002 to September 30, 2002. Mortgage-backed securities ("MBS") (including both held-to-maturity and available-for-sale portfolios) decreased $11.8 million from $23.0 million at June 30, 2002 to $11.2 million at September 30, 2002. This decrease is primarily, due to the sale of $9.8 million in mortgage-backed securities available-for-sale and principal repayments during the quarter. A decrease of $4.6 million in loans receivable was the result of loan originations of $6.5 million which was offset by $11.0 million of loan repayments and amortizations. Interest earning deposits decreased $1.3 million from $9.8 million at June 30, 2002 to $8.5 million at September 30, 2002. Investment securities were $8.6 million and $8.5 million at September 30, 2002 and June 30, 2002, respectively. The allowance for loan losses at September 30, 2002 and June 30, 2002 was $300,000. Management believes that the allowance for loan losses is adequate to cover any known losses, and losses inherent in the loan portfolio. It is the policy of the Company to provide specific valuation allowances for estimated losses on loans when any permanent decline in value is identified. Periodic reviews are made to identify potential problem loans. In addition to specific allowances, the Company maintains a general allowance for loan losses. Additions to the allowance for loan losses are charged to operations. Also, various regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments using information available to them at the time of their examination. In the opinion of management, the allowance for loan losses, when taken as a whole, is adequate to absorb probable losses in the loan portfolio. The ratio of the allowance for loan losses to total loans was 0.18% and 0.17% at September 30, 2002 and June 30, 2002, respectively. At September 30, 2002 the ratio of the allowance for loan losses to non-performing loans was 106.38%. The Bank had three non-performing loans totaling approximately $282,000 at September 30, 2002 and no performing loans at June 30, 2002. There were no loan chargeoffs during the three month periods ended September 30, 2002 and 2001. Savings deposits decreased $357,000 from June 30, 2002 to September 30, 2002. Interest and noninterest-bearing NOW accounts declined $1.8 million primarily due to a $1.0 million decrease in government entities deposits, whose balances fluctuate during the year. Passbook savings were $41.8 million at September 30, 2002 compared to $41.9 million at June 30, 2002. Borrowed money was $42.0 million at September 30, 2002 compared to $61.0 million at June 30, 2002, a decrease of $19.0 million. During the quarter, excess liquidity was used to repay Federal Home Loan Bank advances. 10 Stockholders' equity increased $238,000 to $29.5 million at September 30, 2002. The change was primarily due to net income of $323,000, a decrease in accumulated other comprehensive income of $150,000, and the payment of a $0.06 per share quarterly cash dividend. COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 GENERAL. For the three months ended September 30, 2002, net income was $323,000 or $0.23 per basic and $0.22 diluted share, compared to net income of $260,000 or $0.18 per basic and diluted share for the three months ended September 30, 2001. INTEREST INCOME. Interest income was $3.4 million and $3.7 million for the three months ended September 30, 2002 and 2001, respectively. The average balance of interest-earning assets decreased $800,000 from $216.2 million for the three months ended September 30, 2001 to $215.4 million for the three months ended September 30, 2002. The average yield on the Bank's interest-earning assets decreased 46 basis points from 6.77% for the three months ended September 30, 2001 to 6.31% for the three months ended September 30, 2002. INTEREST EXPENSE. Interest expense decreased $472,000 to $1.6 million for the three months ended September 30, 2002, as compared to the same period in 2001. The average rate paid on interest-bearing liabilities decreased 90 basis points from 4.38% for the three months ended September 30, 2001 to 3.48% for the three months ended September 30, 2002. The average balance of interest-bearing liabilities decreased $2.3 million to $181.6 million for the three months ended September 30, 2002 from $183.9 million for the three months ended September 30, 2001. 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 $1.8 million for the three months ended September 30, 2002 and $1.6 million for the three months ended September 30, 2001. The average interest rate spread increased 44 basis points from 2.39% for the three months ended September 30, 2001 to 2.83% for the comparable period in 2002. Net interest margin increased 33 basis points and was 3.37% for the three months ended September 30, 2002. PROVISION FOR LOAN LOSSES. There was no provision for loan losses for the three months ended September 30, 2002 or for the comparable period in 2001. NONINTEREST INCOME. Noninterest income was $291,000 for the three months ended September 30, 2002, compared to $84,000 for the three months ended September 30, 2001. Noninterest income for the quarter ended September 30, 2002 included $197,000 in gains on the sale of securities available-for-sale; there were no gains on the sale of securities in the prior fiscal period. 11 NONINTEREST EXPENSE. Noninterest expense for the quarter ended September 30, 2002 was $1.6 million compared to $1.3 million for the quarter ended September 30, 2001. Compensation expense increased $157,000 to $894,000 for the quarter ended September 30, 2002. This increase was primarily due to the increased cost of employee benefit plans which are impacted by the market value of the Company's common stock and increased premiums for employee health insurance. Office occupancy expense decreased $18,000 to $277,000 for the quarter ended September 30, 2002. Professional service expense was $251,000 for the quarter ended September 30, 2002 compared to $116,000 for the quarter ended September 30, 2001. The increase was primarily due to $137,000 in professional service fees related to the proposed sale of the Company. INCOME TAX EXPENSE. Income tax expense increased $66,000 from $123,000 for the three months ended September 30, 2001 to $189,000 for the three months ended September 30, 2002. This increase was primarily due to the increase of $129,000 in pre-tax income. The effective tax rate was 36.9% and 32.1% for the three month periods ended September 30, 2002 and 2001, respectively. The increase in the effective tax rate was primarily due to the reduction of the Company's dividend received deductions. 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 provided by operating activities amounted to $646,000 during the quarter ended September 30, 2002 compared to net cash used in operating activities of $82,000 during the quarter ended September 30, 2001. Under Office of Thrift Supervision regulations, the Bank is required to maintain sufficient liquidity to ensure its safe and sound operation. At September 30, 2002, the Bank's liquidity ratio was 13.85%. 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, 2002 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, 2002 and 2001. 12 At September 30, 2002, the Bank had outstanding loan origination commitments of $3.3 million and unused lines of consumer credit of $1.3 million. 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, 2002 totaled $27.7 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 adequate resources to fund all commitments on a short term and long term basis in accordance with its business strategy. At September 30, 2002, the Bank exceeded all of its regulatory capital requirements with a tangible capital level of $24.3 million, or 11.86% of total adjusted assets, which is above the required level of $3.1 million or 1.50%; core capital of $24.3 million, or 11.86% of total adjusted assets, which is above the required level of $6.1 million or 3.0%; and total risk-based capital of $24.6 million, or 24.33% of risk-weighted assets, which is above the required level of $8.1 million, or 8.00%. IMPACT OF NEW ACCOUNTING STANDARDS None. 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, 2002. ITEM 4. CONTROLS AND PROCEDURES. During the 90-day period prior to the filing date of this report, management, including the Company's President and Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon, and as of the date of that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Company files and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. There have been no significant changes in the Company's internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company carried out its evaluation. There were no significant deficiencies or material weaknesses identified in the evaluation and therefore, no corrective actions were taken. 13 PART II OTHER INFORMATION ITEM 1. Legal Proceedings None ITEM 2. Changes in Securities and Use of Proceeds None ITEM 3. Defaults Upon Senior Securities None ITEM 4. Submission of Matters to a Vote of Security Holders None ITEM 5. Other Information None ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits - Form 99.1 Statements Furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C, Section 1350 (b) Reports on Form 8-K - On July 22, 2002, the Company filed a current report on Form 8-K, under Item 5, to report the signing of the definitive merger agreement with Midwest. 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 1, 2002 14 CERTIFICATIONS I, Michael J. Cahill, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Big Foot Financial Corp.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 15 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 1, 2002 /s/ Michael J. Cahill --------------------------------------- Michael J. Cahill Senior Vice President and Chief Financial Officer 16 I, Timothy L. McCue, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Big Foot Financial Corp.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 17 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 1, 2002 /s/ Timothy L. McCue --------------------------------------- Timothy L. McCue President and Chief Executive Officer 18

AT OR FOR THE AT OR FOR THE THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, --------------------------- --------------------------- 2001 2000 2001 2000 ---------- ---------- ---------- ---------- SELECTED OPERATING DATA: Net interest income before provision for loan losses ........ $ 1,706 $ 1,479 $ 3,333 $ 2,962 Net income .................................................. 209 200 469 357 SELECTED FINANCIAL RATIOS: Return on average assets (2) ............................... 0.37% 0.37% 0.41% 0.33% Return on average stockholders' equity (2) ................. 2.97 2.73 3.34 2.46 Noninterest expense to average assets (2) .................. 2.56 2.37 2.46 2.47 PER SHARE DATA: Basic earnings per share ................................... $ 0.15 $ 0.12 $ 0.33 $ 0.22 Diluted earnings per share ................................. 0.15 0.12 0.33 0.22 Book value per share ....................................... 18.64 17.19 18.64 17.19 Cash dividends per share ................................... 0.06 0.05 0.12 0.10 STOCK QUOTES: High ....................................................... $ 16.950 $ 12.563 $ 16.950 $ 12.563 Low ........................................................ 13.740 11.750 12.900 10.125 At December 31 ............................................. 15.799 12.000 15.799 12.000

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