CGB&L FINANCIAL GROUP INC, 424B3, 1998-08-18

CGB&L FINANCIAL GROUP INC
424B3, 1998-08-18
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED

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PROSPECTUS

CGB&L FINANCIAL GROUP, INC.

(PROPOSED HOLDING COMPANY FOR CERRO GORDO BUILDING AND LOAN, S.B.)

MINIMUM OF 93,500 SHARES OF COMMON STOCK WITH AN
ANTICIPATED MAXIMUM OF 126,500 SHARES OF COMMON STOCK
$10.00 PURCHASE PRICE PER SHARE

CGB&L Financial Group, Inc., a Delaware corporation (the "Holding
Company"), is offering an estimated 126,500 shares of its common stock, par
value $.01 per share (the "Common Stock"), in connection with the conversion of
Cerro Gordo Building and Loan, s.b. (the "Savings Bank") from an
Illinois-chartered mutual savings bank to an Illinois-chartered stock savings
bank and the simultaneous issuance of the Savings Bank's capital stock to the
Holding Company (the "Conversion"). The conversion of the Savings Bank to stock
form, the issuance of the Savings Bank's capital stock to the Holding Company
and the offer of the Common Stock by the Holding Company are being undertaken
pursuant to a plan of conversion of the Savings Bank (the "Plan" or "Plan of
Conversion"). See "THE CONVERSION -- General" as to certain circumstances under
which utilization of the Holding Company may be eliminated from the Conversion
and common stock of the Savings Bank may be substituted for the Common Stock.

(CONTINUED ON NEXT PAGE)
------------------

FOR INFORMATION ON HOW TO SUBSCRIBE,
CALL THE CONVERSION CENTER AT (217) 763-6053.
------------------

FOR A DISCUSSION OF CERTAIN RISKS TO BE CONSIDERED BY
EACH PROSPECTIVE INVESTOR, SEE "RISK FACTORS" -- BEGINNING ON PAGE 9.
------------------

THESE SECURITIES ARE NOT DEPOSITS, ARE NOT INSURED AND
ARE SUBJECT TO RISK, INCLUDING LOSS OF INVESTMENT.
-------------------

THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION ("SEC"), ANY STATE SECURITIES COMMISSION,
THE ILLINOIS OFFICE OF BANKS AND REAL ESTATE ("COMMISSIONER"), OR
THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC")
NOR HAS THE SEC, ANY STATE SECURITIES COMMISSION,
THE COMMISSIONER, OR THE FDIC PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
SUBSCRIPTION ESTIMATED UNDERWRITING ESTIMATED NET
PRICE(1) AND OTHER EXPENSES(2) PROCEEDS TO ISSUER(3)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share . . . . . . . . . . . . . . . $10.00 $2.32(4) $7.68
- --------------------------------------------------------------------------------------------------------------------------------
Minimum Total . . . . . . . . . . . . . $935,000 $254,850 $680,150
- --------------------------------------------------------------------------------------------------------------------------------
Midpoint Total . . . . . . . . . . . . $1,100,000 $254,850 $845,150
- --------------------------------------------------------------------------------------------------------------------------------
Maximum Total . . . . . . . . . . . . . $1,265,000 $254,850 $1,010,150
- --------------------------------------------------------------------------------------------------------------------------------
Maximum Total, as adjusted(5) . . . . . $1,454,750 $254,850 $1,199,900
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The estimated aggregate value of the Common Stock is based on an
independent appraisal by JMP Financial, Inc. ("JMP") as of May 27, 1998.
Based on such appraisal, the Holding Company has determined to offer up to
126,500 shares, subject to adjustment, at a purchase price of $10.00 per
share.

(2) Includes estimated printing, postage, legal, accounting and miscellaneous
expenses which will be incurred in connection with the Conversion. Also
includes estimated fees and reimbursable expenses to be paid to Trident
Securities, Inc. ("Trident") in connection with the Subscription and
Community Offerings, estimated to be $88,500.00. Trident may be deemed to
be an underwriter, and certain amounts to be paid to Trident may be deemed
to be underwriting compensation for purposes of the Securities Act of 1933,
as amended. The Holding Company and the Savings Bank have agreed to
indemnify Trident against certain liabilities, including liabilities that
may arise under the Securities Act of 1933, as amended. See "USE OF
PROCEEDS" and "THE CONVERSION -- Subscription and Community Offerings
Marketing and Other Fees."

(3) Actual net proceeds may vary substantially from the estimated amounts
depending upon the number of shares sold in the Subscription and Community
Offerings. See "PRO FORMA DATA."

(4) Assumes the sale of the midpoint number of shares. If the minimum, maximum
or 15% above the maximum number of shares are sold, estimated expenses per
share would be $2.73, $2.01 or $1.75, respectively, resulting in estimated
net Conversion proceeds per share of $7.27, $7.99 or $8.25, respectively.

(5) Gives effect to the sale of an additional 18,975 shares in the Conversion,
either in the Subscription Offering or the Community Offering, to cover
additional subscriptions, without the resolicitation of subscribers or any
right of cancellation, based on a determination by JMP, as the Savings
Bank's independent appraiser, that such issuance is compatible with its
determination of an increase in the appraised pro forma market value of the
Common Stock. See "THE CONVERSION -- Stock Pricing and Number of Shares to
be Issued."

TRIDENT SECURITIES, INC.

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THE DATE OF THIS PROSPECTUS IS AUGUST 10, 1998

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(CONTINUED FROM PREVIOUS PAGE)

Non-transferable rights to subscribe for shares of Common Stock
("Subscription Rights") have been granted to (i) depositors with aggregate
account balances of $50 or more on deposit at the Savings Bank as of
December 31, 1996 (the "Eligible Account Holders"), (ii) the employee stock
ownership plan (the "ESOP") adopted by the Savings Bank, (iii) depositors with
aggregate account balances of $50 or more on deposit with the Savings Bank as of
June 30, 1998, excluding directors and officers of the Savings Bank and their
associates ("Supplemental Eligible Account Holders"), and (iv) depositors of the
Savings Bank as of August 7, 1998 who are not Eligible Account
Holders or Supplemental Eligible Account Holders ("Other Members"), subject to
the priorities and purchase limitations set forth in the Plan (the "Subscription
Offering"). Any shares of Common Stock not subscribed for in the Subscription
Offering will be offered for sale in a community offering (the "Community
Offering" and, when referred to together with the Subscription Offering, the
"Subscription and Community Offerings" or "Offerings") to members of the general
public to whom this Prospectus and the accompanying stock order form (the "Order
Form") are delivered, with preference to natural persons residing in the
Illinois county of Piatt. The Holding Company and the Savings Bank have the
right to reject, in their sole discretion, orders in whole or in part in the
Community Offering. The Community Offering, if one is held, is expected to
begin immediately after completion of the Subscription Offering. SUBSCRIPTION
RIGHTS ARE NON-TRANSFERABLE; PERSONS FOUND TO BE TRANSFERRING SUBSCRIPTION
RIGHTS WILL BE SUBJECT TO FORFEITURE OF SUCH RIGHTS AND POSSIBLE FURTHER
SANCTIONS AND PENALTIES IMPOSED BY THE COMMISSIONER OR THE FDIC. See "THE
CONVERSION -- The Subscription and Community Offerings" and "-- Restrictions on
Transfer of Subscription Rights and Shares."

The Savings Bank has engaged Trident Securities, Inc. ("Trident"), a
securities and investment banking firm headquartered in Raleigh, North Carolina,
to act as selling agent and to consult with and advise the Holding Company and
the Savings Bank with respect to the Subscription and Community Offerings. If
necessary, any shares of Common Stock not subscribed for in the Subscription and
Community Offerings will be offered to certain members of the general public on
a best efforts basis through a selected dealers arrangement (the "Syndicated
Community Offering"). Trident has agreed to solicit purchase orders and
subscriptions for shares of Common Stock in the Subscription and Community
Offerings, including developing and managing a Syndicated Community Offering if
utilized. Neither Trident nor any other registered broker-dealer is obligated
to take or purchase any shares of Common Stock in the Subscription and Community
Offerings.

With the exception of the ESOP, which is expected to purchase 8% of the
Common Stock sold in the Conversion, NO PERSON OR ENTITY, TOGETHER WITH
ASSOCIATES OF, OR PERSONS ACTING IN CONCERT WITH, SUCH PERSON OR ENTITY, MAY
PURCHASE MORE THAN 6,325 SHARES OR $63,250 OF THE COMMON STOCK SOLD IN THE
CONVERSION (WHICH REPRESENTS 5% OF THE SHARES OF COMMON STOCK BEING OFFERED IN
THE OFFERINGS AT THE MAXIMUM OF THE ESTIMATED VALUATION RANGE AND MAY BE MORE
OR LESS THAN 5% OF THE NUMBER OF SHARES ACTUALLY SOLD IN THE OFFERINGS). The
purchase limitation of 6,325 shares of Common Stock may be increased or
decreased in the discretion of the Boards of Directors of the Holding Company
and Savings Bank, subject to approval by the Commissioner and certain other
conditions. Each person subscribing for Common Stock in the Subscription and
Community Offerings must subscribe for at least 25 shares. See "THE
CONVERSION -- Limitations on Purchases of Shares" for other purchase and sale
limitations.

The total number of shares to be issued in the Conversion will be based
upon an independent valuation of the aggregate pro forma market value of the
Common Stock performed by JMP Financial, Inc. ("JMP"). The price per share has
been fixed at $10.00 per share (the "Purchase Price"). Based on the current
aggregate valuation range of $935,000 to $1,265,000 (the "Estimated Valuation
Range"), the Holding Company is offering from 93,500 to 126,500 shares in the
Subscription and Community Offerings. If the aggregate purchase price of the
Common Stock sold in the Conversion is below $935,000 or above $1,454,750 (I.E.,
15% above the maximum of the Estimated Valuation Range), subscribers will be
resolicited and will have the opportunity to modify or cancel their
subscriptions and to have their subscription funds returned promptly with
interest. Any change in the total dollar amount of the Offerings outside of
this range will be subject to the approval of the Commissioner and the FDIC.
See "PRO FORMA DATA" and "THE CONVERSION -- Stock Pricing and Number of Shares
to be Issued." The sale of Common Stock and completion of the Conversion are
subject to, among other things, approval of the Plan of Conversion by the
Savings Bank's members. See "THE CONVERSION -- General."

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THE SUBSCRIPTION OFFERING AND SUBSCRIPTION RIGHTS IN THE SUBSCRIPTION
OFFERING WILL EXPIRE AT 12:00 NOON, CERRO GORDO, ILLINOIS TIME, ON SEPTEMBER
9, 1998 (THE "SUBSCRIPTION EXPIRATION TIME"), UNLESS EXTENDED. THE
SUBSCRIPTION EXPIRATION TIME MAYBE EXTENDED UNTIL OCTOBER 1, 1998, WITH THE
APPROVAL OF THE COMMISSIONER AND THE FDIC, IF REQUIRED. THE COMMUNITY
OFFERING, IF ANY, IS EXPECTED TO COMMENCE IMMEDIATELY AFTER THE SUBSCRIPTION
EXPIRATION TIME AND MAY TERMINATE ON ANY DAY AFTER THE SUBSCRIPTION
EXPIRATION TIME AT THE DISCRETION OF THE SAVINGS BANK WITHOUT PRIOR NOTICE,
BUT NOT LATER THAN OCTOBER 26, 1998 (OR NOVEMBER 16, 1998, IF THE
SUBSCRIPTION OFFERING IS FULLY EXTENDED), UNLESS EXTENDED WITH THE APPROVAL
OF THE COMMISSIONER. The Holding Company must receive, at the office of the
Savings Bank, a completed Order Form along with full payment (or withdrawal
authorization from a deposit account at the Savings Bank) of $10.00 per share
for each share ordered. Funds so received will be placed in a segregated
account established for purposes of the Conversion at the Savings Bank, and
interest on funds in such account will be paid at the Savings Bank's then
current passbook rate from the date payment is received until the Conversion
is completed or terminated. Payments authorized by withdrawals from deposit
accounts will continue to earn interest at the contractual rate of the
deposit account until the Conversion is completed or terminated. If the
Conversion is not completed within 45 days after the date on which the
Subscription Expiration Time occurs (I.E., on or before November 16, 1998,
assuming the Subscription Offering has been fully extended) and the
Commissioner consents to an extension of time to complete the Conversion,
subscribers will be given the right to increase, decrease or rescind their
orders. If an affirmative response to any resolicitation is not received by
the Savings Bank or the Holding Company from subscribers, such orders will be
rescinded and all funds will be returned promptly with interest. If such
period is not extended and if the Conversion is not completed by October 26,
1998 (or November 16, 1998, if the Subscription Offering is fully extended),
all subscription funds will be promptly returned, together with accrued
interest, and all withdrawal authorizations terminated.

As a newly organized company, the Holding Company has never issued capital
stock, and consequently there is no established market for the Common Stock.
Following the completion of the Subscription and Community Offerings, it is
anticipated that the Common Stock (symbol: CGBL) will be traded on the
over-the-counter market with quotations available through the OTC Bulletin
Board. Trident is expected to make a market in the Common Stock by developing
and maintaining historical stock trading records, soliciting potential buyers
and sellers and attempting to match buy and sell orders. In connection with its
market making activities, Trident may buy or sell shares from time to time for
its own account. However, Trident will not be subject to any obligation with
respect to such efforts. The Holding Company will use its best efforts to
encourage and assist a professional market maker in establishing and maintaining
a market for the Common Stock. The Common Stock meets the criteria for
quotation on the OTC Bulletin Board .

The development of an active trading market depends on the existence of
willing buyers and sellers. Due to the small size of the Offerings, it is
highly unlikely that an active trading market will develop and be maintained.
Purchasers of the Common Stock could have difficulty disposing of their shares
and should not view the shares as a short-term investment. Purchasers may not
be able to sell their shares at a price equal to or above the price paid for the
shares. See "RISK FACTORS -- Potential Illiquidity of Market for Common Stock"
and "MARKET FOR COMMON STOCK."

AVAILABLE INFORMATION

Neither the Holding Company nor the Savings Bank is currently subject to
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").

The Holding Company has filed a Registration Statement with the SEC on
Form SB-2 under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Stock offered hereby. As permitted by the rules and
regulations of the SEC, this Prospectus does not contain all of the information
set forth in the Registration Statement. Such information can be examined and
copied at the public reference facilities of the SEC located at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of
the SEC at 75 Park Place, 14th Floor, New York, New York 10007 and Room 3190,
John C. Kluczynski Building, 230 South Dearborn Street, Chicago, Illinois
60604. Copies of such material can be obtained by mail from the SEC at
prescribed rates from the Public Reference Section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, the SEC maintains a
worldwide web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC,
including the Holding Company; the address is (www.sec.gov). Copies of the
Registration Statement, including JMP's appraisal report,

iv
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are also available for inspection at the office of the Savings Bank at 229 E.
South Street, Cerro Gordo, Illinois 61818. Inquiries concerning such
inspections can be made to the Savings Bank at (217) 763-2911.

The Savings Bank has filed an Application for Conversion with the
Commissioner for approval to convert from an Illinois-chartered mutual savings
bank to an Illinois-chartered stock savings bank. Such application was approved
on August 7, 1998. Pursuant to the rules and regulations of the
Commissioner, this Prospectus omits certain information contained in such
application. The application may be inspected at the offices of the Commissioner
located at 310 South Michigan Avenue, Chicago, Illinois 60606 and 500 West
Monroe Street, Suite 800, Springfield, Illinois 62701. Copies of the Plan,
copies of the Savings Bank's proposed stock articles of incorporation and stock
bylaws and copies of the Holding Company's certificate of incorporation and
bylaws, are available for inspection at the office of the Savings Bank and may
be obtained by writing to the Savings Bank at P.O. Box 680, Cerro Gordo,
Illinois 61818-0680, or by telephoning the Conversion Center at (217) 763-6053.

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CERRO GORDO BUILDING AND LOAN, S.B.
229 E. SOUTH STREET
CERRO GORDO, ILLINOIS 61818

[MAP]

THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS DEPOSITS AND ARE NOT
INSURED BY THE FDIC, THE COMMISSIONER, THE SAVINGS

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ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS.

CGB&L FINANCIAL GROUP, INC.

The Holding Company was organized as a Delaware corporation on May 21, 1998
at the direction of the Board of Directors of Savings Bank to acquire all of the
capital stock to be issued by the Savings Bank in the Conversion. Following the
Conversion, the Holding Company will be engaged in the business of directing,
planning and coordinating the business activities of the Savings Bank. In the
future, the Holding Company may acquire or organize other operating
subsidiaries, although there are no current plans, arrangements, agreements or
understandings to do so. The Holding Company's offices are located at
229 E. South Street, Cerro Gordo, Illinois 61818, and its telephone number is
(217) 763-2911. See "CGB&L FINANCIAL GROUP, INC."

CERRO GORDO BUILDING AND LOAN, S.B.

The Savings Bank is an Illinois-chartered mutual savings bank regulated by
the Commissioner, and its deposits are insured by the FDIC through the SAIF.
The Savings Bank was originally chartered in 1886 as a state-chartered savings
and loan association and converted to a state-chartered savings bank on
December 31, 1992 under its current name of Cerro Gordo Building and Loan, s.b.
At March 31, 1998, the Savings Bank had total assets of $6.9 million, total
deposits of $5.3 million, retained earnings of $873 thousand and total equity
capital of $986 thousand. The Savings Bank conducts its business through its
office located at 229 E. South Street, Cerro Gordo, Illinois 61818, and its
telephone number is (217) 763-2911.

The Savings Bank provides its customers with a range of community banking
services. The Savings Bank is primarily engaged in the business of attracting
deposits from the general public and using such deposits to invest in one- to
four-family residential mortgage loans and, to a lesser extent, multi-family
residential, commercial real estate and share loans. In addition, the Savings
Bank invests in interest bearing time deposits and FHLMC common stock. See
"BUSINESS OF THE SAVINGS BANK."

THE CONVERSION

The Savings Bank is in the process of converting from an Illinois-chartered
mutual savings bank to an Illinois-chartered stock savings bank and becoming a
wholly-owned subsidiary of the Holding Company. As part of the Conversion, the
Savings Bank will issue all of its capital stock to the Holding Company in
exchange for 50% of the net proceeds of the Conversion, less the amount of
proceeds necessary to fund the ESOP. The Holding Company will simultaneously
sell its Common Stock on a priority basis to certain depositors of the Savings
Bank, the ESOP and other persons and entities in the Subscription and Community
Offerings.

The Board of Directors of the Savings Bank approved the Plan of Conversion
on March 11, 1998 and amendments to the Plan of Conversion on May 26, 1998 and
on July 16, 1998, subject to approval by the Commissioner, the receipt of notice
from the FDIC that it does not intend to object to the Conversion, and the
approval of the members of the Savings Bank holding not less than a majority of
the total outstanding votes as of the record date fixed for, and who continue to
be members on, the date of the special meeting of members called for approval of
the Plan. The Board of Directors of the Savings Bank approved the Plan of
Conversion because it believes that conversion to a stock form of organization
and the concurrent formation of a holding company will offer a number of
advantages to the Savings Bank, including a larger capital base, enhanced
services to its customers, and the opportunity for depositors, management and
employees of the Savings Bank to become stockholders of the Holding Company.

On August 7, 1998, the Commissioner approved the Savings Bank's
Application for Approval of Conversion, subject to the receipt by the Savings
Bank and the Holding Company of all other required regulatory approvals and
compliance with all other outstanding legal requirements. On August 3, 1998,
the FDIC

<PAGE>

issued a letter to the Savings Bank stating its non-objection to the
consummation of the Conversion, subject to the satisfaction of certain
conditions including the approval of the Plan of Conversion by the Savings
Bank's members and the receipt by the FDIC of an updated appraisal that
takes into account the results of the Subscription Offering. In accordance
with applicable Illinois law, the Plan of Conversion will be submitted to the
Savings Bank's members for their approval at a special meeting to be held on
September 15, 1998 (the "Special Meeting"). See "THE CONVERSION --General;"
and "-- Purposes of Conversion." On August 3, 1998, the Federal Reserve Bank
also approved the Holding Company's application to acquire all of the
outstanding capital stock of the Savings Bank, subject to compliance with
certain restrictions upon the investments of, and the incurrence of
additional debt by, the ESOP and the expiration of the statutory
post-approval waiting period. Such waiting period will expire on August 18,
1998. See "CGB&L FINANCIAL GROUP, INC."

After the Conversion, the Savings Bank's account holders will not have
voting rights with respect to the converted Savings Bank. See "THE
CONVERSION -- Effects of Conversion -- Voting Rights."

THE OFFERINGS

The Holding Company is offering up to 126,500 shares of Common Stock at
$10.00 per share in the Subscription Offering. Non-transferable Subscription
Rights have been granted to the following persons and entities, who may
exercise such Subscription Rights in the following order of priority: (i)
Eligible Account Holders (depositors with aggregate account balances of $50
or more on deposit at the Savings Bank as of December 31, 1996), (ii) the
ESOP, (iii) Supplemental Eligible Account Holders (depositors with aggregate
account balances of $50 or more on deposit with the Savings Bank at June 30,
1998, excluding directors and officers of the Savings Bank and their
associates), and (iv) Other Members (depositors of the Savings Bank as of
August 7, 1998 who are not Eligible Account Holders or Supplemental Eligible
Account Holders). Subject to the prior rights of holders of Subscription
Rights, the Holding Company may subsequently offer the Common Stock for sale
in a Community Offering to persons to whom this Prospectus and an Order Form
are delivered, with preference to natural persons residing in the Illinois
county of Piatt. All purchases in the Community Offering are subject to the
right of the Holding Company and Savings Bank to reject any order in whole or
in part.

SUBSCRIPTION RIGHTS ARE NONTRANSFERABLE; PERSONS FOUND TO BE
TRANSFERRING SUBSCRIPTION RIGHTS WILL BE SUBJECT TO FORFEITURE OF SUCH RIGHTS
AND POSSIBLE FURTHER SANCTIONS AND PENALTIES IMPOSED BY THE COMMISSIONER OR
THE FDIC. THE SUBSCRIPTION OFFERING AND SUBSCRIPTION RIGHTS IN THE
SUBSCRIPTION OFFERING WILL EXPIRE AT THE SUBSCRIPTION EXPIRATION TIME (12:00
NOON, CERRO GORDO, ILLINOIS TIME, ON SEPTEMBER 9, 1998), UNLESS EXTENDED. THE
SUBSCRIPTION EXPIRATION TIME MAY BE EXTENDED UNTIL OCTOBER 1, 1998, WITH THE
APPROVAL OF THE COMMISSIONER AND THE FDIC, IF REQUIRED. THE COMMUNITY
OFFERING, IF ANY, IS EXPECTED TO COMMENCE IMMEDIATELY AFTER THE SUBSCRIPTION
EXPIRATION TIME AND MAY TERMINATE ON ANY DAY AFTER THE SUBSCRIPTION
EXPIRATION TIME AT THE DISCRETION OF THE SAVINGS BANK WITHOUT PRIOR NOTICE,
BUT NOT LATER THAN OCTOBER 26, 1998 (OR NOVEMBER 16, 1998, IF THE
SUBSCRIPTION OFFERING IS FULLY EXTENDED), UNLESS EXTENDED WITH THE APPROVAL
OF THE COMMISSIONER.

Any holder of Subscription Rights who desires to subscribe for shares of
Common Stock must do so prior to the Subscription Expiration Time by delivering
(by mail or in person) to the Savings Bank's office a properly executed and
completed Order Form, together with payment of $10.00 per share for each share
for which subscription is made. Payment may be made (i) in cash, if delivered
in person to the office of the Savings Bank, (ii) by check or money order, or
(iii) by appropriate authorization of withdrawal from a deposit account in the
Savings Bank. In the event of an oversubscription, available shares will be
allocated pro rata in accordance with procedures established in the Plan of
Conversion. An executed Order Form, once received by the Holding Company, may
not be modified, amended or rescinded without the consent of the Holding
Company, except in the event of a resolicitation or unless the Conversion is not
completed within 45 days of the termination of the Subscription Offering. See
"THE OFFERING" and "THE CONVERSION."

PURCHASE LIMITATIONS

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With the exception of the ESOP, which is expected to purchase 8% of the
Common Stock sold in the Conversion, no person or entity, together with
associates of, or persons acting in concert with, such person or entity, may
purchase more than 6,325 shares or $63,250 of Common Stock sold in the
Conversion (which represents 5% of the shares of Common Stock being offered in
the Offerings at the maximum of the Estimated Valuation Range and may be more
or less than 5% of the number of shares actually sold in the Offerings). The
purchase limitation of 6,325 shares of Common Stock may be increased or
decreased in the discretion of the Boards of Directors of the Holding Company
and the Savings Bank, subject to the approval of the Commissioner and certain
other conditions. Each person subscribing for Common Stock in the Subscription
and Community Offerings must subscribe for at least 25 shares. See "THE
CONVERSION -- Limitations on Purchases of Shares" for other purchase and sale
limitations.

STOCK PRICING AND NUMBER OF SHARES TO BE ISSUED IN THE CONVERSION; APPRAISAL

The Commissioner's regulations and the Plan of Conversion require that the
aggregate purchase price of the Common Stock to be issued in the Conversion be
based upon an independent appraisal of the estimated pro forma market value of
the Common Stock. The Savings Bank has retained JMP to prepare an appraisal of
the pro forma market value of the Common Stock to be issued in connection with
the Conversion. JMP has advised the Savings Bank that, in its opinion, at
May 27, 1998, the aggregate estimated pro forma market value of the Common Stock
ranged from $935,000 to $1,265,000 or from 93,500 shares to 126,500 shares,
assuming a purchase price of $10.00 per share. The $10.00 purchase price per
share is a uniform price for all purchasers in the Subscription and Community
Offerings and was set by the Board of Directors of the Savings Bank.

The appraisal of the pro forma market value of the Common Stock is based
upon a number of factors and should not be considered a recommendation to buy
shares of the Common Stock or assurance that, after the Conversion, an investor
will be able to resell shares of Common Stock at the Purchase Price. JMP will
update or confirm its appraisal prior to completion of the Conversion, and the
number of shares to be sold will be fixed at that time. Consummation of the
Offering is subject to the Commissioner's and the FDIC's approval of the
pro forma market value reflected in the updated or re-confirmed appraisal. See
"THE CONVERSION -- Stock Pricing and Number of Shares to be Issued."

SUBSCRIPTION AND COMMUNITY OFFERINGS MARKETING AND RELATED FEES

The Savings Bank has engaged Trident to act on a best efforts basis as
selling agent in connection with the Offerings. Trident will consult with and
advise the Holding Company and the Savings Bank with respect to the Subscription
and Community Offerings and will solicit subscriptions and purchase orders for
shares of Common Stock in the Subscription and Community Offerings. The Savings
Bank and the Holding Company will pay Trident $53,500 for financial advisory
services and for acting as selling agent in connection with the Subscription and
Community Offerings and an amount not to exceed $35,000 for Trident's
out-of-pocket expenses, including legal fees. The fees paid to Trident for
financial advisory services and acting as selling agent may be deemed
underwriting fees.

BENEFITS OF THE CONVERSION TO MANAGEMENT AND RELATED PERSONS

GENERAL. The Board of Directors of the Holding Company expects to approve
three benefit plans pursuant to which officers, directors and employees of the
Holding Company and the Savings Bank may be entitled to receive, following the
Conversion, shares of Common Stock or options to acquire shares of Common Stock,
in addition to the shares which such officers, directors or employees may
purchase in the Subscription and Community Offerings. Those benefit plans
consist of the ESOP, the Management Recognition Plan ("MRP") and the Stock
Option Plan (collectively, the "Employee Benefit Plans"). If the MRP and Stock
Option Plan are adopted, such plans will be subject to stockholders' approval at
a meeting of stockholders of the Holding Company to be held no earlier than six
months following consummation of the Conversion.

ESOP. Under the terms of the Plan of Conversion, the ESOP will be eligible
to purchase, in the aggregate, approximately 10,120 shares, or 8% of the
aggregate number of shares of Common Stock issued and sold in

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connection with the Conversion (assuming the sale of 126,500 shares at the
maximum of the Estimated Valuation Range). Such shares will be allocated among
the officers and employees of the Savings Bank in accordance with the terms and
conditions of the ESOP. See "MANAGEMENT OF THE HOLDING COMPANY AND SAVINGS
BANK -- Employee Benefit Plans -- ESOP."

MRP. Subject to and following the approval of the MRP at a stockholder's
meeting to be held no earlier than six months following consummation of the
Conversion, the MRP intends to purchase (with funds provided by the Holding
Company), either in the open market or from the Holding Company in the form of
newly issued shares, 5,060 shares, or a number of shares equal to 4% of the
aggregate number of shares of Common Stock issued and sold in connection with
the Conversion (assuming the sale of 126,500 shares at the maximum of the
Estimated Valuation Range), for issuance to officers, directors and employees of
the Holding Company and the Savings Bank in accordance with the terms and
conditions of the MRP and applicable laws and regulations. See "MANAGEMENT OF
THE HOLDING COMPANY AND SAVINGS BANK -- Employee Benefit Plans -- Management
Recognition Plan."

Shares issued under the MRP will be issued at no cost to recipients.
Assuming the issuance of 126,500 shares in the Conversion and receipt of
stockholder approval, 5,060 shares ($50,600 of Common Stock based on an initial
offering price of $10.00 per share) would be issued pursuant to the MRP. It is
expected that Maralyn F. Heckman, President, would be granted 25% of the shares
of Common Stock to be issued under the proposed MRP, or 1,265 shares ($12,650 of
Common Stock based on an initial price of $10.00 per share), assuming the
issuance of 126,500 shares of Common Stock in the Conversion. If the MRP is
submitted to and approved by the Holding Company's stockholders within one year
after consummation of the Conversion, it is expected that the six nonemployee
directors of the Savings Bank would be granted, in the aggregate, a maximum of
30% of the shares of Common Stock to be issued under the MRP, or 1,518 shares
($15,180 of Common Stock based on an initial offering price of $10.00 per
share), assuming the issuance of 126,500 shares of Common Stock in the
Conversion. Remaining shares not granted to the executive officers or
nonemployee directors under the MRP would be available for possible grants to
employees of the Savings Bank or could be held for later grants in the future
pursuant to the plan.

STOCK OPTION PLAN. Subject to and following the approval of the Stock
Option Plan at a stockholder's meeting to be held no earlier than six months
following consummation of the Conversion, an additional 12,650 shares of
authorized but unissued shares of Common Stock, or a number of shares equal to
10% of the aggregate number of shares of Common Stock issued and sold in
connection with the Conversion (assuming the sale of 126,500 shares at the
maximum of the Estimated Valuation Range), will be reserved for issuance to
officers, directors and employees of the Holding Company and the Savings Bank in
accordance with the terms and conditions of the Stock Option Plan and applicable
laws and regulations. See "MANAGEMENT OF THE HOLDING COMPANY AND SAVINGS
BANK -- Employee Benefit Plans -- Stock Option Plan."

It is expected that Maralyn F. Heckman, President, would be granted 25% of
the options to be issued under the proposed Stock Option Plan, or options to
purchase 3,162 shares of Common Stock assuming the issuance of 126,500 shares in
the Conversion. If the Stock Option Plan is submitted to and approved by the
Holding Company's stockholders within one year after consummation of the
Conversion, the six nonemployee directors of the Savings Bank would be granted,
in the aggregate, a maximum of 30% of the options to be issued under the Stock
Option Plan, or options to purchase 3,795 shares of Common Stock, assuming the
issuance of 126,500 shares in the Conversion. Remaining options not granted to
executive officers or nonemployee directors under the Stock Option Plan would be
available for possible grants to employees of the Savings Bank or could be held
for later grants in the future pursuant to the plan.

EMPLOYMENT AGREEMENTS. Upon the Conversion, the Savings Bank and the
Holding Company each intend to enter into an employment agreement with
Mrs. Maralyn F. Heckman (collectively, the "Employment Agreements"). The
Employment Agreements are intended to ensure that the Savings Bank and the
Holding Company

4
<PAGE>

will be able to maintain a stable and competent management base after the
Conversion. The continued success of the Savings Bank and the Holding Company
depends to a significant degree on the skills and competence of the above
referenced officer.

The Employment Agreements provide for three-year terms for Mrs. Heckman's
employment. The term of the Employment Agreements will be automatically
extended on a daily basis unless written notice of non-renewal is given by the
Board of Directors or Mrs. Heckman. Therefore, on any day that Mrs. Heckman is
employed by the Savings Bank and the Company, and assuming that neither the
Board of Directors nor Mrs. Heckman have provided prior notice of non-renewal,
the remaining term in Mrs. Heckman's employment agreements will be three years.
The Employment Agreements provide that Mrs. Heckman's base salary will be
reviewed annually. The base salary which will be effective for such Employment
Agreements for Mrs. Heckman will be her current salary, $40,000.00. In addition
to the base salary, the Employment Agreements provide for, among other things,
participation in stock benefits plans and other fringe benefits applicable to
executive personnel. The Employment Agreements provide for termination by the
Savings Bank or the Holding Company for cause, as defined in the Employment
Agreements, at any time. In the event the Savings Bank or the Holding Company
chooses to terminate Mrs. Heckman's employment for reasons other than for cause,
or in the event of Mrs. Heckman's resignation from the Savings Bank and the
Holding Company upon: (i) failure to re-elect Mrs. Heckman to her current
offices; (ii) a material change in Mrs. Heckman's functions, duties or
responsibilities; (iii) a relocation of Mrs. Heckman's principal place of
employment by more than 25 miles; (iv) a reduction in the benefits and
perquisites being provided to Mrs. Heckman in the Employment Agreements;
(v) liquidation or dissolution of the Savings Bank or the Holding Company; or
(vi) a breach of the Employment Agreement by the Savings Bank or the Holding
Company, Mrs. Heckman or, in the event of death, her beneficiary would be
entitled to receive an amount equal to the remaining base salary payments due to
Mrs. Heckman for the remaining term of the Employment Agreement and the
contributions that would have been made on Mrs. Heckman's behalf to any employee
benefit plans of the Savings Bank and the Holding Company during the remaining
term of the Employment Agreements. The Savings Bank and the Holding Company
would also continue to pay for Mrs. Heckman's life, health, dental and
disability coverage for the remaining term of the Employment Agreements. Upon
termination of Mrs. Heckman's employment, except upon a change in control,
Mrs. Heckman is subject to a one year non-competition clause.

Under the Employment Agreements, if voluntary or involuntary termination
follows a change in control of the Savings Bank or the Holding Company,
Mrs. Heckman or, in the event of Mrs. Heckman's death, her beneficiary would be
entitled to a severance payment equal to the greater of: (i) the payments due
for the remaining terms of the Employment Agreements; or (ii) three times the
average of the five preceding taxable years' annual compensation. The Savings
Bank and the Holding Company would also continue Mrs. Heckman's life, health,
and disability coverage for thirty-six months. Notwithstanding that both
Employment Agreements provide for a severance payment in the event of a change
in control, Mrs. Heckman would only be entitled to receive a severance payment
under one agreement.

Payments to Mrs. Heckman under the Savings Bank's Employment Agreement will
be guaranteed by the Holding Company in the event that payments or benefits are
not paid by the Savings Bank. Payment under the Holding Company's Employment
Agreement would be made by the Holding Company. All reasonable costs and legal
fees paid or incurred by Mrs. Heckman pursuant to any dispute or question of
interpretation relating to the Employment Agreements shall be paid by the
Savings Bank or Holding Company, respectively, if Mrs. Heckman is successful on
the merits pursuant to a legal judgment, arbitration or settlement. The
Employment Agreements also provide that the Savings Bank and Holding Company
shall indemnify Mrs. Heckman to the fullest extent allowable under Illinois and
Delaware law, respectively. In the event of a change in control of the Savings
Bank or the Holding Company, the total amount of payments due under the
Employment Agreements, based solely on current base salary for such Employment
Agreements and excluding any benefits under any employee benefit plan which may
be payable, would be approximately $120,000. See "MANAGEMENT OF THE HOLDING
COMPANY AND SAVINGS BANK -- Employment Agreements."

USE OF PROCEEDS
5
<PAGE>

The net proceeds from the sale of the Common Stock are expected to range
from $680,150, at the minimum of the Estimated Valuation Range, to $1,010,150,
at the maximum of the Estimated Valuation Range, with $845,150 at the midpoint
of the Estimated Valuation Range. The Commissioner has granted the Holding
Company approval to retain 50% of the net proceeds received in the Conversion,
plus the amount necessary to finance the purchase of Common Stock by the ESOP in
the Conversion. The balance of the net proceeds will be paid to the Savings
Bank in exchange for all of its capital stock.

The net proceeds of the Offering which are paid to the Savings Bank will
become part of the Savings Bank's general funds and will be used for general
corporate purposes, including the expansion of its deposit base and loan
originations and investment in securities of the kind in which the Savings Bank
currently invests. The Holding Company intends initially to invest the net
proceeds of the Offering which it retains in securities of the kind in which the
Savings Bank currently invests. The proceeds of the Offering retained by the
Holding Company may be used for additional contributions to the Savings Bank in
the form of debt or equity, for future acquisitions and diversification
activities, and for dividends on, or repurchases of, Common Stock, when and as
permitted by the Commissioner, the Federal Reserve Board and the FDIC. The
Holding Company does not currently anticipate any tax-free return of capital.
Neither the Savings Bank nor the Holding Company currently has any specific
plans, arrangements, agreements or understandings with respect to any
acquisitions, diversification activities or repurchases of Common Stock. The
Offerings are being conducted at this time to effect the Conversion and to
provide the Holding Company and Savings Bank with the described business
alternatives.

DIVIDENDS

Following the Conversion, the Holding Company currently expects to pay
semi-annual cash dividends on the Common Stock at an initial aggregate annual
rate of approximately $.20 per share (a semi-annual rate of $.10 per share), or
2% annually based upon the initial offering price of $10.00, with the first
dividend being declared and paid following fiscal year end 1999 and every six
months thereafter. Payment of dividends will be subject to determination and
declaration by the Holding Company's Board of Directors. In determining whether
or not to declare or pay dividends and the amount of such dividends, if any, the
Board of Directors of the Holding Company will take into account such factors as
the Holding Company's financial condition, its results of operations, tax
considerations, capital requirements, industry standards, and economic
conditions. Following the Conversion, the Holding Company initially will have
no source of income other than earnings from the investment of the amount of the
net proceeds of the Conversion it retains, payments of principal and interest on
its loan to the ESOP, and dividends from the Savings Bank. Certain regulatory
restrictions generally applicable to savings institutions may limit the Savings
Bank's ability to pay dividends to the Holding Company. See "SUPERVISION AND
REGULATION -- The Savings Bank -- Dividends." There can be no assurance that
dividends will in fact be paid on the Common Stock or that such dividends, if
paid, will not be reduced or eliminated in future periods. See "DIVIDEND
POLICY."

MARKET FOR COMMON STOCK

6
<PAGE>

RISK FACTORS

See "RISK FACTORS" for a discussion of certain risks related to this
offering.

SELECTED FINANCIAL INFORMATION OF THE SAVINGS BANK

The following table sets forth certain selected financial data for the
Savings Bank. This summary has been derived from, and should be read in
conjunction with, the financial statements of the Savings Bank and the related
notes thereto and management's discussion and analysis of financial condition
and results of operations included elsewhere in this Prospectus.

7
<PAGE>

AT MARCH 31,
-------------------------------------------------------
1998 1997
---- ----
<S> <C> <C>
FINANCIAL DATA:
Total assets ...................................... $6,934,981 $6,288,646
Cash and due from banks ........................... 524,845 109,912
Interest-bearing time deposits .................... 590,000 1,279,000
Investment securities available for sale .......... 175,329 100,716
Loans, net ........................................ 5,526,189 4,705,287
Federal Home Loan Bank stock ...................... 46,200 43,000
Deposits .......................................... 5,250,307 5,308,464
Long-term debt .................................... 600,000
Total equity capital .............................. 986,014 894,897

FOR THE FISCAL YEAR ENDED
MARCH 31,
-------------------------------------------------------
1998 1997(1)
---- -------
<S> <C> <C>

OPERATING DATA:
Total interest income ............................. $541,984 $459,968
Total interest expense ............................ 309,763 270,470
-------- --------
Net interest income ............................... 232,221 189,498
Provision for loan losses ......................... 26,500 --
-------- --------
Net interest income after provision for loan ...... 205,721 189,498
losses ............................................ 6,708 6,510
Non-interest income ............................... 159,855 176,671
-------- --------
Non-interest expense .............................. 52,574 19,337
Income before income tax .......................... 10,702 1,378
-------- --------
Income tax expense ................................ $ 41,872 $ 17,959
-------- --------
-------- --------
Net income
OTHER DATA:
Number of:
Real estate loans outstanding.................. 197 194
-------- --------
-------- --------
Deposit accounts............................... 638 629
-------- --------
-------- --------

KEY OPERATING RATIOS:
The table below sets forth certain performance
ratios of the Savings Bank

FOR THE FISCAL YEAR ENDED MARCH 31,
-------------------------------------------------------
1998 1997(1)
---- -------
<S> <C> <C>
Return on assets (net income divided by
average total assets)............................. 0.63% 0.31%
Return on average equity (net income divided by
average equity)................................... 4.60 2.27
Average equity to average assets................... 13.62 13.47
Interest rate spread (difference between
average yield on interest earning assets and
average cost of interest bearing liabilities)..... 2.67 1.81
Net interest margin (net interest income as a
percentage of average interest earning assets)... 3.47 2.97
Non-interest expense to average assets
Average interest-earning assets to interest
bearing liabilities............................... 2.38 2.76
Allowance for loan losses
to total loans at end of period................... 117.29 116.96
Net charge offs to average outstanding
loans during the period........................... 0.58 0.13
Ratio of nonperforming assets N/A N/A
to total assets(2)................................ 0.16 0.68
</TABLE>

(1) During fiscal 1997, the Savings Bank changed its fiscal year end from
April 30 to March 31. Accordingly, information related to income and expense
during the period ending March 31, 1997 is for the eleven-month period then
ended. Operating ratios have been annualized where appropriate.

(2) Nonperforming assets include non-accrual loans, accruing loans
delinquent 90 days or more and real estate owned.

8
<PAGE>

RISK FACTORS

BEFORE INVESTING IN SHARES OF COMMON STOCK OFFERED HEREBY, PROSPECTIVE
INVESTORS SHOULD CAREFULLY CONSIDER THE RISK FACTORS PRESENTED BELOW, IN
ADDITION TO OTHER CONSIDERATIONS DISCUSSED ELSEWHERE IN THIS PROSPECTUS.

DECREASES IN RETURN ON EQUITY

As a result of the Conversion, stockholder's equity will be substantially
increased. Accordingly, the increase in equity is expected to result in a
reduction of the Savings Bank's return on average equity (net income divided by
average equity) compared with historical levels, absent a corresponding increase
in net income, and it is not expected that the Savings Bank will be able to
increase net income in future periods commensurate with the increase in equity.
For the twenty-four month period ended March 31, 1998, the Savings Bank's
return on average equity was approximately 3.44%. Assuming 110,000 shares are
sold at the midpoint of the valuation range, using the assumptions under "PRO
FORMA DATA", the pro forma return on equity at March 31, 1998 would have been
approximately 3.21%.

DEPENDENCE ON KEY PERSONNEL

The Savings Bank depends to a considerable degree on a limited number of
key management personnel, in particular, the Savings Bank's secretary, treasurer
and C.E.O., Maralyn F. Heckman. The loss of such personnel could adversely
affect the Savings Bank's operations. The Savings Bank and the Holding Company
intend to enter into the Employment Agreements with Mrs. Heckman. Neither the
Savings Bank nor the Holding Company has obtained, or expects to obtain, "key
man" life insurance policies for any executive officers of the Savings Bank or
the Holding Company. Management believes that the Savings Bank's future success
will depend in large part upon its ability to attract and retain qualified
personnel. There can be no assurance that the Savings Bank will be successful
in attracting and retaining such personnel. See "MANAGEMENT OF THE HOLDING
COMPANY AND SAVINGS BANK."

POTENTIAL IMPACT OF CHANGES IN REAL ESTATE VALUES

At March 31, 1998, approximately 98.6% of the Savings Bank's net loan
portfolio consisted of loans secured by real estate. At such date, all of the
loans secured by real estate were secured by real estate properties located in
Central Illinois. In recent periods, several regions of the United States have
experienced declines in the market value of real estate, and there can be no
assurance as to the future performance of the Illinois real estate markets,
including those in which the Savings Bank operates. A decline in the Illinois
real estate market could have a material adverse effect on the Savings Bank's
operations. Depressed real estate values may result in an increase in
nonperforming assets, hamper disposition of such nonperforming assets and result
in losses upon such disposition.

COMPETITION

The Savings Bank's market area is a highly competitive market, and the
Savings Bank faces significant competition both in attracting deposits and in
originating loans. The Savings Bank faces direct competition from a number of
financial institutions, many of which are significantly larger than the Savings
Bank and, therefore, have greater financial and marketing resources than the
Savings Bank.

INTERNAL APPRAISALS AND LIMITED COMPARABLE SALES GROUP DATA

Real estate securing loans of greater than $250,000 is appraised by an
outside appraiser approved by the Savings Bank's Board of Directors. Real
Estate securing loans of less than $250,000 is appraised by an internal
appraisal committee which is comprised of members of the Savings Bank's Board of
Directors. From time to time, the internal appraisal committee issues
appraisals in connection with

9
<PAGE>

loans, the dollar amount of which are dependent upon the appraised value of the
underlying real estate. In either event, comparable sales group data is
sometimes limited or unavailable due to the size and nature of the market area.
The fact that comparable sales group data may be limited makes certain
appraisals less reliable.

RISKS ASSOCIATED WITH THE SAVINGS BANKS PRIMARY MARKET AREA

The Savings Bank's market area is primarily contained within a ten mile
radius of Cerro Gordo, Illinois. This area contains portion of Macon, Moultrie
and Piatt counties. Its economy is diversified among agriculture, manufacturing
and services. Although the economy is diversified and generally stable,
population and household growth, and median and per capa income levels for the
Savings Bank's primary market area are generally lower than comparable levels
for Illinois and the nation, while unemployment levels are generally higher.
Management regards the Savings Bank's primary market area as a low growth area
in which there is significant competition among financial service providers for
market share. See "BUSINESS OF THE SAVINGS BANK - Competition." Management
believes that opportunities for future earnings growth in the Savings Bank's
primary market area are limited in light of these factors.

SLOW GROWTH

The Savings Bank's historical growth rate has been slow. Management does
not expect the Savings Bank's growth rate to accelerate after the Offerings.

ESOP AND MRP EXPENSE

In November 1993, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 93-6 entitled "Employers'
Accounting for Employee Stock Ownership Plans" ("SOP 93-6"). SOP 93-6, among
other things, changes the measure of compensation expense recorded by employers
for leveraged ESOPs from the cost of ESOP shares to the fair value of ESOP
shares. Under SOP 93-6, the Savings Bank will recognize compensation cost equal
to the fair value of the ESOP shares during the periods in which they become
committed to be released. To the extent that the fair value of the Common Stock
appreciates, the Savings Bank will recognize increased compensation expense as
the ESOP shares are committed for release. In addition, it is anticipated that
the MRP will purchase shares of Common Stock equal to 4.0% of the shares issued
in the Conversion. Both the ESOP and the MRP will increase employee
compensation expense in the future. See "PRO FORMA DATA".

POTENTIAL ILLIQUIDITY OF MARKET FOR COMMON STOCK

As a newly organized company, the Holding Company has never issued capital
stock, and consequently there is no established market for the Common Stock.
Following the completion of the Subscription and Community Offerings, it is
anticipated that the Common Stock (symbol: CGBL) will be traded on the
over-the-counter market with quotations available through the OTC Bulletin
Board. Trident is expected to make a market in the common stock by developing
and maintaining historical stock trading records, soliciting potential buyers
and sellers and attempting to match buy and sell orders. In connection with its
market making activities, Trident may buy or sell shares from time to time for
its own account. However, Trident will not be subject to any obligation with
respect to such efforts. The Holding Company will use its best efforts to
encourage and assist a professional market maker in establishing and maintaining
a market for the Common Stock. The Common Stock meets the criteria for
quotation on the OTC Bulletin Board .

The development of an active trading market depends on the existence of
willing buyers and sellers. Due to the small size of the offering, it is highly
unlikely that an active trading market will develop and be maintained.
Purchasers of the Common Stock could have difficulty disposing of their shares
and should not view the shares as a short-term investment. Purchasers may not
be able to sell their shares at a price equal to or above the price they paid
for the shares. See "MARKET FOR COMMON STOCK."

10
<PAGE>

POTENTIAL EFFECTS OF CHANGES IN INTEREST RATES

The operations of the Savings Bank are substantially dependent on its net
interest income, which is the difference between the interest income earned on
its interest-earning assets and the interest expense paid on its
interest-bearing liabilities. Like most savings institutions, the Savings
Bank's earnings are affected by changes in market interest rates and other
economic factors beyond its control. If an institution's interest-earning
assets have longer effective maturities than its interest-bearing liabilities,
the yield on the institution's interest-earning assets generally will adjust
more slowly than the cost of its interest-bearing liabilities and, as a result,
the institution's net interest income generally would be adversely affected by
material and prolonged increases in interest rates and positively affected by
comparable declines in interest rates. The Savings Bank has sought to reduce
the vulnerability of its operations to changes in interest rates by managing the
nature and composition of its interest rate sensitive assets and liabilities.
However, at March 31, 1998, the Savings Bank's Net Portfolio Value ("NPV"),
which represents the present value of expected cash flows from assets,
liabilities and off-balance sheet contracts (if any), decreased by 5% to 33%
assuming interest rates increased by 100 to 400 basis points and decreased by
16% to 28% assuming interest rates decreased by 100 to 400 basis points.

The Savings Bank's deposits have included a relatively high amount of
certificates of deposit ("Certificates"), which are generally higher costing and
more interest-rate sensitive than "core" deposits. At March 31, 1998,
$4.8 million of the Savings Bank's $5.3 million of total deposits were comprised
of Certificates of which $2.2 million, or 45.8%, were scheduled to mature within
one year. Certificates generally are costlier and a more volatile source of
funds than savings accounts. In addition, certificates are more likely to be
invested in other instruments than are savings accounts. Notwithstanding the
foregoing, management believes that most of its certificates will remain at the
Savings Bank upon maturity. The Savings Bank does not accept brokered deposits.
See "BUSINESS OF THE SAVINGS BANK."

In addition to affecting interest income and expense, changes in interest
rates also can affect the value of the Savings Bank's interest-earning assets,
which are comprised of fixed instruments, and the ability to realize gains from
the sale of such assets. Generally, the value of fixed-rate instruments
fluctuates inversely with changes in interest rates. As of March 31, 1998,
$5.6 million or 80.1% of the Savings Bank's interest-earning assets were
fixed-rate loans. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- Asset and Liability Management."

EFFECT OF ANTI-TAKEOVER PROVISIONS IN DISCOURAGING TAKEOVER OFFERS AND CHANGES
IN MANAGEMENT

The Holding Company's certificate of incorporation and bylaws provide,
among other things, that (1) for a period of five years following the
Conversion, no person may acquire the beneficial ownership of more than 10% of
any class of equity security of the Holding Company, and no person who acquires
the beneficial ownership of more than 10% of any class of equity security of the
Holding Company may vote any shares owned in excess of 10% unless, in each case,
the acquisition has been approved by a majority of the disinterested directors
on the Board of Directors of the Holding Company; (2) the Holding Company's
Board of Directors will be divided into three classes with one class to be
elected each year; (3) special meetings of the Holding Company's stockholders
may be called only by the chairman of the Board of Directors, the president or a
majority of the Holding Company's Board of Directors; (4) the Board of Directors
may issue additional shares of authorized Common Stock and fix the terms and
designations of and issue shares of authorized preferred stock without any
further action by the stockholders; (5) approval of the holders of 80% of the
outstanding shares of voting stock must be obtained for consummation of certain
Business Transactions (as defined in the certificate of incorporation) not
approved in advance by the Board of Directors; (6) stockholders who propose to
nominate a candidate for election to the Board of Directors of the Holding
Company or to present new business at a stockholders' meeting must give advance
notice of, and furnish information relating to, the proposed nominee and
business to the Holding Company; and (7) a vote of 80% of the total votes
eligible to be cast, voting together as a single class, is required to amend,
repeal or adopt any provisions inconsistent with certain provisions of the
certificate of incorporation and the bylaws, including most of the provisions
enumerated above. See

11
<PAGE>

"RESTRICTIONS ON ACQUISITION OF THE HOLDING COMPANY -- Restrictions in
Certificate of Incorporation and Bylaws."

Such provisions are intended to encourage a potential acquiror of the
Holding Company to negotiate with the Board of Directors, which is in the best
position to act on behalf of all of the stockholders, before seeking to obtain
control of the Holding Company. Such provisions may, however, have the effect
of discouraging takeover offers that certain stockholders might deem to be in
their best interests, including takeover proposals in which stockholders might
receive a premium for their shares over the then-current market price. Such
provisions will also make it more difficult for individual stockholders or a
group of stockholders to replace existing management, whether or not such
stockholders believe that a change in management is in the best interests of the
Holding Company.

EFFECT OF VOTING CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS ON CORPORATE
GOVERNANCE

Directors and executive officers of the Savings Bank and the Holding
Company expect to purchase approximately 22,175 shares of Common Stock, or 18%
of the number of shares outstanding if 126,500 shares are sold at the maximum of
the Estimated Valuation Range. Directors and executive officers are also
expected to control 27,830 shares of Common Stock through the Employee Benefit
Plans, as more fully described below. For additional information regarding the
vesting schedules, shareholder approval requirements, proposed allocations of
stock awards and other terms of the Employee Benefit Plans, see "MANAGEMENT OF
THE HOLDING COMPANY AND SAVINGS BANK -- Employee Benefit Plans."

Following approval of the MRP at a stockholders' meeting to be held no
earlier than six months following consummation of the Conversion ("MRP
Stockholder Approval"), directors and executive officers are expected to control
the voting of 5,060 shares, or 4% of the shares of Common Stock sold in the
Conversion, as a result of stock awards expected to be granted under the MRP
(including both allocated and unallocated shares). Directors and executive
officers are also expected to be granted stock options to purchase 12,650 shares
of Common Stock, following Stock Option Plan Approval. If these options are
exercised, directors and executive officers would have voting control over an
amount of shares equal to 10% of the Holding Company's outstanding shares of
Common Stock.

Upon completion of the initial allocation of shares of Common Stock under
the ESOP, executive officers of the Savings Bank will have been allocated 36% of
the allocated shares. Under the terms of the ESOP, each participant is entitled
to vote the shares allocated to his account, and unallocated shares will be
voted by the ESOP trustee in accordance with the instructions of the
compensation committee of the Savings Bank's Board of Directors, or, in the
absence of such direction, in the same proportion as the allocated shares. The
ESOP will purchase 10,120 shares of Common Stock in the Offering. Accordingly,
the Board of Directors of the Savings Bank, through instructions to the ESOP
trustee, will initially have effective voting control over 10,120 shares of
Common Stock, or 8% of the Holding Company's outstanding Common Stock.

As a result of the proposed purchases of the Common Stock by the Board of
Directors of the Holding Company, and officers of the Savings Bank, and
purchases under the ESOP and MRP, as well as the potential acquisition of the
Common Stock under the Stock Option Plan, directors and executive officers of
the Savings Bank and the Holding Company could acquire the power to vote
50,005 shares, or 40% of total outstanding shares (including shares owned by the
ESOP and MRP). Such voting control could render it difficult to obtain majority
support for a stockholder proposal opposed by the Board of Directors of the
Holding Company and management. Moreover, such voting control could enable the
Board of Directors of the Holding Company and management to block the approval
of transactions requiring the approval of 80% of the stockholders under the
Holding Company's certificate of incorporation. See "MANAGEMENT OF THE HOLDING
COMPANY AND SAVINGS BANK -- Employee Benefit Plans" and "RESTRICTIONS ON
ACQUISITION OF THE HOLDING COMPANY."

<PAGE>

POSSIBLE DILUTIVE EFFECT OF GRANTS UNDER THE MRP AND STOCK OPTION PLAN

Subject to MRP Stockholder Approval, the MRP may purchase shares of
Common Stock totalling up to 4% of the Common Stock issued and sold in the
Conversion. Such shares may be purchased by the MRP in the open market, or if
sufficient shares are not available in the open market, the MRP may purchase
authorized but previously unissued shares from the Holding Company at the then
current market price for the Common Stock. Such shares will be issued at no
cost to the participants in the MRP. If the MRP is funded entirely through
purchases of authorized but previously unissued shares from the Holding Company,
the percentage interest of stockholders of the Holding Company at the time of
the Conversion will be diluted, at the time of such purchase, by approximately
4%.

Subject to approval of the Stock Option Plan at a stockholders' meeting
to be held no earlier than six months following consummation of the Conversion
("Stock Option Plan Stockholder Approval"), the Holding Company intends to
reserve for issuance under the Stock Option Plan authorized but previously
unissued shares of Common Stock in an amount equal to 10% of the number of
shares of Common Stock issued in the Conversion. Options to purchase such
shares will be granted to the directors, officers and employees of the Holding
Company at an exercise price equal to the fair market value per shares of the
Common Stock on the date of grant. In the event that all of the options
reserved under the Stock Option Plan are granted and exercised, the percentage
interests of stockholders of the Holding Company will be further diluted, as of
the time of such exercise, by approximately 9%.

POSSIBLE ADVERSE INCOME TAX CONSEQUENCES

The Savings Bank has received an opinion of Geo. S. Olive & Co. LLC
which states that, for federal and state income tax purposes, consummation of
the Conversion will not be taxable to the Savings Bank, the Holding Company or
depositors of the Savings Bank. However, the opinion also states that if the
Subscription Rights granted to Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are deemed to have an ascertainable fair
market value, income or gain may be recognized by the recipients of the
Subscription Rights (in certain cases, whether or not the rights are exercised)
in an amount equal to such value. Additionally, the Savings Bank could
recognize a gain for tax purposes on such distribution. Whether Subscription
Rights are considered to have ascertainable fair market value is an inherently
factual determination. The Savings Bank has received an opinion from JMP that
Subscription Rights granted to Eligible Account Holders, Supplemental Eligible
Account Holders and the Members have no ascertainable fair market value. This
statement is based upon the observation that such Subscription Rights are
available without cost, will be legally non-transferrable and of short duration,
and will provide only the right to purchase shares of Common Stock at the same
price payable by the general public if such shares are offered to the general
public. This opinion is not binding on the Internal Revenue Service ("IRS").
No assurance can be given that the IRS will not take a contrary position. See
"FEDERAL AND STATE TAXATION" and "THE CONVERSION -- Effects of Conversion -- Tax
Effects."

RISK OF DELAYED OFFERING

The Holding Company and the Savings Bank expect to complete the
Conversion on schedule and within the time periods indicated in this
Prospectus. Nevertheless, it is possible, although not anticipated, that
various factors could significantly delay completion of the Conversion. For
example, changes in market, economic or other conditions could result in a
change in the Conversion valuation which could delay completion of the
Conversion and necessitate the receipt of approvals from the Commissioner and
the FDIC for an extension of the Subscription and Community Offerings.
Subscriptions for shares of Common Stock are irrevocable, except that if the
Commissioner and the FDIC approve an extension of the Subscription and
Community Offerings beyond October 26, 1998 (or November 16, 1998, if the
Subscription Offering is fully extended), subscribers will be given the
opportunity to modify or rescind their subscriptions and to have their
subscription funds returned promptly with interest at the Savings Bank's then
current passbook rate and/or to have their withdrawal authorizations
terminated. No such extension will be permitted without the approval of the
Commissioner and the FDIC.

CGB&L FINANCIAL GROUP, INC.

13
<PAGE>

The Holding Company was organized as a Delaware corporation on May 21,
1998 at the direction of the Board of Directors of the Savings Bank to acquire
all of the capital stock to be issued by the Savings Bank in the Conversion.
The Holding Company has not engaged in any business to date and is not expected
to engage in any business until the consummation of the Conversion. The Holding
Company's offices are located at 229 E. South Street, Cerro Gordo, Illinois
61818, and its telephone number is (217) 763-2911.

The Holding Company will have no material assets or liabilities prior to
the consummation of the Conversion. Immediately following the consummation of
the Conversion, the Holding Company will have, as its only material assets, the
stock of the converted Savings Bank acquired in the Conversion and that portion
of the net proceeds of the Conversion that the Commissioner permits it to
retain. The Holding Company has received the Commissioner's approval to retain
50% of the net proceeds received in the Conversion (ranging between
approximately $340,075, if a minimum of 93,500 shares are sold in the
Conversion, and approximately $505,075, if a maximum of 126,500 shares are sold
in the Conversion), plus the amount necessary to finance the purchase of Common
Stock by the ESOP in the Conversion. The balance of the net proceeds will be
paid to the Savings Bank in exchange for all of its capital stock. The Holding
Company intends to lend to the ESOP an amount sufficient to finance the purchase
of up to 8% of the Common Stock issued in the Conversion and, at least
initially, to invest the remainder of the proceeds in securities of the kind in
which the Savings Bank currently invests. The Holding Company may also use its
capital to repurchase its stock or pay dividends, if and as permitted under the
regulations of the Federal Reserve Board, the Commissioner and the FDIC. See
"DIVIDEND POLICY" and "THE CONVERSION -- Restrictions on Repurchases of Common
Stock." Immediately following the Conversion, the Holding Company will have no
material liabilities.

Following the Conversion, the Holding Company will be engaged in the
business of directing, planning and coordinating the business activities of the
Savings Bank. The Holding Company does not currently intend to change but does
intend to expand the products and services offered by the Savings Bank. In the
future, the Holding Company may acquire or organize other operating
subsidiaries, although there are no current plans, arrangements, agreements or
understandings to do so.

The Federal Reserve Board has approved the Holding Company's application
to become a bank holding company under the Bank Holding Company Act of 1956, as
amended (the "BHCA"), and to acquire the Savings Bank. It has also received
approval from the Commissioner of its application to become a savings bank
holding company and to acquire the Savings Bank. Upon completion of the
Conversion, the Holding Company will be subject to regulation by both the
Federal Reserve Board and the Commissioner. See "SUPERVISION AND REGULATION --
The Holding Company." Under certain circumstances, the Board of Directors of
the Savings Bank may decide not to use the holding company form of organization
in the Conversion. See "THE CONVERSION -- General."

CERRO GORDO BUILDING AND LOAN, S.B.

The Savings Bank is an Illinois-chartered mutual savings bank regulated
by the Commissioner, and its deposits are insured by the FDIC through the SAIF.
The deposits of the Savings Bank will continue to be insured by the FDIC after
the Conversion. The Savings Bank was originally chartered in 1886 as a
state-chartered savings and loan association and converted to a state-chartered
savings bank on December 31, 1992 under its current name of Cerro Gordo Building
and Loan, s.b. At March 31, 1998, the Savings Bank had total assets of
$6.9 million, total deposits of $5.3 million, retained earnings of $873 thousand
and total equity capital of $986 thousand. The Savings Bank conducts it
business through its office located at 229 E. South Street, Cerro Gordo,
Illinois 61818, and its telephone number is (217) 763-2911.

The Savings Bank is located in the Village of Cerro Gordo, in the county
of Piatt, Illinois, in the central part of the state. The Savings Bank's
deposit and lending base is presently concentrated within a ten-mile radius of
Cerro Gordo, Illinois. This area includes portions of the Illinois counties of
Macon, Moultrie and Piatt. Cerro Gordo has a population of approximately 1,500.
The primary employers located in and around Cerro Gordo include the Cerro

14
<PAGE>

Gordo School District, Caterpillar, Inc., Archer Daniels Midland and
Bridgestone/Firestone, Inc. Management believes that Cerro Gordo's economy has
been stable in recent years.

The Savings Bank provides its customers with a range of community
banking services. The Savings Bank is primarily engaged in the business of
attracting deposits from the general public and using such deposits to invest in
one- to four-family residential mortgage loans and, to a lesser extent, consumer
(share), multi-family residential, and commercial real estate loans. The Board
of Directors has been evaluating the Savings Bank's historical operations with a
view to improving the Savings Bank's future earnings prospects and growth
opportunities. The Conversion is an integral step in achieving these
objectives.

HISTORICAL OPERATIONS. The Savings Bank's assets totalled $6.9 million
at March 31, 1998. The percentage of the Savings Bank's assets invested in
loans has increased for the past five years. The loan portfolio has increased
by $1.6 million, or 40%, from $4.0 million at April 30, 1993 to $5.6 million at
March 31, 1998. At March 31, 1998, the Savings Bank had cash and cash
equivalents of $525 thousand, which accounted for 7.6% of the Savings Bank's
total assets. For the periods ended March 31, 1998 and 1997, the Savings Bank
had interest income from deposits with financial institutions of $70,915 and
$82,277, respectively, representing 13.1% and 17.7%, of total interest income,
respectively.

The Savings Bank's historical lending strategy has focused on the
origination of residential mortgage loans secured by one- to four-family homes,
and, to a lesser extent, on the origination of consumer (share), multi-family
residential and commercial real estate loans. See "BUSINESS OF THE SAVINGS
BANK -- Lending Activities."

The Savings Bank offers traditional products, including passbook and
certificates of deposit. The Savings Bank's deposits have decreased
$58 thousand, or 1.1%, between March 31, 1997 and March 31, 1998. At March 31,
1998, the Savings Bank had certificates of deposits totalling $4.8 million,
representing 90.6% of the Savings Bank's total deposits, with maturities ranging
up to five years.

At March 31, 1998, the Savings Bank had $873 thousand of retained
earnings, or 12.6% of total assets and total equity capital of $986 thousand,
and exceeded all of its minimum regulatory capital requirements. At March 31,
1998, the Savings Bank's Tier 1 capital and total risk-based capital to
applicable assets were 12.6% and 28.6%, respectively. See "SUPERVISION AND
REGULATION -- The Savings Bank -- Capital Requirements." Management attributes
its strong capital position to its focus on loans secured by residential
properties and a conservative lending philosophy on other loans. As a result of
the Conversion and assuming the Holding Company retains 50% of the net proceeds
of the Conversion at the midpoint of the Estimated Valuation Range plus an
amount sufficient to fund the ESOP, the Savings Bank will have pro forma
stockholders' equity of approximately $1.3 million, or 17.6% of total pro forma
assets.

USE OF PROCEEDS

The Commissioner has granted the Holding Company approval to retain 50%
of the net Conversion proceeds, plus the amount necessary to fund the ESOP. The
balance of the net proceeds will be paid to the Savings Bank in exchange for all
of its capital stock. Assuming that the Conversion is consummated at the
midpoint of the Estimated Valuation Range, (i) the Savings Bank will receive
approximately $334,575 or 40% of the net proceeds of the Offering in exchange
for all of its issued and outstanding capital stock, and (ii) the Holding
Company will retain approximately $510,575 or 60% of the net proceeds, out of
which the Holding Company will make a loan to the Savings Bank's ESOP in the
amount of $88,000 (assuming the midpoint of the Estimated Valuation Range). The
ESOP will repay such loan from the Holding Company with contributions made to
the ESOP by the Savings Bank and any dividends

15
<PAGE>

on the Common Stock held by the ESOP. The loan will require annual interest and
principal payments over a ten-year period and will bear interest at a rate of
8%.

The Holding Company intends to invest the net proceeds of the Offering
which it retains in securities of the kind in which the Savings Bank invests.
The proceeds of the Offering may be used for additional contributions to the
Savings Bank in the form of debt or equity, for possible future acquisitions and
diversification activities, and for future dividends on, and repurchases of,
Common Stock, as and if permitted by the Federal Reserve Board, the Commissioner
and the FDIC. The Holding Company does not currently anticipate any tax-free
return of capital. See "DIVIDEND POLICY" and "THE CONVERSION -- Restrictions on
Repurchases of Common Stock;" see also "RISK FACTORS -- Competition." The
Holding Company has no specific plans, arrangements, agreements or
understandings with respect to any acquisitions, diversification activities,
return of capital or repurchases of Common Stock.

DIVIDEND POLICY

Following the Conversion, the Holding Company currently expects to pay
semi-annual cash dividends on the Common Stock at an initial aggregate annual
rate of approximately $.20 per share (a semi-annual rate of $.10 per share), or
2% annually based upon the initial offering price of $10.00, with the first
dividend being declared and paid following fiscal year end 1999 and every six
months thereafter. Payment of dividends will be subject to determination and
declaration by the Holding Company's Board of Directors. In determining whether
or not to declare or pay dividends and the amount of such dividends, if any, the
Board of Directors of the Holding Company will take into account such factors as
the Holding Company's financial condition, results of operations, tax
considerations, capital requirements, industry standards, economic conditions
and regulatory restrictions affecting the payment of dividends by the Savings
Bank to the Holding Company, as discussed below. There can be no assurance that
dividends will in fact be paid on the Common Stock or that such dividends, if
paid, will not be reduced or eliminated in future periods.

Following the Conversion, the Holding Company initially will have no
source of income other than earnings from the investment of the net proceeds of
the Conversion it retains, receipt of principal and interest payments on the
loan to the ESOP, and dividends from the Savings Bank. Under the Illinois
Savings Bank Act (the "ISBA") and applicable regulations of the Commissioner,
the Savings Bank will generally be permitted to pay dividends to the Holding
Company in an amount equal to its net profits in any fiscal year, or in the
event the Savings Bank's total capital is less than 6% of total assets, 50% of
net profits, without the prior approval of the Commissioner, provided that the
Savings Bank is in compliance with its regulatory capital requirements, both
before and after the payment of such dividend, and the payment of such dividend
would not reduce the regulatory capital of the Savings Bank below the amount
required by the FDIC or the Commissioner or the amount of the liquidation
account required to be maintained by the Savings Bank following the Conversion.
See "SUPERVISION AND REGULATION -- The Savings Bank -- Dividends;" and "THE
CONVERSION -- Effects of Conversion -- Liquidation Rights." The Savings Bank
had net profits of $41,872 in the fiscal year ended March 31, 1998. Under the
applicable regulations, the Savings Bank could have paid dividends totaling
$41,872 in 1998 without the written approval of the Commissioner.

In addition to the foregoing, earnings of the Savings Bank appropriated
to bad debt reserves and deducted for federal income tax purposes cannot be used
by the Savings Bank to pay cash dividends to the Holding Company without the
payment of federal income taxes by the Savings Bank at the then current income
tax rate on the amount deemed distributed. See "FEDERAL AND STATE TAXATION --
Federal Taxation -- Distributions." The Holding Company does not contemplate
any distribution by the Savings Bank that would result in a recapture of the
Savings Bank's bad debt reserve or create such federal tax liabilities.

MARKET FOR COMMON STOCK

16
<PAGE>

As a newly organized company, the Holding Company has never issued
capital stock, and consequently there is no established market for the Common
Stock. Following the completion of the Subscription and Community Offerings, it
is anticipated that the Common Stock (symbol: CGBL) will be traded on
the over-the-counter market with quotations available through the OTC Bulletin
Board. Trident is expected to make a market in the Common Stock by developing
and maintaining historical stock trading records, soliciting potential buyers
and sellers and attempting to match buy and sell orders. In connection with its
market making activities, Trident may buy or sell shares from time to time for
its own account. However, Trident will not be subject to any obligation with
respect to such efforts. The Holding Company will use its best efforts to
encourage and assist a professional market maker in establishing and maintaining
a market for the Common Stock. The Common Stock meets the criteria for
quotation on the OTC Bulletin Board .

Liquidity for shares of stock is measured by the number of willing
buyers and sellers for the stock, the frequency of trades in the stock and the
volume of shares traded when trades do occur. The smaller the number of holders
of the stock, the less likely a liquid market will develop. The Holding Company
is offering from 93,500 to 126,500 shares of Common Stock in the Offerings at
$10.00 per share, with a resulting anticipated market capitalization ranging
from $935,000 to $1,265,000. A substantial amount of such stock is expected to
be held by the directors, executive officers and Employee Benefit Plans. See
"THE OFFERING -- Subscriptions by Directors and Executive Officers." The
Holding Company is unable to predict, at this time, how widely the remaining
shares will be held.

CAPITALIZATION

The following table represents the capitalization, including deposits,
of the Savings Bank as of March 31, 1998, adjustments as a result of the
Conversion, and the pro forma consolidated capitalization of the Holding Company
at that date, after giving effect to the Plan of Conversion.

PRO FORMA CONSOLIDATED CAPITALIZATION
OF THE HOLDING COMPANY
BASED UPON THE SALE OF SHARES AT $10.00 PER SHARE
-------------------------------------------------------------------------------------------
ADJUSTED
THE SAVINGS MINIMUM MIDPOINT MAXIMUM MAXIMUM
BANK, HISTORICAL 93,500 110,000 126,500 145,475
AT MARCH 31, 1998 SHARES SHARES SHARES SHARES(1)
----------------- ------ ------ ------ --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Deposits(2). . . . . . . . . . . $5,250 $5,250 $5,250 $5,250 $5,250

Long term debt 600 600 600 600 600

Total deposits and borrowings $5,850 $5,850 $5,850 $5,850 $5,850
------ ------ ------ ------ -------
------ ------ ------ ------ -------

Stockholders' equity:
Preferred Stock:
100,000 shares, $.01 par
value per share, authorized;
none issued or outstanding $ - $ - $ - $ - $ -

17
<PAGE>

Common Stock:
900,000 shares, $.01 par
value per share, authorized;
specified number of shares
assumed to be issued and
outstanding . . . . . . . . . - 9 11 13 15

Additional paid-in capital - 670 834 997 1,184

Common Stock acquired by
ESOP(3) . . . . . . . . . . . . (75) (88) (101) (116)
Common Stock acquired by
MRP(4) . . . . . . . . . . . . (37) (44) (51) (58)

Retained earnings(5) 873 873 873 873 873
Net unrealized gain on
securities available for sale . 113 113 113 113 113
------ ------ ------ ------ -------

Total stockholders' equity. . . $ 986 $1,554 $1,699 $1,844 $2,011
------ ------ ------ ------ -------
------ ------ ------ ------ -------
</TABLE>
- ---------------------

(1) Gives effect to the sale of an additional 18,975 shares in the
Conversion, which may be issued to cover additional subscriptions, based on a
determination by JMP that such issuance is compatible with its determination of
an increase in the appraised pro forma market value of the Common Stock. See
"THE CONVERSION -- Stock Pricing and Number of Shares to be Issued."

(2) Withdrawals from deposit accounts for the purchase of Common Stock are
not reflected. Such withdrawals will reduce pro forma deposits by the amounts
thereof.

(3) Assumes that the ESOP will purchase 8% of the Common Stock sold in the
Conversion with funds to be borrowed from the Holding Company. The amount
borrowed by the ESOP is reflected as a reduction to stockholders' equity. Since
the Holding Company will finance the ESOP debt, the ESOP debt will be eliminated
through consolidation, and no liability will be reflected on the Holding
Company's Consolidated Financial Statements. The amount of Common Stock to be
purchased by the ESOP represents unearned compensation and is, accordingly,
reflected as a reduction to pro forma stockholders' equity. The Savings Bank
expects to make discretionary contributions to the ESOP in an amount at lest
equal to the principal and interest payments on the ESOP debt. As such payments
are made, a corresponding reduction in the charge against stockholders' equity
will occur. See "MANAGEMENT OF THE HOLDING COMPANY AND SAVINGS BANK -- Employee
Benefit Plans -- Employee Stock Ownership Plan." For a discussion of recent
accounting developments involving ESOPs, see "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Impact of New
Accounting Pronouncements."

(4) Assumes that an amount of stock equal to 4% of the Common Stock sold in
the Conversion will be purchased by the Holding Company's MRP with funds
contributed to the MRP by the Holding Company no sooner than six months after
completion of the Conversion. In accordance with GAAP, the amount of Common
Stock to be purchased by the MRP will represent unearned compensation and will,
accordingly, be reflected as a reduction to stockholders' equity in future
periods. As shares of Common Stock granted to officers and directors of the
Savings Bank vest, a corresponding reduction in the charge against stockholders'
equity will occur.

(5) Retained earnings of the Savings Bank are restricted by the minimum
capital requirements of the Commissioner and the FDIC and will be restricted by
the liquidation account to be established upon Conversion. See "SUPERVISION AND
REGULATION;" "THE CONVERSION -- Effects of Conversion -- Liquidation Rights" and
Notes to Financial Statements included elsewhere herein. Retained earnings do
not reflect the impact of the recapture of the bad debt reserve in the unlikely
event of liquidation.

HISTORICAL AND PRO FORMA CAPITAL COMPLIANCE

The following table presents the Savings Bank's historical and pro forma
capital position relative to its capital requirements at March 31, 1998. The
amount of capital infused into the Savings Bank for purposes of the following
table is 50% of the net Conversion proceeds. For purposes of the following
table, the amount expected to be borrowed by the ESOP and the cost of the shares
expected to be acquired by the MRP are deducted from pro forma regulatory
capital, also see "USE OF PROCEEDS," "CAPITALIZATION" and "PRO FORMA DATA." The
definitions of the terms used in the table are those provided in the capital
regulations issued by the FDIC. For a

18
<PAGE>

discussion of the capital standards applicable to the Savings Bank, see
"SUPERVISION AND REGULATION -- The Savings Bank -- Capital Requirements."

19
<PAGE>

<TABLE>
<CAPTION>
PRO FORMA AT MARCH 31, 1998
---------------------------------------------

MINIMUM OF ESTIMATED MIDPOINT OF ESTIMATED
VALUATION RANGE VALUATION RANGE
----------------------- -----------------------
HISTORICAL 93,500 SHARES 110,000 SHARES
AT MARCH 31, 1998 AT $10.00 PER SHARE AT $10.00 PER SHARE
----------------------- ----------------------- ------------------------
PERCENT OF PERCENT OF PERCENT OF
ADJUSTED ADJUSTED ADJUSTED
TOTAL TOTAL TOTAL
AMOUNT ASSETS AMOUNT ASSETS AMOUNT ASSETS
------ ------ ------ ------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
The Savings Bank:

GAAP capital . . . . . . . . . . . . . $986 14.2% $1,214 16.9% $1,277 17.6%
------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ -----
Tier 1 capital $873 27.5% $1,101 34.2% $1,164 36.1

Tier 1 capital to risk weighted assets
requirement. . . . . . . . . . . . . . 127 4.0 129 4.0 129 4.0
------ ------ ------ ------ ------ -----

Excess . . . . . . . . . . . . . . . . $746 23.5% $972 30.2% $1,035 32.1
------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ -----
Tier 1 capital . . . . . . . . . . . . $873 12.6% $1,101 15.3% $1,164 16.1%

Tier 1 capital to average total assets
requirement. . . . . . . . . . . . . . 278 4.0 287 4.0 290 4.0
------ ------ ------ ------ ------ -----
Excess . . . . . . . . . . . . . . . . $595 8.6% $814 11.3% $874 12.1%
------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ -----
Risk-based capital . . . . . . . . . . $906 28.6% $1,134 35.3% $1,197 37.1%

Risk-based capital requirement . . . . 254 8.0 257 8.0 258 8.0
------ ------ ------ ------ ------ -----
Excess . . . . . . . . . . . . . . . . $652 21.6% $877 27.3% $939 29.1%
------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ -----
Average Total Assets . . . . . . . . . $6,957 $7,185 $7,248

Total risk-weighted assets(1). . . . . 3,170 3,216 3,228
</TABLE>

PRO FORMA AT MARCH 31, 1998
------------------------------------------------------------------------------
15% above
MAXIMUM OF ESTIMATED Maximum of Estimated
VALUATION RANGE Valuation Range
--------------------------------- ----------------------------------
126,500 SHARES 145,475 Shares
AT $10.00 PER SHARE at $10.00 Per Share
--------------------------------- ----------------------------------
PERCENT OF PERCENT OF
ADJUSTED ADJUSTED
TOTAL TOTAL
AMOUNT ASSETS AMOUNT ASSETS
------ ------ ------ ------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C>
The Savings Bank:

GAAP capital . . . . . . . . . . . . . $1,339 18.3% $1,412 19.1%
------ ------ ------- ------
------ ------ ------- ------
Tier 1 capital 1,226 37.8 1,299 39.9

Tier 1 capital to risk weighted assets
requirement. . . . . . . . . . . . . . 130 4.0 130 4.0
------ ------ ------- ------

Excess . . . . . . . . . . . . . . . . 1,096 33.8 1,169 35.9
------ ------ ------- ------
------ ------ ------- ------
Tier 1 capital . . . . . . . . . . . . $1,226 16.8% $1,299 17.6%

Tier 1 capital to average total assets
requirement. . . . . . . . . . . . . . 292 4.0 295 4.0
------ ------ ------- ------
Excess . . . . . . . . . . . . . . . . $934 12.8% $1,006 13.6%
------ ------ ------- ------
------ ------ ------- ------
Risk-based capital . . . . . . . . . . $1,259 38.8% $1,332 40.9%

Risk-based capital requirement . . . . 259 8.0 260 8.0
------ ------ ------- ------
Excess . . . . . . . . . . . . . . . . $1,000 30.8% $1,073 32.9%
------ ------ ------- ------
------ ------ ------- ------
Average Total Assets . . . . . . . . . $7,310 $7,383

Total risk-weighted assets(1). . . . . 3,241 3,255
</TABLE>
- -----------------------------

(1) Assumes that the Conversion proceeds infused into the Savings Bank are
invested in assets with a risk weighting of 20%.

<PAGE>
PRO FORMA DATA

The actual net proceeds from the sale of the Common Stock cannot be
determined until the Conversion is completed. However, net proceeds are
currently estimated to be between $680,150 and $1,010,150 (or $1,199,900 in the
event the Estimated Valuation Range is increased by 15%) based upon the
following assumptions: (i) 100% of the shares of Common Stock will be sold in
the Subscription Offering and Community Offerings; and (ii) fixed Conversion
expenses will be approximately $254,850. Actual Conversion expenses may vary
from those estimated.

Pro forma net income and stockholders' equity have been calculated for
the year ended March 31, 1998 as if the Common Stock to be issued in the
Offerings had been sold at the beginning of the year and the net proceeds had
been invested at 5.03%, which represents the yield on one-year U.S. Government
securities at March 31, 1998. The use of this interest rate is viewed to be
more relevant in the current rate environment than the use of an arithmetic
average of the weighted average yield earned by the Savings Bank on its
interest-earning assets and the weighted average rate paid on its deposits
during such periods (as required by federal regulations). The effect of
withdrawals from deposit accounts for the purchase of Common Stock has not been
reflected. A combined effective federal and state income tax rate of 31%
(exclusive of any franchise tax) has been assumed for the year, resulting in an
after-tax yield of 3.47% during the year ended March 31, 1998. Historical and
pro forma per share amounts have been calculated by dividing historical
pro forma amounts by the indicated number of shares of Common Stock, as adjusted
to give effect to the shares committed to be released during the period by the
ESOP, with respect to the net income per share calculations. See the
footnotes to the Pro Forma Data tables. No effect has been given in the
pro forma stockholders' equity calculations for the assumed earnings on the net
proceeds. As discussed under "Use of Proceeds," the Holding Company intends to
retain 50% of the net Conversion proceeds, plus the amount necessary to make a
loan directly to the ESOP to enable the ESOP to purchase up to 8.0% of the
Common Stock in the Conversion.

The following pro forma information may not be representative of the
financial effects of the foregoing transactions at the dates on which such
transactions actually occur and should not be taken as indicative of future
results of operations. Pro forma stockholders' equity represents the difference
between the stated amount of assets and liabilities of the Holding Company
computed in accordance with generally accepted accounting principles ("GAAP").
The pro forma stockholders' equity is not intended to represent the fair market
value of the Common Stock and may be different than amounts that would be
available for distribution to stockholders in the event of liquidation. No
effect has been given in the tables to the possible issuance of additional
shares equal to 10% of the Common Stock to be reserved for future issuance
pursuant to the Stock Option Plan to be adopted by the Board of Directors of the
Holding Company, nor does book value give any effect to the liquidation account
to be established for the benefit of Eligible Account Holders and Supplemental
Eligible Account Holders or to the bad debt reserve. See "MANAGEMENT OF THE
HOLDING COMPANY AND SAVINGS BANK -- Employee Benefit Plans -- Stock Option Plan"
and "THE CONVERSION -- Liquidation Rights" and "FEDERAL AND STATE TAXATION."
The tables below give effect to the MRP, which is expected to be presented
(together with the Stock Option Plan) to stockholders for approval at a meeting
of stockholders which is expected to be held not earlier than six months
following completion of the Conversion. If the MRP is approved by stockholders,
the MRP intends to acquire an amount of Common Stock equal to 4% of the shares
of Common Stock issued in the Conversion, either through open market purchases
or from authorized but unissued shares of Common Stock. The tables below assume
that stockholder approval has been obtained and that the shares acquired by the
MRP are purchased in the open market at $10.00 per share. There can be no
assurance that stockholder approval of the MRP will be obtained, that the shares
will be purchased in the open market, or that the purchase price will be $10.00
per share.

The following tables summarize historical consolidated data of the
Savings Bank and pro forma data of the Holding Company at the year ended
March 31, 1998 based on assumptions set forth above and in the tables and should
not be used as a basis for projections of market value of the Common Stock
following the Conversion.

<PAGE>

<TABLE>
<CAPTION>
AT OR FOR THE FISCAL YEAR ENDED MARCH 31, 1998
--------------------------------------------------------------------------------
15% ABOVE
MINIMUM OF MIDPOINT OF MAXIMUM OF MAXIMUM OF
ESTIMATED ESTIMATED ESTIMATED ESTIMATED
VALUATION RANGE VALUATION RANGE VALUATION RANGE VALUATION RANGE
--------------- --------------- --------------- ---------------
93,500 110,000 126,500 145,475
SHARES AT $10.00 SHARES AT $10.00 SHARES AT $10.00 SHARES AT $10.00
PER SHARE PER SHARE PER SHARE PER SHARE(1)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Gross proceeds $935,000 $1,100,000 $1,265,000 $1,454,000
Less: Estimated offering expenses 254,850 254,850 254,850 254,850
-------- --------- --------- ---------
Estimated net proceeds 680,150 845,150 1,010,150 1,199,900

Less: Proceeds to fund ESOP (74,800) (88,000) (101,200) (116,380)

Proceeds to fund MRP (37,400) (44,000) (50,600) (58,190)
-------- --------- --------- ---------
Estimated investable net proceeds(1) $567,950 $713,150 $858,350 $1,025,330
-------- --------- --------- ---------
-------- --------- --------- ---------
Net income:

Historical. . . . . . . . . . . . . . . $41,872 $41,872 $41,872 $41,872

Pro forma income on investable
net proceeds. . . . . . . . . . . . . 19,712 24,751 29,791 35,586

Pro forma ESOP adjustments(2) . . . . . (5,161) (6,072) (6,983) (8,030)

Pro forma MRP adjustments(3). . . . . . (5,161) (6,072) (6,983) (8,030)
-------- --------- --------- ---------
Pro forma net income. . . . . . . . . . $51,262 $54,479 $57,697 $61,398
-------- --------- --------- ---------
-------- --------- --------- ---------
Net income per share:(4)

Historical. . . . . . . . . . . . . . . $0.48 $0.41 $0.36 $0.31

Pro forma income on investable
net proceeds(1) . . . . . . . . . . . 0.23 0.24 0.25 0.26

Pro forma ESOP adjustments(2) . . . . . (0.06) (0.06) (0.06) (0.06)

Pro forma MRP adjustments(3). . . . . . (0.06) (0.06) (0.06) (0.06)
-------- --------- --------- ---------
Pro forma basic net income per share $0.59 $0.53 $0.49 $0.45
-------- --------- --------- ---------
-------- --------- --------- ---------
Number of shares used in earnings per
share calculations(4) . . . . . . . . . 86,768 102,080 117,645 135,292

Stockholders' equity:(3)(4)
Historical. . . . . . . . . . . . . . . $986,014 $986,014 $986,014 $986,014

Estimated net proceeds. . . . . . . . . 680,150 845,150 1,010,150 1,199,900

Less: Common stock acquired by ESOP(2) (74,800) (88,000) (101,200) (116,380)

Less: Common stock acquired by MRP(3) (37,400) (44,000) (50,600) (58,190)
-------- --------- --------- ---------
Pro forma stockholders' equity(6) . . . $1,553,964 $1,699,164 $1,844,364 $2,011,344
-------- --------- --------- ---------
-------- --------- --------- ---------
</TABLE>

<PAGE>

AT OR FOR THE FISCAL YEAR ENDED MARCH 31, 1998
---------------------------------------------------------------------------------

15% ABOVE
MINIMUM OF MIDPOINT OF MAXIMUM OF MAXIMUM OF
ESTIMATED ESTIMATED ESTIMATED ESTIMATED
VALUATION RANGE VALUATION RANGE VALUATION RANGE VALUATION RANGE
--------------- --------------- --------------- ---------------
93,500 110,000 126,500 145,475
SHARES AT $10.00 SHARES AT $10.00 SHARES AT $10.00 SHARES AT $10.00
PER SHARE PER SHARE PER SHARE PER SHARE(1)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Consolidated stockholders' equity per
share:(2)

Historical. . . . . . . . . . . . . . . $10.55 $8.96 $7.79 $6.78

Estimated net proceeds . . . . . . . . 7.27 7.68 7.99 8.25
Less: Common stock acquired by ESOP(2) (0.80) (0.80) (0.80) (0.80)

Less: Common stock acquired by MRP(3) (0.40) (0.40) (0.40) (0.40)
----- ----- ----- -----
Pro forma consolidated
stockholders' equity per share(3)(5)(6) $16.62 $15.44 $14.58 $13.83
----- ----- ----- -----
----- ----- ----- -----
Offering price as a percentage of pro
forma stockholders' equity per share(7) 60.17% 64.77% 68.59% 72.31%

Ratio of offering price to pro forma net
income per share . . . . . . . . . . . 16.95x 18.87x 20.00x 21.28x
</TABLE>
- -------------------

(1) Estimated adjusted net proceeds consist of the estimated net Conversion
proceeds, minus (i) the proceeds attributable to the purchase by the ESOP and
(ii) the value of the shares to be purchased by the MRP, subject to stockholder
approval, after the Conversion at an assumed price of $10.00 per share.

(2) It is assumed that 8% of the shares of Common Stock issued in the
Conversion will be purchased by the ESOP. For purposes of this table, the funds
used to acquire such shares are assumed to have been borrowed by the ESOP from
the Holding Company. The Savings Bank intends to make annual contributions to
the ESOP over a ten-year period in an amount at least equal to the principal and
interest requirement (which interest rate shall be 8%) of the debt. The
pro forma net income assumes (i) that the ESOP expense for each respective
period is equivalent to the principal payment for the respective period and was
made at the end of each respective period; (ii) that 748, 880, 1,265 and
1,455 shares were committed to be released with respect to the year ended
March 31, 1998, at the minimum, midpoint, maximum and 15% above the maximum of
the Estimated Valuation Range, respectively; and (iii) in accordance with
SOP 93-6, only the ESOP shares committed to be released during the respective
period were considered outstanding for purposes of the net income per share
calculations.

(3) The adjustment is based upon the assumed purchases by the MRP of 3,740,
4,400, 5,060 and 5,819 shares at the minimum, midpoint, maximum and 15% above
the maximum of the Estimated Valuation Range, assuming that: (i) stockholder
approval of the MRP has been received; (ii) the shares were acquired by the MRP
at the beginning of the period in open market purchases at the Purchase Price;
and (iii) the amortized expense for the year ended March 31, 1998 was 20% of the
amount contributed. If the MRP purchases authorized but unissued shares instead
of making open market purchases, the voting interests of existing stockholders
would be diluted by approximately 3.9% and pro forma net income per share for
the year ended March 31, 1998 would be $0.58, $0.53, $0.50 and $0.46, and
pro forma stockholders' equity per share at March 31, 1998 would be $16.37,
$15.24, $14.40 and $13.68, at the minimum, midpoint, maximum and 15% above the
maximum of the Estimated Valuation Range, respectively.

(4) Net income per share computations are determined by taking the number of
shares assumed to be sold in the Conversion and, in accordance with SOP 93-6,
subtracting the ESOP shares which have not been committed for release during the
respective period. See Note 2 above.

(5) No effect has been given to the issuance of additional shares of Common
Stock pursuant to the Stock Option Plan. If the Stock Option Plan is approved
by stockholders, an amount equal to 10% of the Common Stock issued in the
Conversion, or 9,350, 11,100, 12,650 and 14,548 shares at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Valuation Range,
respectively, will be reserved for future issuance upon the exercise of options
to be granted under the Stock Option Plan. The issuance of Common Stock
pursuant to the exercise of options under such plan will result in the dilution
of existing stockholders' interests. Assuming stockholder approval of the Stock
Option Plan, that all the options were exercised at the end of the period at an
exercise price of $10.00 per share, and that the MRP purchases shares in the
open market at the Purchase Price, pro forma net income per share for the year
ended March 31, 1998 would be $0.57, $0.52, $0.48 and $0.44, and

<PAGE>

pro forma stockholders' equity per share at March 31, 1998 would be $16.02,
$14.95, $14.16 and $13.48, in each case, at the minimum, midpoint, maximum and
15% above the maximum of the Estimated Valuation Range, respectively.

(6) The retained earnings of the Savings Bank will be substantially
restricted after the Conversion. See "DIVIDEND POLICY" and "THE CONVERSION --
Liquidation Rights."

(7) Based on the number of shares sold in the Conversion.

THE OFFERINGS

OFFERING OF COMMON STOCK

As part of the Conversion, the Holding Company is offering up to
126,500 shares of Common Stock at the Purchase Price of $10.00 per share in the
Offerings. Non-transferable rights to subscribe for the Common Stock in the
Subscription Offering have been granted to the following persons in the
following order of priority: (1) Eligible Account Holders (depositors with
aggregate account balances of $50 or more on deposit at the Savings Bank as of
December 31, 1996), (2) the ESOP, (3) Supplemental Eligible Account Holders
(depositors with aggregate account balances of $50 or more on deposit at the
Savings Bank as of June 30, 1998, excluding directors and officers of the
Savings Bank and their associates), and (4) Other Members (depositors who are
not Eligible Account Holders or Supplemental Eligible Holders and who continue
to be depositors as of August 7, 1998, the voting record date). Subject to
the prior rights of holders of Subscription Rights, the Holding Company may
subsequently offer shares of Common Stock in the Community Offering to members
of the general public to whom this Prospectus and an Order Form are delivered
with preference to natural persons residing in the Illinois county of Piatt. In
the event of an oversubscription in the Subscription and Community Offerings, up
to 18,975 additional shares may be issued to reflect changes in market and
financial conditions and to cover additional subscriptions. The Holding Company
may reject, in whole or in part, orders received in the Community Offering in it
sole discretion.

SUBSCRIPTION AND COMMUNITY OFFERINGS

THE SUBSCRIPTION OFFERING AND SUBSCRIPTION RIGHTS IN THE SUBSCRIPTION
OFFERING WILL EXPIRE AT 12:00 NOON, CERRO GORDO, ILLINOIS TIME, ON September
9, 1998 (THE "SUBSCRIPTION EXPIRATION TIME"), UNLESS EXTENDED. THE
SUBSCRIPTION EXPIRATION TIME MAYBE EXTENDED UNTIL OCTOBER 1, 1998, WITH THE
APPROVAL OF THE COMMISSIONERAND THE FDIC, IF REQUIRED. THE COMMUNITY
OFFERING, IF ANY, IS EXPECTED TO COMMENCE IMMEDIATELY AFTER THE SUBSCRIPTION
EXPIRATION TIME AND MAY TERMINATE ON ANY DAY AFTER THE SUBSCRIPTION
EXPIRATION TIME AT THE DISCRETION OF THE SAVINGS BANK WITHOUT PRIOR NOTICE,
BUT NOT LATER THAN OCTOBER 26, 1998 (or November 16, 1998, if the
Subscription Offering is fully extended, UNLESS EXTENDED WITH THE
APPROVAL OF THE COMMISSIONER.

Orders for shares of Common Stock will not be filled until at least
93,500 shares of Common Stock have been subscribed for and sold. If the sale
of the Common Stock is not completed by October 26, 1998 (or November 16,
1998, if the Subscription Offering is fully extended), and the Commissioner
consents to an extension of time to complete the Conversion, subscribers will
be given the right to increase, decrease or rescind their subscriptions. In
such an event, unless an affirmative indication is received from a subscriber
that such subscriber wishes to continue to subscribe for shares, the funds
delivered by such subscriber with his or her Order Form will be returned
promptly, together with accrued interest at not less than the Savings Bank's
then current passbook rate from the date payment is received until the funds
are returned to the subscribers and all withdrawal authorizations will be
cancelled. If such period is extended, or, in any event, if the Conversion
is not completed by October 26, 1998 (or November 16, 1998, if the
Subscription Offering is fully extended), all withdrawal authorizations will
be terminated and all funds held will be promptly returned together with
accrued interest from the date payment is received until the Conversion is
terminated.

Subscription Rights may only be exercised by completion of an Order
Form. Any person receiving an Order Form who desires to subscribe for shares of
Common Stock must do so prior to the Subscription Expiration Time by delivering
(by mail or in person) to the Savings Bank's office a properly executed and
completed Order Form, together with full payment of $10.00 per share for each
share for which subscription is made. All Subscription Rights will expire at
the Subscription Expiration Time.

<PAGE>

Subscription Rights may be exercised only by the person to whom they are
issued and only for his or her own account. SUBSCRIPTION RIGHTS ARE
NON-TRANSFERABLE. PERSONS FOUND TO BE TRANSFERRING SUBSCRIPTION RIGHTS WILL BE
SUBJECT TO FORFEITURE OF SUCH RIGHTS AND POSSIBLE FURTHER SANCTIONS AND
PENALTIES IMPOSED BY THE COMMISSIONER OR THE FDIC. Each person subscribing for
shares is required to represent that he is purchasing such shares for his own
account and that he has no agreement or understanding with any other person for
the sale or transfer of such shares.

In the event Order Forms (i) are not delivered or are returned to the
Savings Bank or the Holding Company as undeliverable by the United States Postal
Service, (ii) are received after the Subscription Expiration Time, (iii) are
defectively filled out or executed, or (iv) are not accompanied by the full
required payment for the shares subscribed for (including instances where a
deposit account or other account from which withdrawal is authorized is
insufficient to fund the amount of such required payment), the Subscription
Rights of the persons to whom such rights have been granted will lapse. The
Savings Bank and Holding Company may waive any irregularity on any Order Form or
require the submission of corrected Order Forms, but do not represent that they
will do so. Pursuant to the Plan, the interpretation by the Savings Bank and
the Holding Company of the terms and conditions of the Plan and of the Order
Form will be final. AN EXECUTED ORDER FORM, ONCE RECEIVED BY THE HOLDING
COMPANY, MAY NOT BE MODIFIED, AMENDED OR RESCINDED WITHOUT THE CONSENT OF THE
HOLDING COMPANY, UNLESS THE CONVERSION IS NOT COMPLETED WITHIN 45 DAYS OF
TERMINATION OF THE SUBSCRIPTION OFFERING.

PAYMENT FOR SHARES

In order for subscriptions to be valid, payment for all subscribed
shares computed on the basis of the Purchase Price (I.E., $10.00 per share) must
accompany all completed Order Forms, except for shares subscribed for by the
ESOP. Payment for shares will be permitted to be made by any of the following
means: (i) in cash, if delivered to the office of the Savings Bank in person,
(ii) by check or money order, or (iii) by appropriate withdrawal authorization
from a deposit account at the Savings Bank (including certificates of deposit).
All checks or money orders must be made payable to CGB&L Financial Group, Inc.

Payments made in cash or by check or money order will be placed in a
segregated account at the Savings Bank and interest will be paid by the Savings
Bank on such payments for Common Stock at not less than the Savings Bank's then
current passbook rate. Such interest shall be paid from the date payments are
received by the Savings Bank until consummation or termination of the Offerings.
The Savings Bank will not knowingly lend funds or otherwise extend credit to any
person to purchase Common Stock.

The Order Form will contain a withdrawal authorization by which funds
may be withdrawn from deposit accounts (including certificate of deposit
accounts) at the Savings Bank to pay for subscribed shares. Once such a
withdrawal has been authorized, a hold will be placed on the designated
withdrawal amount and none of such amount may be withdrawn from the deposit
account (except by the Savings Bank as payment for Common Stock) until
consummation or termination of the Offerings. Pending completion of the
Conversion, such deposits (including the amount of the authorized withdrawal)
will continue to earn interest at the contractual rate. Deposit accounts will
be permitted to be established for the purpose of making payment for subscribed
shares of Common Stock.

If a subscriber authorizes the Savings Bank to withdraw the amount of
the purchase price from a savings account, such subscriber's savings account
will be debited and the actual withdrawal will be made only on the effective
date of the Conversion. The Savings Bank will waive any applicable penalties
for early withdrawal from certificate of deposit accounts. If, as a result, of
such withdrawal, the remaining balance of a certificate of deposit account is
less than the applicable minimum balance, the certificate evidencing such
account will be canceled as of the date of the actual withdrawal. In that
event, the remaining balance will earn interest at the Savings Bank's then
current passbook savings account rate.

COMPLETION OR TERMINATION OF THE OFFERING

<PAGE>

The Commissioner's regulations require that the Holding Company
complete the sale of Common Stock within 45 days after the close of the
Subscription Offering. The Subscription Offering and Subscription Rights in
the Subscription Offering will expire at 12:00 noon, Cerro Gordo, Illinois
time, on September 9, 1998, unless extended. The Subscription Offering maybe
extended by the Savings Bank and the Holding Company until October 1, 1998,
with the approval of the Commissioner and the FDIC, if required. If the
Community Offering is not completed by October 26, 1998 (or November 16,
1998, if the Subscription Offering is fully extended), all funds received
will be promptly returned with interest at not less than the Savings Bank's
then current passbook rate and all withdrawal authorizations will be canceled
or, if regulatory approval of an extension of the time period has been
granted, all subscribers and purchasers will be given the right to increase,
decrease or rescind their orders. If the Offerings are extended beyond
October 26, 1998 (or November 16, 1998, if the Subscription Offering is fully
extended), all subscribers will be notified of such extension, of the
duration of any extension that has been granted, and of their rights to
modify their orders. If an affirmative response to any resolicitation is not
received by the Holding Company from a subscriber, the subscriber's order
will be rescinded and all funds received will be promptly returned with
interest (or withdrawal authorizations will be canceled). No single
extension can exceed 90 days. The Offerings must be completed within 24
months after approval of the Plan at the Special Meeting. See "THE
CONVERSION."

DELIVERY OF STOCK CERTIFICATES

Certificates representing Common Stock issued in the Conversion will be
mailed by the Holding Company's transfer agent to persons entitled thereto at
the addresses of such persons appearing on the Order Form as soon as practicable
following consummation of the Conversion. Consummation of the Conversion will
occur as soon as practicable after the expiration of the Subscription and
Community Offerings. Any certificates returned as undeliverable will be held by
the Holding Company until claimed by persons legally entitled thereto or
otherwise disposed of in accordance with applicable law. Until certificates for
Common Stock are available and delivered to subscribers, subscribers may not be
able to sell the shares of Common Stock for which they have subscribed, even
though trading of the Common Stock will have commenced.

SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the number of shares of Common Stock of
the Holding Company proposed to be purchased by the Holding Company's directors
and by all directors and executive officers as a group (including purchases by
any associates of or groups acting in concert with such persons), assuming that
sufficient shares will be available to satisfy their subscriptions.

<PAGE>

<TABLE>
<CAPTION>
AT THE MAXIMUM
OF THE ESTIMATED VALUATION RANGE(1)
---------------------------------------------------------
AS A PERCENT
NAME AMOUNT NUMBER OF SHARES OF SHARES OFFERED
---------------------- ----------- ------------------ -------------------
<S> <C> <C> <C>
Dale C. Born, Director. . . . . . . . . . . $ 15,000 1,500 1.2%
Noel R. Buckley, Director . . . . . . . . . 63,250 6,325 5.0
Lester W. Crandall, Director. . . . . . . . 5,000 500 .4
Larry D. Gaitros, Director. . . . . . . . . 2,000 200 .2
Maralyn F. Heckman, Director, Secretary,. .
Treasurer and CEO. . . . . . . . . . . . . 63,250 6,325 5.0
John A. Sochor, D.D.S., Director. . . . . . 10,000 1,000 .8
C. Russell York, Director . . . . . . . . . 63,250 6,325 5.0
------- ------ -----
All Directors and Executive Officers. . . .
as a group (7 persons). . . . . . . . . . . $221,750 22,175 17.60%
------- ------ -----
------- ------ -----
</TABLE>
- -------------------

(1) Includes proposed subscriptions, if any, by associates. The ESOP
intends to acquire up to 8% of the Common Stock issued in the Conversion, or
10,120 shares at the maximum of the Estimated Valuation Range, which shares are
not reflected in the amounts to be purchased by the Holding Company's directors
and officers in the table above. In addition, this does not include awards
pursuant to the Stock Option Plan or the MRP, which will be submitted for
approval to stockholders at a meeting of stockholders expected to be held not
earlier than six months following the completion of the Conversion. See
"MANAGEMENT OF THE HOLDING COMPANY AND SAVINGS BANK -- Employee Benefit Plans."

CERRO GORDO BUILDING AND LOAN, S.B.
STATEMENTS OF INCOME

The Statements of Income of the Savings Bank for the year ending
March 31, 1998 and the eleven month period ending March 31, 1997 have been
audited by Geo. S. Olive Co. LLC, independent auditors, whose report thereon
appears elsewhere in this Prospectus. The following statements should be read
in conjunction with the Savings Bank's Financial Statements and related notes
included elsewhere herein.

<TABLE>
<CAPTION>
FOR THE PERIOD
ENDED MARCH 31,
---------------------------
1998 1997
------------ ----------
<S> <C> <C>
Interest income:
Loans receivable. . . . . . . . . . . . . $466,389 $373,424
Investment securities . . . . . . . . . . 4,680 4,267
Deposits with financial institutions. . . 70,915 82,277
------- -------
Total interest income . . . . . . . . . 541,984 459,968

Interest expense:
Deposits. . . . . . . . . . . . . . . . . 289,130 270,470
FHLB advances . . . . . . . . . . . . . . 20,633 0
------- -------
Total interest expense. . . . . . . . . 309,763 270,470

Net Interest Income 232,221 189,498
Provision for loan losses . . . . . . . . 26,500 0
------- -------
Net interest income after provision
for loan losses 205,721 189,498
------- -------

Non-interest income:. . . . . . . . . . . . 6,708 6,510
------- -------
</TABLE>

27
<PAGE>

<TABLE>
<CAPTION>
FOR THE PERIOD
ENDED MARCH 31,
---------------------------

1998 1997
------------ ----------
<S> <C> <C>
Non-interest expense:
Salaries and employee benefits . . . . . .
Net occupancy and equipment expenses . . . 115,617 98,964
Deposit insurance expense. . . . . . . . . 4,922 3,786
Insurance expense. . . . . . . . . . . . . 3,436 42,219
Other expenses . . . . . . . . . . . . . . 4,936 4,512
Total non-interest expense . . . . . . . 30,944 27,190
------- -------
159,855 176,671
------- -------

Income before income taxes . . . . . . . . 52,574 19,337

Income tax expense . . . . . . . . . . . . . 10,702 1,378
------- -------
Net income . . . . . . . . . . . . . . . $ 41,872 $ 17,959
------- -------
------- -------
</TABLE>

See accompanying notes to financial statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

GENERAL

Management's discussion and analysis of financial condition and results
of operations is intended to assist in understanding the Savings Bank's
financial condition, changes in financial condition and results of operations.
The information contained in this section should be read in conjunction with the
Financial Statements, the accompanying Notes to Financial Statements and the
other sections contained in this Prospectus.

COMPARISON OF OPERATING RESULTS FOR THE FISCAL YEARS ENDED MARCH 31, 1998 AND
1997

GENERAL. The Savings Bank recorded net income of $42,000 in 1998,
$22,000 or 110.0% higher on an annualized basis, than the $18,000 in net income
reported for fiscal 1997. The increase in earnings was primarily attributable
to an increase in net interest income which was somewhat offset by an increase
in the provision for loan losses and a decline in noninterest expense.

The return on average assets was 0.63% for 1998 compared to 0.31% for
1997 on an annualized basis. For 1998, the return on average equity was 4.60%
compared to 2.27% for 1997, also on an annualized basis.

SAIF ASSESSMENT. On September 30, 1996, the Deposit Insurance Funds Act
of 1996 was enacted which required the Federal Deposit Insurance Corporation
("FDIC") to impose a one-time special assessment on deposits held by savings and
loan institutions that are insured through the Savings Association Insurance
Fund ("SAIF"). The special assessment was equal to $0.657 per $100 of insured
deposits and was required to be applied against SAIF-assessable deposits held as
of March 31, 1995. The charge to the Savings Bank for this one-time assessment,
which was paid to the FDIC in November 1996, was $36,000.

In 1997, SAIF insured institutions were assessed according to the same
risk-based assessment schedule as the Bank Insurance Fund ("BIF") members -- 0
to 27 basis points per $100 of insured deposits. Prior to 1997, the SAIF
assessment range was 23-to-31 basis points per $100 of insured deposits. In
addition, SAIF assessed institutions were also billed an additional 6.48 basis
points for payments on the Financing Corporation ("FICO") obligation. BIF
members paid 1.296 basis points toward the FICO bonds. The Savings Bank
expensed $3,000 for FDIC insurance in 1998, compared to $42,000 for fiscal 1997.

<PAGE>

NET INTEREST INCOME. Net interest income, which is the difference
between interest income earned on loans and investments and interest expense
recorded on deposits and other interest bearing liabilities, was $232,000 for
1998, an increase of $43,000 from the $189,000 recorded for the eleven months
ended March 31, 1997. On an annualized basis, net interest income for 1997 was
$206,000. This increase was attributable to increased interest income and was
partially offset by an increase in interest expense.

Interest income was $542,000 for 1998 compared to $502,000 in 1997, on
an annualized basis. The increase was attributed to the increase in interest
income from loans. The average balance of loans outstanding during 1998 was
$5,289,000 compared to $4,629,000 during 1997. The majority of this growth was
in one- to four-family residential mortgage loans which increased to $5,304,000
at March 31, 1998 from $4,680,000 at March 31, 1997. In addition, the average
yield on loans increased to 8.81% for 1998 from 8.79% during 1997.

INTEREST EXPENSE. Interest expense was $310,000 for 1998 compared to
$295,000 in 1997, on an annualized basis. The increase was attributable to
increased borrowings from the Federal Home Loan Bank ("FHLB"). During 1998, the
Savings Bank began to use borrowings from the FHLB as a supplement to customer
deposits for financing growth in its loan portfolio. As a result, interest
expense on FHLB advances increased to $21,000 in 1998 from $0 in 1997. This
increase was partially offset by a decline, on an annualized basis, in interest
expense on deposits from $295,000 in 1997 to $289,000 in 1998.

PROVISION FOR LOAN LOSSES. The provision for loan losses for the year
ended March 31, 1998 was $26,500 compared to $0 for the eleven-month period
ended March 31, 1997. The provision for both periods reflects management's
analysis of the Savings Bank's loan portfolio based on information currently
available. In particular, management considers the level of nonperforming loans
and potential problem loans as well as the composition of its loan portfolio.
While the level of nonperforming loans declined from 1997 to 1998 and no loans
were charged-off for either period, management felt it prudent to increase the
level of its allowance for loan losses as a result of increases in its
commercial real estate loans which increased to $185,000 at March 31, 1998 from
$24,000 at March 31, 1997 as well as to keep pace with the overall growth of its
loan portfolio. While management of the Savings Bank believes that the
allowance for loan losses is sufficient based on information currently
available, no assurances can be made that future events, conditions, or
regulatory directives will not result in increased provisions for loan losses or
additions to the allowance for loan losses which may adversely affect net
income.

NON-INTEREST EXPENSE. Non-interest expense for the year ended March 31,
1998 was $160,000 compared to $193,000 for the period ended March 31, 1997, a
decrease of 17.1% on an annualized basis. The fiscal 1997 amount includes the
one-time SAIF special deposit insurance assessment of $36,000.

Salaries and employee benefits were $116,000 for the year ended
March 31, 1998 compared to $108,000 for the period ended March 31, 1997. This
represents an increase of $8,000 or 7.4%, on an annualized basis. This increase
was attributable to the addition of one part-time employee during 1998 as well
as regular annual salary increases. The increase in salary and employee benefit
expense was partially offset by a decline in deposit insurance expense resulting
from the previously mentioned SAIF assessment during fiscal year 1997.

INCOME TAX EXPENSE. Total income tax expense was $11,000 for the year
ending March 31, 1998, compared to $1,000 for the period ended March 31, 1997.
This increase was attributable to higher income before tax in 1998 which
resulted in the Savings Bank being in a higher federal tax bracket (note
corporate income tax rates range from 15% to 39% for corporations with taxable
income less than $335,000). In addition, the Savings Bank had significant net
unrealized gains on securities available for sale which reduced its tax expense.
Accordingly, the effective tax rates for 1998 and 1997 were 20.75% and 5.26%,
respectively.

29
<PAGE>

COMPARISON OF FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION AT AND FOR
THE FISCAL YEARS ENDED MARCH 31, 1998 AND 1997

TOTAL ASSETS. Total assets of the Savings Bank increased $646,000 or
10.3% from $6,289,000 at March 31, 1997 to $6,935,000 at March 31, 1998. The
growth in assets occurred primarily in loans, which increased by $848,000 or
18.0%, and cash and due from banks which increased $415,000 or 377.3%. These
increases were partially offset by a decline in interest-bearing time deposits
of $689,000 or 53.9%.

CASH AND CASH EQUIVALENTS. Cash and cash equivalents increased from
$110,000 at March 31, 1997 to $525,000 at March 31, 1998 while interest-bearing
time deposits declined from $1,279,000 at March 31, 1997 to $590,000 at March
31, 1998. These changes were the result of management depositing proceeds from
maturing time deposits into more liquid accounts at the FHLB in order to keep
them available to fund loan growth.

LOANS. Loan growth from March 31, 1997 to March 31, 1998 occurred in
both one- to four-family and commercial real estate mortgage loans. One- to
four-family mortgage loans increased $624,000 or 13.3%; commercial real estate
mortgage loans increased $161,000 or 670.8%. This growth was the result of
strong residential loan demand throughout the Savings Bank's lending area and
two commercial real estate mortgage loans totalling $170,000 made during fiscal
1998. These increases were partially offset by slight declines in both
multi-family real estate and share loans.

PROVISION FOR LOAN LOSSES. The allowance for loan losses increased from
$6,000 at March 31, 1997 to $33,000 at March 31, 1998 as a result of the $27,000
provision for loan losses recorded during fiscal 1998. The ratios of the
Savings Bank's allowance for loan losses to total loans were 0.58% and 0.13% at
March 31, 1998 and 1997. The ratios of the Savings Bank's allowance for loan
losses to total nonperforming loans were 300.0% and 14.0% at March 31, 1998 and
1997.

DEPOSITS AND LONG-TERM DEBT. Interest-bearing deposits remained fairly
stable, declining $58,000 or 1.1% from 5,308,000 at March 31, 1997 to 5,250,000
at March 31, 1998 which reflects the Savings Bank's use of FHLB advances to
supplement customer deposits as a source of financing for its loan portfolio.
Accordingly, long-term debt (FHLB advances) increased from $0 at March 31, 1997
to $600,000 at March 31, 1998.

EQUITY. Total equity capital increased from $895,000 at March 31, 1997
to $986,000 at March 31, 1998, an increase of $91,000. This increase is the
result of fiscal year 1998 net income of $42,000 coupled with an increase in the
unrealized gain on securities available for sale of $49,000.

AVERAGE BALANCE SHEET

The Savings Bank's net income depends heavily on its net interest
income, which represents the difference between income on interest-earning
assets (primarily loans, deposits with financial institutions and investments)
and expense on interest-bearing liabilities (primarily deposit accounts). Net
interest income, in turn, depends upon the volumes of interest-earning assets
and interest-bearing liabilities and the interest rate spread, which represents
the difference the interest rate earned on such assets and paid on such
liabilities.

The following table presents for the periods indicated the total dollar
amount of interest income from average interest-earning assets and the resultant
yields, as well as the total dollar amount of interest expense on average
interest-bearing liabilities and the resultant rates, and the net interest
margin. The table does not reflect any effect of income taxes. All average
balances are based on average monthly balances during the periods.

30
<PAGE>

AT MARCH 31, PERIOD ENDED MARCH 31,
------------ --------------------------------------------------------------------
1998 1998 1997
------------ -------------------------------- --------------------------------
YIELD/ AVERAGE YIELD/ AVERAGE Yield/
RATE BALANCE INTEREST RATE BALANCE INTEREST Rate(1)
---- ------- -------- ---- ------- -------- -------

(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans, net . . . . . . . . . . . . 8.45% $5,289 $466 8.81% $4,629 $373 8.79%
Interest-bearing deposits with
financial institutions . . . . . 6.06 1,205 71 5.89 1,636 82 5.47
Securities . . . . . . . . . . . . 2.65 189 5 2.65 134 4 3.26
------ ---- ------ ----
Total interest-earning assets . . 7.87 6,683 542 8.11 6,399 459 7.84
---- ----
Non-interest-earning assets . . . . 29 24
------ ------
Total assets . . . . . . . . . . $6,712 $6,423
------ ------
------ ------

Interest-bearing liabilities:
Deposits:
Savings . . . . . . . . . . . . . . 3.00 $ 462 15 3.25 $ 478 14 3.20
Certificates . . . . . . . . . . . 5.66 4,885 274 5.61 4,993 256 5.59
------ ---- ------ ----
Total deposits . . . . . . . . . . 6.36 5,347 289 5.40 5,471 270 5.38
----
FHLB advances . . . . . . . . . . . 5.52 351 21 5.98 0 -- --
------ ---- ------ ----

Total interest-bearing liabilities 5.52 5,698 310 5.44 $5,471 270 5.38

Non-interest-bearing liabilities . . 100 87
------
Total liabilities . . . . . . . . 5,798 5,558
Equity capital 914 865
------ ------
Total liabilities and equity capital $6,712 $6,423
------ ------
------ ------

Net interest income; interest rate $232 2.67% $189 2.46%
---- ------ ---- ------
---- ------ ---- ------
spread(2) . . . . . . . . . . . . . 2.35% 3.47% 2.98%
------ ------ ------
------ ------ ------
Net interest margin(3) . . . . . . .
Ratio of average-interest-earning 117.29% 116.96%
------ ------
------ ------
assets to average interest-bearing
liabilities . . . . . . . . . . . . 117.86%
------
------

</TABLE>

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

(1) Annualized.

(2) Interest rate spread represents the difference between the weighted
average yield on interest-earning assets and the weighted average rate on
interest-bearing liabilities.

(3) Net interest margin is net interest income divided by average
interest-earning assets.

RATE/VOLUME ANALYSIS. The following table describes the extent to which
changes in interest rates and changes in volume of interest-related assets and
liabilities have affected the Savings Bank's interest income and interest
expense during the periods indicated. For each category of interest-earning
assets and interest-bearing liabilities, information is provided on changes
attributable to (i) changes in volume (change in volume multiplied by prior year
rate), (ii) changes in rate (change in rate multiplied by prior year volume),
and (iii) total change in rate and volume. The combined effect of changes in
both rate and volume has been allocated proportionately to the change due to
rate and the change due to volume.

31
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------
1998 VS. 1997
--------------------------------------------

INCREASE
(DECREASE)
DUE TO
---------------------------
TOTAL INCREASE
VOLUME RATE (DECREASE)
------------ ------------ ---------------
(In Thousands)
<S> <C> <C> <C>
Interest-earning assets:
Loans, net . . . . . . . . . . . . $91 $2 $93
Interest-bearing deposits with
financial institutions . . . . . (19) (8) (11)
Securities . . . . . . . . . . . . 2 (1) 1
---- ---- ----
Total change in interest income. . $74 $9 83
---- ---- ----
Interest-bearing liabilities:. . . .
Deposits:
Savings. . . . . . . . . . . . . . -- 1 1
Certificates . . . . . . . . . . . (1) 19 18
FHLB advances. . . . . . . . . . . 21 -- 21
---- ---- ----
Total change in interest expense . 20 20 40
---- ---- ----
Net change in net interest income. . $54 $(11) $43
---- ---- ----
---- ---- ----
</TABLE>

ASSET AND LIABILITY MANAGEMENT

The primary function of asset and liability management is to maintain an
appropriate balance between liquidity for the Savings Bank, on the one hand, and
interest-earning assets and interest-bearing liabilities, on the other, in order
to produce stable net income during changing market interest-rate cycles. See
"RISK FACTORS -- Potential Effect of Changes in Interest Rates".

The Savings Bank's assets are comprised primarily of fixed rate one-to-four
family residential mortgage loans, investment securities, and interest-bearing
time deposits. The Savings Bank's liabilities are comprised primarily of
savings accounts, certificates of deposit, and Federal Home Loan Bank
borrowings. The Savings Bank's fixed rate loans have original maturities of
twenty years or less and are outstanding for an estimated average of seven
years. The loans are interest-rate sensitive in an increasing or
decreasing interest-rate environment because the interest rate charged by the
Savings Bank on the loans remains fixed for up to twenty years from the date of
origination, regardless of an increase or decrease in market interest rates.
The Savings Bank's investment security portfolio consists solely of Federal Home
Loan Mortgage Corporation common stock with no maturity date. Interest-bearing
time deposits are short term in nature and, therefore reprice more rapidly. The
savings accounts and certificates of deposit are short term in nature while the
Federal Home Loan Bank borrowings have a fixed interest rate with a remaining
maturity of approximately ten years. As interest rates increase, the Federal
Home Loan Bank borrowing rates would remain fixed and would offset a portion of
the fixed-rate loan portfolio value that also does not reprice. Conversely, if
interest rates decrease, the fixed rate on the Federal Home Loan Bank borrowings
would have a negative impact on the net portfolio value.

As market rates increase, the Savings Bank's liabilities (primarily savings
accounts, short-term certificates of deposit and Federal Home Loan Bank
borrowings) will reprice more quickly than its assets (primarily its twenty-

32
<PAGE>

year fixed rate loans). In a decreasing interest-rate environment, the
fixed-rate loans would have a shorter average maturity due to prepayments, which
would have a negative impact on the net portfolio value. In addition, because
the majority of the Savings Bank's deposits are in short-term certificates of
deposit (which can be expected to reprice upon maturation), an increase in
market interest rates will have more of a negative effect on the Savings Bank's
cost of funds than if such deposits were in savings accounts. Conversely, a
decrease in market interest rates would have a positive effect on the Savings
Bank's cost of funds when they reprice upon maturity. The rates on the Savings
Bank's certificates of deposit tend to fluctuate more quickly and in greater
increments than the rates on savings accounts. The Savings Bank's Federal Home
Loan Bank borrowings have a fixed rate with an original maturity of ten years,
which will help to offset an increase in interest rates. In a decreasing
interest rate environment, the fixed rate on the Federal Home Loan Bank
borrowings would have a negative impact on the net portfolio value. The Savings
Bank has minimal fee income to offset the risk of interest rate fluctuations.

The Savings Bank's current strategy to reduce its sensitivity to interest
rate fluctuations is twofold. First, the Savings Bank maintains liquidity
through short-term, interest-bearing time deposits with other institutions.
These interest-bearing time deposits will reprice more frequently and will
increase as interest rates increase. As interest rates decrease, the liquidity
is used to fund an increase in loan demand. Second, the Savings Bank manages it
asset and liability risk by strategically pricing the various maturities of its
certificates of deposit and through the utilization of the availability of
Federal Home Loan Bank borrowings.

The Savings Bank's Board of Directors monitors its interest rate
sensitivity through the use of the net portfolio value model produced by the
Commissioner which generates estimates of the change in the Savings Bank's net
portfolio value ("NPV") over a range of interest rate scenarios. NPV is the
present value of expected cash flows from assets, liabilities, and off-balance
sheet contracts. The NPV ratio, under any interest rate scenario, is defined as
the NPV in that scenario divided by the market value of assets in the same
scenario. The Commissioner produces such estimates utilizing its own model,
based upon data submitted on the Savings Bank's Call Reports on a quarterly
basis. The Commissioner's model assumes estimated loan prepayment rates,
reinvestment rates and deposit decay rates. The following table sets forth the
Savings Bank's NPV as of March 31, 1998 as calculated by the Commissioner.

<TABLE>
<CAPTION>
NPV AS % OF PORTFOLIO
NET PORTFOLIO VALUE VALUE OF ASSETS
--------------------------------------------------- ---------------------------------------
CHANGE (IN BASIS
POINTS) AMOUNT $ CHANGE % CHANGE NPV RATIO CHANGE(1)
IN INTEREST RATES(1) -------------- -------------- -------------- -------------- --------------
--------------------
<S> <C> <C> <C> <C> <C>
(Dollars in Thousands)

+ 400 $ 901 $(445) (33) 14.05 (431)
+ 300 1,020 (326) (24) 15.36 (300)
+ 200 1,145 (201) (15) 16.63 (173)
+ 100 1,278 (68) (5) 17.92 (44)
0 1,346 -- -- 18.36 --
- 100 1,124 (222) (16) 15.51 (285)
- 200 1,116 (230) (17) 15.15 (321)
- 300 1,003 (343) (25) 13.58 (478)
- 400 963 (383) (28) 12.86 (550)
</TABLE>

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

(1) Assumes an instantaneous and permanent uniform change in interest rates at
all maturities.

33
<PAGE>

Management believes that the assumptions used by it to evaluate the
vulnerability of the Savings Bank's operations to changes in interest rates
approximate actual experience and considers them reasonable; however, the
interest rate sensitivity of the Savings Bank's assets and liabilities and the
estimated effects of changes in interest rates on the Savings Bank's net
interest income and NPV indicated in the above table could vary substantially if
different assumptions were used or actual experience differs from the historical
experience on which they are based. In addition, the interest rate
characteristics of certain of the Savings Bank's assets and liabilities impact
the results of the above table.

LIQUIDITY AND CAPITAL RESOURCES

The Savings Bank's liquidity, represented by cash and cash equivalents, is
a product of its operating, investing, and financing activities. The Savings
Bank's primary sources of funds are deposits, amortization, prepayments and
maturities of outstanding loans and interest bearing time deposits and funds
provided from operations. While scheduled payments from the amortization of
loans and interest-bearing time deposits are relatively predictable sources of
funds, deposit flows and loan prepayments are greatly influenced by general
interest rates, economic conditions, and competition. In addition, the Savings
Bank invests excess funds in overnight deposits and other short-term
interest-earning assets which provide liquidity to meet lending requirements.
The Savings Bank has been able to generate sufficient cash through its deposits
and has begun limited use of borrowings as a source of funds during the past
fiscal year. As of March 31, 1998, the Savings Bank had the ability to borrow
up to $924 thousand from the FHLB.

Liquidity management is both a daily and a long-term function of business
management. Excess liquidity is generally invested in short-term investments
such as overnight deposits. On a longer-term basis, the Savings Bank maintains
a strategy of investing in time deposits at other institutions. The Savings
Bank uses its sources of funds primarily to meet its ongoing commitments. At
March 31, 1998 there were no approved loan commitments outstanding.
Certificates scheduled to mature in one year or less at March 31, 1998 totaled
$2.2 million. Management believes that a significant portion of maturing
deposits will remain with the Savings Bank. The Savings Bank anticipates that
even with interest rates at lower levels than have been experienced in recent
years, which has caused a disintermediation of funds, it will continue to have
sufficient funds together with borrowings, to meet its current commitments. The
mixture of deposit liabilities and borrowings will depend on the relevant cost
of each of these sources of funds.

Federally-insured state-chartered banks are required to maintain minimum
levels of regulatory capital. Under current FDIC regulations, insured
state-chartered banks generally must maintain (i) a ratio of Tier 1 leverage
capital to total assets of at least 3.0% (4.0% to 5.0% for all but the most
highly rated banks) and (ii) a ratio of Tier 1 capital to risk weighted assets
of at least 4.0% and a ratio of total capital risk weighted assets of at least
8.0%. At March 31, 1998, the Savings Bank was in compliance with applicable
regulatory capital requirements. See "HISTORICAL AND PRO FORMA CAPITAL
COMPLIANCE."

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial statements.
Comprehensive income is defined as "the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during a period
except those resulting from investment by owners and distributions to owners."
The comprehensive income and related cumulative equity impact of comprehensive
income items will be required to be disclosed prominently as part of the notes
to the financial statements. Only the impact of unrealized gains or losses on
securities available for sale is expected to be disclosed as an additional
component of the Savings Bank's income under the requirements of SFAS No. 130.
This statement is effective for fiscal years beginning after December 15, 1997.
The Savings Bank will adopt Statement 130 during fiscal year 1999.

34
<PAGE>

Also in 1997, the FASB issued Statement No. 131, "Disclosures About
Segments of an Enterprise and Related Information," which supersedes SFAS 14,
"Financial Reporting for Segments of a Business Enterprise," and establishes
standards for the way that public enterprises report information about operating
segments in annual financial statements. In addition, it requires reporting of
selected information about operating segments in annual financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic area and major customers. SFAS 131 defines
operating segments as components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. This standard is effective for financial statements periods
beginning after December 15, 1997 and requires comparative information for
earlier years to be restated. Due to recent issuance of this standard,
management has been unable to fully evaluate the impact, if any, it may have on
the Savings Bank's future financial statement disclosures.

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share." SFAS
No. 128 establishes standards for computing and presenting earnings per share
("EPS") and applies to entities with publicly held common stock or potential
common stock. SFAS No. 128 simplifies previous standards for computing EPS.
SFAS No. 128 became effective for financial statements issued for periods ending
after December 15, 1997. Accordingly, the Savings Bank will adopt SFAS No. 128
in computing EPS during the first period beginning after the successful
completion of the Conversion.

In June, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. This statement is
effective for all periods beginning after June 15, 1999. The Savings Bank will
adopt Statement 133 during fiscal year 2001 and does not anticipate any impact
to its financial statements.

IMPACT OF INFLATION AND CHANGING PRICES

The Financial Statements of the Savings Bank and related notes presented
herein have been prepared in accordance with Generally Accepted Accounting
Principles ("GAAP"), which require the measurement of financial position and
operating results in terms of historical dollars, without considering changes in
the relative purchasing power of money over time due to inflation.

Unlike most industrial companies, substantially all of the assets and
liabilities of a financial institution are monetary in nature. As a result,
interest rates have a more significant impact on a financial institution's
performance than the effects of general levels of inflation. Interest rates do
not necessarily move in the same direction or in the same magnitude as the
prices of goods and services, since such prices are affected by inflation to a
larger extent than interest rates. In the current interest rate environment,
liquidity and the maturity structure of the Savings Bank's assets and
liabilities are critical to the maintenance of acceptable performance levels.
Over the three most recent fiscal years, interest rates have been relatively low
and stable and such an environment has generally had a positive impact on the
Savings Bank's revenues and income.

35
<PAGE>

YEAR 2000 COMPLIANCE

The Savings Bank has completed the initial phase of its Year 2000
preparedness assessment. During this phase, the Savings Bank identified
those computer applications used to process information within the Savings
Bank, including accounting software used for loans and deposits. Each of the
companies providing these software programs has assured the Savings Bank in
writing that its programs are Year 2000 compliant. In addition, the Savings
Bank has contacted its principal external vendors and asked for assurance
that they are adequately addressing system and software issues related to
Year 2000. Each vendor responded that either they are or expect to be Year
2000 compliant prior to December 31, 1999. The Savings Bank has procedures
in place to confirm compliance by vendors who expect to be compliant prior to
December 31, 1999. The Savings Bank has also completed a review of its loan
portfolio and determined that the Savings Bank has no significant loss
exposure in the event a borrower's business is interrupted as a result of a
Year 2000 compliance problem. The Savings Bank has developed a testing
schedule and anticipates completion of this schedule prior to December 31,
1998. The Savings Bank has not incurred any material costs to date with
respect to the Year 2000 and based on the results of its assessment does not
anticipate that the costs to complete its Year 2000 testing schedule will be
material.

BUSINESS OF THE SAVINGS BANK

GENERAL

The Savings Bank is a community-oriented savings institution offering a
variety of financial services to meet the needs of the markets it serves. The
Savings Bank is primarily engaged in the business of attracting deposits from
the general public and using such deposits, together with other funding sources,
to invest in one- to four-family residential mortgage loans and, to a lesser
extent, multi-family residential mortgage loans, commercial real estate loans,
share loans, and other assets.

The Savings Bank's deposit and lending base is presently concentrated
within a ten mile radius of Cerro Gordo, Illinois. This area includes portions
of the Illinois counties of Macon, Moultrie and Piatt. Cerro Gordo has a
population of approximately 1,500, and its economy is based primarily on
agriculture, industry, education and health care. The major employers in the
area include the Cerro Gordo School District, Caterpillar, Inc., Archer Daniels
Midland and Bridgestone/Firestone, Inc. Much of the surrounding community is
agricultural and less populated. Cerro Gordo is a bedroom community of Decatur.
Although the economy is diversified and generally stable, population and
household growth, and median and per capita income levels for the Savings Bank's
primary market area are generally lower than comparable levels for Illinois and
the nation, while unemployment levels are generally higher. Management regards
the Savings Bank's primary market area as a low growth area in which there is
significant competition among financial service providers for market share.
Management believes that opportunities for future earnings growth in the Savings
Bank's primary market area are limited in light of these factors.

At March 31, 1998, the Savings Bank had total assets of $6.9 million, total
deposits of $5.3 million, retained earnings of $873 thousand and total equity
capital of $986 thousand. The deposits of the Savings Bank are insured up to
the applicable limits by the FDIC under the SAIF and will continue to be insured
by the FDIC subsequent to the Conversion.

36
<PAGE>

LENDING ACTIVITIES

COMPOSITION OF THE LOAN PORTFOLIO. The Savings Bank's historical lending
strategy has focused primarily on the origination of residential mortgage loans
secured by one- to four-family homes. The Savings Bank also originates, from
time to time, multi-family and commercial real estate loans, and consumer
(share) loans, although such loans presently constitute a relatively small
percentage of the Savings Bank's total loan portfolio.

At March 31, 1998, the Savings Bank's total loan portfolio totaled
$5.7 million, of which $5.3 million or 93.8% were loans secured by first
mortgages on one- to four-family properties. The balance of the gross loan
portfolio consisted of $87,000 of loans secured by multi-family residences, or
1.5% of the total gross loan portfolio, $185,000 secured by commercial real
estate, or 3.3% of the total gross loan portfolio, and $80,000 of share loans,
or 1.4% of the total loan portfolio. Virtually all of the loan portfolio is
secured by properties located in Macon, Moultrie and Piatt counties in Central
Illinois. All loans are fixed rate loans. The Savings Bank is not now, and
currently has no intention to become active in the secondary mortgage markets,
including transactions with the FHLMC or mortgage brokers.

The following table sets forth in greater detail the composition of the
Savings Bank's loan portfolio by type of loan as of the dates indicated:

<TABLE>
<CAPTION>
AT MARCH 31,
-------------------------------------------------------
1998 1997
------------------------- -------------------------
Type of Loan: AMOUNT PERCENT AMOUNT PERCENT
------------- ------ ------- ------ -------
<S> <C> <C> <C> <C>
Real Estate Mortgage Loans:
One- to four-family. . . . . . . . . . . . . $5,303,917 93.78% $4,680,155 94.88%
Multi-family . . . . . . . . . . . . . . . . 87,348 1.54 95,128 1.93
Commercial . . . . . . . . . . . . . . . . . 185,060 3.27 24,098 0.48
---------- ---------- ---------- ----------
Total Real Estate Mortgage Loans

Share loans. . . . . . . . . . . . . . . . . 79,534 1.41 133,586 2.71
---------- ---------- ---------- ----------
Total loans. . . . . . . . . . . . . . . . 5,655,859 100.00% 4,932,967 100.00%
---------- ----------
---------- ----------

Less:
Undisbursed portion of loans . . . . . . . . (23,555) (156,598)
Deferred loan fees . . . . . . . . . . . . . (73,415) (64,882)
Allowance for possible loan losses . . . . . (32,700) (6,200)
---------- ----------
Net loans. . . . . . . . . . . . . . . . . . $5,526,189 $4,705,287
---------- ----------
---------- ----------
</TABLE>
- -----------------

ONE- TO FOUR-FAMILY RESIDENTIAL LOANS. The primary lending activity of the
Savings Bank is the extension of fixed rate first mortgage residential loans
ranging in terms from 15 to 20 years to enable borrowers to purchase existing
one- to four-family homes or to construct new one- to four-family homes.
Management believes that its policy of focusing on one- to four-family
residential mortgage loans has been successful in contributing to interest
income while keeping delinquencies and losses to a minimum. At March 31, 1998,
approximately $5.3 million of the Savings Bank's total loan portfolio consisted
of loans secured by one- to four-family residential real estate.

The average outstanding balance of the loans included in the Savings Bank's
one- to four-family residential loan portfolio as of March 31, 1998 was
approximately $28,500. Management estimates that the average size of a new
single-family residential first-mortgage loan in its market area is
approximately $45,000.

The loan-to-value ratio of most single-family first-mortgage loans made by
the Savings Bank is 80%. Under the Savings Bank's lending policies, the maximum
loan-to-value ratio on a loan for the construction of a new single

37
<PAGE>

family residential home is 80%, and the maximum loan-to-value ratio on loans on
two- to four-family dwellings is 80%.

The Savings Bank requires title insurance, or an attorney's opinion as to
title, and fire and casualty insurance coverage of the property securing any
mortgage loan originated by the Savings Bank. All of the Savings Bank's real
estate loans contain due-on-sale clauses which provide that if the mortgagor
sells, conveys or alienates the property underlying the mortgage note, the
Savings Bank has the right at its option to declare the note immediately due and
payable without notice. See also "-- Loan Solicitation and Processing." The
Savings Bank's practice is to enforce such due-on-sale clauses.

MULTI-FAMILY RESIDENTIAL LENDING. At March 31, 1998, approximately
$87,000, or 1.5%, of the Savings Bank's total loan portfolio consisted of loans
secured by multi-family residential real estate.

Under the Savings Bank's current lending policies, multi-family real estate
loans are generally limited to 80% of the appraised value of the property or the
selling price, whichever is less. Loans secured by multi-family real estate are
generally larger and, like commercial real estate loans, involve a greater
degree of risk than one- to four-family residential loans. See "-- Commercial
Real Estate Loans." The number of multi-family residential dwellings in the
Savings Bank's market area is limited, and mortgage loans on such dwellings have
historically represented a relatively small percentage of the Savings Bank's
loan portfolio. The Savings Bank does not anticipate that the origination of
such loans will constitute a significant part of its future lending business.

COMMERCIAL REAL ESTATE LOANS. The Savings Bank has historically made
commercial real estate loans on a limited basis. Such loans are currently
secured by office and retail buildings. At March 31, 1998, the Savings Bank's
commercial real estate loan portfolio amounted to $185,000, or 3.3%, of the
Savings Bank's total loan portfolio as of that date. Borrowers are always
established businesses with ties to the Cerro Gordo community.

Loans secured by commercial real estate are generally larger and involve a
greater degree of risk than one-to four-family residential loans. Because
payments on loans secured by commercial real estate properties are often
dependent on the successful operation or management of the properties, repayment
of such loans may be subject to adverse conditions in the real estate market or
the economy. The Savings Bank's practice has been to underwrite such loans
based on its analysis of the amount of cash flow generated by the business in
which the real estate is used and the resulting ability of the borrower to meet
its payment obligations. Although such loans are secured by a first mortgage on
the underlying property, the Savings Bank also generally seeks to obtain a
personal guarantee of the loan by the owner of the business in which the
property is used. The Savings Bank does not anticipate that the origination of
such loans will constitute a significant part of its future lending business.

SHARE LOANS. At March 31, 1998, approximately $80,000, or 1.4%, of the
Savings Bank's total loan portfolio consisted of Share Loans. Share Loans are
loans to depositors of the Savings Bank which are secured by the borrowers'
deposits. Under the Savings Bank's current lending policies, share loans are
limited to 90% of the borrower's savings on deposit with the Savings Bank. The
borrower's passbook account or certificate of deposit is flagged by the Savings
Bank. These accounts are monitored to insure that the loan principal and
interest balance is not more than 90% of the borrower's passbook account or
certificate of deposit. The rate of interest charged on share loans is the
greater of (i) the rate on direct reduction mortgage loans on personal
residences, or (ii) one and one-half percent over the interest rate paid on the
passbook account or certificate of deposit which is pledged as collateral.

LOAN SOLICITATION AND PROCESSING. The Savings Bank receives loan
applications from a number of sources, including existing or past customers of
the Savings Bank, residents of the communities located in the Savings Bank's
primary market area, and prospective borrowers who have been referred to the
Savings Bank by real estate brokers or builders. The Savings Bank also
advertises its products and services in local newspapers circulated in the
Savings Bank's primary market area. Further business is solicited from the
Savings Bank's present customer base, from walk-in traffic, through brochures
and lobby signs.

38
<PAGE>

Upon receipt of a completed loan application from a prospective borrower,
the Savings Bank obtains a credit report from a credit reporting agency and,
depending on the type of loan, verifies employment, income and other financial
information received from the prospective borrower and requests additional
financial information, if necessary. If a loan in the amount of $250,000 or
more is secured by real estate, the Savings Bank also requires an appraisal of
the real estate by an outside appraiser approved by the Savings Bank's Board of
Directors. Real estate securing a loan of less than $250,000 is appraised by
the Savings Bank's internal appraisal committee; an outside appraisal is not
required. Once such information and appraisals are complete, the application is
forwarded for review and action to the Loan Committee of the Board of Directors.
The Board of Directors ratifies the actions of the Loan Committee. As of the
date of this Prospectus, the Savings Bank's lending officers consist solely of
its C.E.O., Maralyn F. Heckman, and Sharon McCarty.

The following table shows loans originated and repaid during the periods
indicated.

<TABLE>
<CAPTION>
PERIOD ENDED MARCH 31,
------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Net Mortgage Loans at Beginning of Period. . $4,705,287 $4,405,920

Loans originated
Real estate mortgage loans:
One- to four-family. . . . . . . . . . . . 1,739,550 1,313,940
Multi-family . . . . . . . . . . . . . . . - -
Commercial . . . . . . . . . . . . . . . . 200,000 -
Share loans. . . . . . . . . . . . . . . . . 40,190 14,970
---------- ----------
Total loans originated . . . . . . . . . 1,979,740 1,328,910

Loan Principal repayments. . . . . . . . . . 1,132,338 1,029,543
Provision for loan losses. . . . . . . . . . 26,500 -
---------- ----------
Net loan activity. . . . . . . . . . . . . . 820,902 299,367
---------- ----------

Net Loans at End of Period . . . . . . . . . $5,526,189 $4,705,287
---------- ----------
---------- ----------
</TABLE>

LOAN COMMITMENTS. The Savings Bank issues commitments for first-mortgage
residential loans, commercial real estate loans and share loans conditioned upon
the occurrence of certain events. Such commitments are made in writing on
specified terms and conditions and are honored for up to 60 days from approval,
subject to extension for an additional 15 days, depending on the type of loan.
The Savings Bank had no outstanding commitments of any kind at March 31, 1998.

LOAN ORIGINATION, SERVICING AND OTHER FEES. In addition to interest earned
on loans, the Savings Bank receives income through fees charged in connection
with loan origination late payments and miscellaneous services related to its
loans. Income from these activities varies from period to period with the
volume and type of loan originated.

The Savings Bank charges points for the origination of certain types of
mortgage loans. Each "point" is equal to 1% of the principal amount of the
mortgage loan. The point structure offered by the Savings Bank may vary from
time to time, depending upon the type of mortgage loan being made, the interest
rate offered and other competitive factors. A borrower is also required to
reimburse the Savings Bank for certain out-of-pocket expenses incurred by the
Savings Bank in connection with the processing and closing of a loan, including
the cost of independent appraisals, credit reports, title insurance, and private
mortgage insurance (if required).

Current accounting standards require fees received (net of certain loan
origination costs) for originating loans to be deferred and amortized into
interest income over the contractual life of the loan. At March 31, 1998, the
Savings Bank's deferred loan fees totaled $73,000.

39
<PAGE>

LOANS TO ONE BORROWER. Under the ISBA and subject to certain limited
exceptions, the total loans and extensions of credit of the Savings Bank
outstanding at any time to any one borrower may not exceed the greater of
$500,000 or 20% of the Savings Bank's total capital. Although the Savings Bank
has the regulatory authority to make any type of loan up to $500,000, the Board
has established a loan to one borrower limit on non-owner occupied properties of
$250,000. It should be noted that the Board could increase this self-imposed
limitation up to the limitations established by its regulators without prior
regulatory approval. As of March 31, 1998, the Savings Bank's three largest
outstanding loans to single borrowers, consisted of a eight single-family
mortgage loans in the amount of $197,756 secured by one personal residence and
seven rental properties, a single-family mortgage loan in the amount of $137,282
secured by a personal residence, and a single-family mortgage loan in the amount
of $124,212 secured by a personal residence. Each of these loans was current as
of such date and was well within the Savings Bank's lending limit.

DELINQUENCIES. The Savings Bank's collection procedures with respect to
delinquent loans include written notice of delinquency and contact by letter or
telephone by Savings Bank personnel. Most loan delinquencies are cured within
90 days and no legal action is taken. With respect to mortgage loans, if the
delinquency exceeds 90 days, the Savings Bank institutes measures to enforce its
remedies resulting from the default, including the commencement of foreclosure
action or the repossession of collateral.

NON-PERFORMING ASSETS. Non-performing assets include loans placed on
non-accrual status, loans that are 90 or more days past due, troubled debt
restructurings and foreclosed properties. The Savings Bank places loans that
are 90 days or more past due on non-accrual status unless such loans are
adequately collateralized and in the process of collection. Accrual of interest
on a non-accrual loan is resumed only when all contractually past due payments
are brought current and management believes that the outstanding loan principal
and contractually due interest are no longer doubtful of collection. As of
March 31, 1998, no loans had been placed on non-accrual status.

Property acquired by the Savings Bank as a result of a foreclosure,
property upon which a judgment of foreclosure has been entered but for which no
foreclosure sale has yet taken place and property which is in substance
foreclosed are classified as foreclosed property or real estate owned.
Foreclosed properties are recorded at the lower of the unpaid principal balance
of the related loan or fair market value. The amount by which the recorded loan
balance exceeds the fair market value at the time the property is classified as
foreclosed property is charged against the allowance for loan losses. Any
subsequent reduction in the carrying value of a foreclosed property, along with
expenses to maintain or dispose of a foreclosed property, is charged against
current earnings. As of March 31, 1998, the Savings Bank had no foreclosed
properties or "real estate owned."

The following table sets forth information with respect to Savings Bank's
non-performing assets for the periods indicated. During the periods shown,
Savings Bank had no troubled debt restructured loans within the meaning of
Statement of SFAS 15.

<TABLE>
<CAPTION>
AT MARCH 31,
-----------------------------
1998 1997
------------- -------------
<S> <C> <C>
Loans accounted for on
a non-accrual basis: . . . . . . . . . . . . . . . . . $ -- $ --

Accruing loans which are contractually
past due 90 days or more:
Real estate -
One- to four-family. . . . . . . . . . . . . . . . . 11,116 42,699
Multi-family . . . . . . . . . . . . . . . . . . . . -- --
Commercial . . . . . . . . . . . . . . . . . . . . . -- --
Share . . . . . . . . . . . . . . . . . . . . . . . . -- --
------- -------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . 11,116 42,699
------- -------
</TABLE>

40
<PAGE>

<TABLE>

<S> <C> <C>
Total of Nonaccrual and 90 days past due loans . . . 11,116 42,699
Real estate owned. . . . . . . . . . . . . . . . . . . . -- --
Other Non-Performing Assets. . . . . . . . . . . . . . . -- --
------- -------
Total nonperforming assets . . . . . . . . . . . . . . $11,116 $42,699
------- -------
------- -------
Total loans delinquent 90 days or more to net loans. . . 0.20% 0.91%
Total loans delinquent 90 days or more to total assets . 0.16% 0.68%
Total nonperforming assets
to total assets. . . . . . . . . . . . . . . . . . . . 0.16% 0.68%

</TABLE>

As of March 31, 1998, the Savings Bank has no loans which are not described
above, but where known information about possible credit problems of borrowers
causes management to have serious doubts as to the ability of such borrowers to
comply with the present repayment terms.

CLASSIFIED ASSETS. FDIC policies require that each insured depository
institution review and classify its assets on a regular basis. In addition, in
connection with examinations of insured institutions, regulatory examiners have
the authority to identify problem assets and, if appropriate, require them to be
classified. The Savings Bank reviews and classifies its assets at least
quarterly. There are three classifications for problem assets: substandard,
doubtful and loss. Substandard assets must have one or more defined weaknesses
and are characterized by the distinct possibility that the insured institution
will sustain some loss if the deficiencies are not corrected. Doubtful assets
have the weaknesses of substandard assets, with the additional characteristic
that the weaknesses make collection or liquidation in full on the basis of
currently existing facts, conditions and values, questionable, and there is a
high possibility of loss. An asset classified as loss is considered
uncollectible and of such little value that continued treatment of the asset as
an asset on the books of the institution is not warranted.

An insured institution is required to establish prudent general allowances
for loan losses with respect to assets classified as substandard or doubtful.
The institution is required either to charge off assets classified as loss or to
establish a specific allowance for 100% of the portion of the asset classified
as loss.

At March 31, 1998 and 1997 the aggregate amounts of Savings Bank's
classified assets, and of Savings Bank's general loss allowances for the period
then ended, were as follows:

<TABLE>
<CAPTION>
AT MARCH 31,
----------------------------------------
1998 1997
------------------- -------------------
<S> <C> <C>
Substandard assets . . . . . . . . $11,116 --
General loss allowances. . . . . . $32,700 $6,200

</TABLE>

The classified asset identified in the table above relate to one
residential mortgage loan.

ALLOWANCE FOR LOAN LOSSES. Under applicable federal policies, the Savings
Bank is required to establish general allowances for loan losses. In addition
to such general valuation allowances, the Savings Bank may establish specific
loss reserves against specific assets with respect to which a loss may be
realized General allowances represent loss allowances which have been
established to recognize the inherent risks associated with lending activities,
but which, unlike specific allowances, have not been allocated to recognize
probable losses on particular problem assets.

The Savings Bank's management evaluates the amount of its allowance for
loan losses quarterly. Such evaluation includes a review of all loans for which
full collectibility may not be reasonably assured and considers among other
matters, the estimated market value of the underlying collateral of problem
loans, prior loss experience, economic conditions and overall portfolio quality.
The Savings Bank's determination as to its classification of assets and the
amount of its specific and general valuation allowances are subject to review by
the Commissioner and the FDIC, either of which can require the Savings Bank to
establish additional general or specific loan loss allowances.

41
<PAGE>

Provisions for losses are charged against earnings in the year they are
established and added to the allowance. Loan losses are charged against the
allowance.

The Savings Bank established provisions for loan losses for the years ended
March 31, 1998 and the eleven months ended March 31, 1997 of $27,000 and $0,
respectively. At March 31, 1998, the Savings Bank had an allowance for loan
losses of $33,000, or, 0.58%, of total loans, and 300.0% of total non-performing
assets.

Management believes that the Savings Bank's loan loss reserves were
adequate at March 31, 1998. There can be no assurance, however, that the
allowance for loan losses will be adequate to cover losses which may in fact be
realized in the future and that additional provisions for loan losses will not
be required. Any material increase in reserves or material loss for which an
adequate reserve has not been established may adversely affect the Savings
Bank's financial condition and earnings.

The following table sets forth an analysis of the Savings Bank's gross
allowance for possible loan losses for the periods indicated. Where specific
loan loss reserves have been established, any difference between the loss
reserve and the amount of loss realized has been charged or credited to current
income.

<TABLE>
<CAPTION>
PERIOD ENDED MARCH 31,

1998 1997
------------- -------------
<S> <C> <C>
Allowance at beginning of period . . . . . . $ 6,200 $6,200

Provision for loan losses. . . . . . . . . . 26,500 --
Total recoveries . . . . . . . . . . . . . -- --

Total charge offs. . . . . . . . . . . . . -- --
------- -------
Balance at end of period . . . . . . . . . $32,700 $6,200
------- -------
------- -------
Ratio of allowance to total loans
outstanding at the end of the period. . . . 0.58% 0.13%

Ratio of net charge offs to average
loans outstanding during the period . . . . N/A N/A

</TABLE>

The following table sets forth the breakdown of the allowance for loan
losses by loan category for the periods indicated.

<TABLE>
<CAPTION>
AT MARCH 31,
--------------------------------------------------------
1998 1997
---------------------------- ----------------------------
AS % OF
AS % OF OUTSTANDING OUTSTANDING
AMOUNT LOANS IN CATEGORY AMOUNT LOANS IN CATEGORY
------- ----------------- ------ -----------------
<S> <C> <C> <C> <C>
Real estate -- mortgage:
One- to four- family . . . . $30,850 94.30% $6,200 100.00%
Multi-family . . . . . . . . -- -- -- --
Commercial . . . . . . . . . 1,850 5.70 -- --
Share. . . . . . . . . . . . . -- -- -- --
------- ------- ------ -------

Total allowance for loan losses $32,700 100.00% $6,200 100.00%
------- ------- ------ -------
------- ------- ------ -------
</TABLE>

INVESTMENT ACTIVITIES

Under applicable regulations of the Commissioner, the Savings Bank has the
authority to invest in various types of liquid assets, including United States
Treasury obligations, obligations of various Federal agencies and corporations
and of state and municipal governments, Federal Home Loan Bank of Chicago stock,
and certificates

42
<PAGE>

of deposit, demand or savings accounts or other insured obligations of federally
insured financial institutions. Subject to various restrictions, the Savings
Bank may also invest a portion of its assets in investment grade commercial
paper and debt securities.

Investment decisions are made by the C.E.O. of the Savings Bank in
accordance with an investment policy adopted by the Board of Directors of the
Savings Bank. Under the investment policy in effect as of the date hereof, the
Savings Bank is permitted to invest in U.S. treasury bills, notes and bonds,
securities backed by the full faith and credit of the federal government or
federal agencies, state, county and municipal securities that meet specified
credit standards and certificates of deposit, demand or savings accounts or
other insured obligations of federally insured financial institutions. Under
the Savings Bank's investment policy, the Savings Bank may invest in certain
other forms of bank-eligible securities if such investment is approved by the
Board of Directors.

At March 31, 1998, the Savings Bank held $175 thousand in investment
securities, compared with $101 thousand at March 31, 1997.

The following table sets forth certain information with respect to each
security which had an aggregate book value in excess of 10% of the Savings
Bank's retained earnings at the dates indicated.

<TABLE>
<CAPTION>
AT MARCH 31,
--------------------------------------------------------------------
1998 1997
-------------------------------- --------------------------------
CARRYING MARKET CARRYING MARKET
VALUE VALUE VALUE VALUE
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Federal Home Loan Mortgage
Corporation ("FHLMC") common
stock . . . . . . . . . . . . $175,329 $175,329 $100,716 $100,716

</TABLE>

The following table sets forth the Savings Bank's investment securities
portfolio at carrying value at the dates indicated.

<TABLE>
<CAPTION>
MARCH 31,
--------------------------------------------------------------------
1998 1997
-------------------------------- --------------------------------
BOOK PERCENT OF BOOK PERCENT OF
VALUE(1) PORTFOLIO VALUE PORTFOLIO
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
FHLMC common stock . . . . . . $175,329 100 $100,716 100
-------- ---- -------- ----
Total . . . . . . . . . . . . $175,329 100% $100,716 100%
-------- ---- -------- ----
-------- ---- -------- ----
</TABLE>

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

(1) The Savings Bank adopted the provisions set forth in SFAS No. 115 on
April 1, 1994, which requires entities to carry securities that are available
for sale at their market value while continuing to carry securities that are
held to maturity at their amortized cost. The Savings Bank had no securities
classified as held to maturity at March 31, 1998 or 1997.

DEPOSIT ACTIVITIES AND OTHER SOURCES OF FUNDS

GENERAL. The Savings Bank's primary sources of funds for use in lending
and investing and for other general purposes are deposits and proceeds from
principal and interest payments on loans, investment securities and interest
bearing time deposits. The Holding Company does not currently intend to change
but does intend to expand the products and services offered by the Savings Bank.
Contractual loan repayments are a relatively stable source of

43
<PAGE>

funds, while deposit inflows and outflows and loan prepayments are significantly
influenced by general interest rates and money market conditions. Borrowings
may be used on a short-term basis to compensate for reductions in the
availability of funds from other sources.

The following table sets forth information concerning the deposit flows of
the Savings Bank during the periods indicated.

44
<PAGE>

<TABLE>
<CAPTION>
AT AND FOR THE PERIOD
ENDED MARCH 31,
---------------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Total deposits at beginning of period $5,308,464 $5,482,630

Net withdrawals (227,181) (339,561)

Interest credited on deposits 169,024 165,395
---------- ----------

Total deposits at end of period $5,250,307 $5,308,464
---------- ----------
---------- ----------
</TABLE>

DEPOSIT ACCOUNTS. The Savings Bank attracts deposits within its primary
market area by offering a variety of deposit accounts, including passbook
savings accounts and certificates of deposit. The flow of deposits is
influenced significantly by general economic conditions, changes in money market
and prevailing interest rates, and competition. See "RISK FACTORS -- Risks
Associated with the Savings Bank's Primary Market Area." Management generally
reviews at least on a monthly basis the interest rates set for its deposit
accounts. The Savings Bank has historically paid deposit rates at the higher
end of the range offered by its competitors, in order to retain existing and
attract new deposits, although there are no assurances that management will
continue the practice in the future. Such practice is also subject to
regulation by the FDIC. See "SUPERVISION AND REGULATION -- The Savings Bank --
Brokered Deposits." The Savings Bank also relies on customer service and
long-standing relationships with customers to attract and retain deposits.

The following table sets forth the balances of savings deposits in the
various types of savings accounts offered by the Savings Bank at the dates
indicated.

<TABLE>
<CAPTION>
AT AND FOR THE PERIOD ENDED MARCH 31,

1998 1997
----------------------------- ---------------------------
AMOUNT PERCENT OF TOTAL AMOUNT PERCENT OF TOTAL
------ ---------------- ------ ----------------
<S> <C> <C> <C> <C>
Regular savings accounts . . . . . . . . . . . . . $ 461,384 8.79% $ 409,467 7.71%
Fixed-rate certificates which mature
in the year ending (1):
March 31, 1999 . . . . . . . . . . . . . . . . . 2,190,214 41.72 2,590,242 48.79
March 31, 2000 . . . . . . . . . . . . . . . . . 1,469,142 27.98 390,223 7.35
March 31, 2001 . . . . . . . . . . . . . . . . . 311,441 5.93 1,335,233 25.16
Certificates maturing thereafter . . . . . . . . 818,126 15.58 583,299 10.99
---------- ------ ---------- ------
Total. . . . . . . . . . . . . . . . . . . . . . $5,250,307 100.00% $5,308,464 100.00%
---------- ------ ---------- ------
---------- ------ ---------- ------
</TABLE>

NOTE: Employee IRA-SEP accounts are included in certificate balances: amounts
are $132,641 and $112,577 for March 31, 1998 and 1997, respectively.

(1) At March 31, 1998 and 1997 jumbo certificates amounted to $100,000.

The following table sets forth the amount and maturities of time deposits
classified by rates at March 31:

45
<PAGE>

<TABLE>
<CAPTION>
1998
AMOUNT DUE 1997
------------------------------------------------------------------------------- ----------
LESS THAN 1-2 2-3 AFTER
ONE YEAR YEARS YEARS 3 YEARS TOTAL TOTAL
-------- ----- ----- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
4.00 - 4.99%. . . . . $ 53,662 -- -- -- $ 53,662 $ 151,929
5.00 - 5.99%. . . . . 2,054,587 $ 410,863 $ 57,601 $165,510 2,688,561 2,437,819
6.00 - 6.99%. . . . . 73,974 1,046,724 160,580 616,476 1,897,754 2,150,786
7.00 - 7.99%. . . . . 7,991 11,555 93,260 36,140 148,946 158,463
---------- ---------- -------- -------- ---------- ----------
Total . . . . . . . . . $2,190,214 $1,469,142 $311,441 $818,126 $4,788,923 $4,898,997
---------- ---------- -------- -------- ---------- ----------
---------- ---------- -------- -------- ---------- ----------
</TABLE>

BORROWINGS. The Savings Bank may obtain advances from the FHLB of Chicago
upon the security of the common stock it owns in that bank and certain of its
residential mortgage loans and securities held to maturity, provided certain
standards related to creditworthiness have been met. Such advances are made
pursuant to several credit programs, each of which has its own interest rate and
range of maturities. Prior to fiscal 1998, the Savings Bank had, from time to
time, used short-term borrowings, however, the Savings Bank had not used
long-term borrowings.

The following table sets forth the amounts of the Savings Bank's borrowings
and the weighted average rates for the year ended March 31, 1998. The Savings
Bank had no borrowings at the year ended March 31, 1997.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
MARCH 31, 1998
------------------
<S> <C>
FHLB advances:
Average balance outstanding during the period(1) . . . . . . . . . . . . . . . $366,500
Maximum amount outstanding at any month-end during the period. . . . . . . . . $600,000
Balance outstanding at end of period . . . . . . . . . . . . . . . . . . . . . $600,000
Weighted average interest rate during the period . . . . . . . . . . . . . . . 5.98%
Weighted average interest rate at the end of period. . . . . . . . . . . . . . 6.36%

</TABLE>

- ---------------------------
(1) The average balance was computed using an average of monthly balances
during the year.

COMPETITION

The Savings Bank faces strong competition both in attracting deposits and
making real estate loans. Its most direct competition for deposits has
historically come from other savings institutions, credit unions and commercial
banks located in its market area including many large financial institutions
which have greater financial and marketing resources available to them. As of
June 30, 1997, the Savings Bank's total deposits ranked eighth out of eight
commercial banks and savings associations operating in Piatt County, Illinois.
In addition, during times of high interest rates, the Savings Bank has faced
significant competition for investors' funds from short-term money market
securities, mutual funds and other corporate and government securities. The
ability of the Savings Bank to attract and retain savings deposits depends on
its ability to generally provide a rate of return, liquidity and risk comparable
to that offered by competing investment opportunities.

The Savings Bank experiences strong competition for real estate loans
principally from other savings institutions, and commercial banks. The Savings
Bank competes for loans principally through the interest rates and loan fees it
charges, the efficiency and quality of services it provides borrowers and the
convenient location of its office. Competition may increase as a result of the
continuing reduction of restrictions on the interstate operations of financial
institutions.

46
<PAGE>

PROPERTIES

The Savings Bank's sole office is located at 229 E. South Street,
Cerro Gordo, Illinois 62801. The office was opened in 1963 and consists of the
first floor of a two-story, brick building. At March 31, 1998, the net book
value of the Savings Bank's premises and equipment was $16,000. The Savings
Bank believes that its facilities are adequate for its current needs and will
continue to be adequate for its needs following the Conversion.

EMPLOYEES

As of March 31, 1998, the Savings Bank had a total of 4 full-time
employees. The Savings Bank's employees are not represented by a union or
collective bargaining group. The Savings Bank considers its relationship with
its employees to be satisfactory.

LEGAL PROCEEDINGS

The Savings Bank is, from time to time, a party to legal proceedings
arising in the ordinary course of its business, including legal proceedings to
enforce its rights against borrowers. The Savings Bank is not currently a party
to any legal proceedings which could reasonably be expected to have a material
adverse effect on the financial condition or operations of the Savings Bank.

MANAGEMENT OF THE HOLDING COMPANY AND SAVINGS BANK

DIRECTORS OF THE HOLDING COMPANY

The Board of Directors of the Holding Company is currently the same as
that of the Savings Bank. Their names and biographical information are set
forth below under "Directors of the Savings Bank." The Board of Directors is
divided into three classes, each of which will serve a three-year term (except
with respect to two of the classes for the first two years after the
incorporation of the Holding Company). One class of directors, consisting of
Lester W. Crandall and C. Russell York, has a term of office expiring at the
first annual meeting of the Holding Company following the Conversion; a second
class, consisting of Noel R. Buckley, Larry D. Gaitros and John A. Sochor,
D.D.S, has a term of office expiring at the annual meeting to be held one year
thereafter, and a third class, consisting of Dale C. Born and Maralyn F.
Heckman, has a term of office expiring at the annual meeting to be held two
years thereafter. Mrs. Heckman is the President, Secretary and Treasurer of the
Holding Company.

None of the directors has received remuneration from the Holding Company to
date, and it is expected that no compensation will initially be paid to them by
the Holding Company after the Conversion. Information concerning the principal
occupations and employment of, and compensation received from the Savings Bank
by, the directors of the Holding Company is set forth under "-- Directors of the
Savings Bank," and "-- Directors' Fees."

The Certificate of Incorporation of the Holding Company provides that no
director of the Holding Company shall be personally liable to the Holding
Company or its stockholders for monetary damages for breach of fiduciary duty by
such person as a director, except for liability: (1) for any breach of the
director's duty of loyalty to the Holding Company or its stockholders, (2) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) under Section 174 of the General Corporation Law
of the State of Delaware, or (4) for any transaction from which the director
derived improper personal benefit.

DIRECTORS OF THE SAVINGS BANK

The direction and control of the Savings Bank is vested in its Board of
Directors who, because the Savings Bank is organized in mutual form, have
previously been elected by the members of the Savings Bank. Upon completion of
the Conversion, each director of the Savings Bank immediately prior to the
Conversion will continue to serve as a director of the Savings Bank after the
Conversion. All of the members of the Board of Directors stand

47
<PAGE>

for election each year. Because the Holding Company will own all of the issued
and outstanding capital stock of the Savings Bank following the Conversion, the
Holding Company will elect the directors of the Savings Bank following the
Conversion.

The Bylaws of the Savings Bank provide that a director is not personally
liable to the Savings Bank or its shareholders for monetary damages for breach
of the director's fiduciary duty except for liabilities for: (1) an act or
omission that is grossly negligent, (2) a breach of the director's duty of
loyalty to the Savings Bank or its shareholders, (3) acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
(4) a transaction from which the director derived an improper personal benefit,
or (5) an act or omission occurring before the effective date of the provision
in the Bylaws.

The following table sets forth certain information with respect to the
persons who currently serve as members of the Board of Directors of the Savings
Bank.

<TABLE>
<CAPTION>
AGE AT POSITIONS HELD
NAME MARCH 31, 1998 WITH THE SAVINGS BANK DIRECTOR SINCE TERM EXPIRES
------------------------- ---------------- ----------------------- ---------------- --------------
<S> <C> <C> <C> <C>
Dale C. Born 66 Director 1993 1999

Noel R. Buckley 63 Director 1995 1999

Lester W. Crandall 40 Director 1998 1999

Larry D. Gaitros 38 Director 1997 1999

Maralyn F. Heckman 57 Director, Secretary, 1977 1999
Treasurer and CEO

John A. Sochor, D.D.S. 50 Director and 1981 1999
President of Board

C. Russell York 56 Director and 1983 1999
Vice President of Board
</TABLE>

The business experience for the past five years of each of the current
directors is as follows:

Mr. Born has been retired from the A.E. Staley Manufacturing Company since
1987. For more than the past five years, Mr. Born has been engaged in family
farming.

Mr. Buckley retired as a floor supervisor from the Firestone Tire and
Rubber Company in 1994.

Mr. Crandall has been the meat manager of Eagle Food Center in Decatur,
Illinois for more than the past five years.

Mr. Gaitros has been a millwright at Archer Daniels Midland in Decatur,
Illinois for more than the past five years.

Mrs. Heckman has held various positions with the Savings Bank since 1976.
In May of 1977, Mrs. Heckman became the Chief Executive Officer of the Savings
Bank.

Dr. Sochor has been a licensed self-employed dentist in Cerro Gordo,
Illinois for more than the past five years.

C. Russell York has been a service technician for Phil Flaugher Electric
Corporation in Decatur, Illinois since October of 1994. Prior to that, Mr. York
was employed with the A.E. Staley Manufacturing Company in Decatur, Illinois for
35 years.

48
<PAGE>

MEETINGS AND COMMITTEES OF THE BOARDS OF DIRECTORS

The Savings Bank's Board of Directors conducts its business through
meetings of the Board and the activities of committees of the Board. During the
fiscal year ended March 31, 1998, the Savings Bank's Board of Directors held
18 meetings. Other than Mr. Coffey, who has been ill, no director of the
Savings Bank attended fewer than 75% of the aggregate number of meetings of the
Board of Directors or meetings of committees on which such director served held
in the 1998 fiscal year.

On April 15, 1998, the Board of Directors of the Savings Bank reviewed its
committee structure and established six standing committees: audit, loan,
nominating, compensation, appraisal and conversion. It is expected that the
loan and appraisal committees will meet on a regular basis and that the audit,
nominating, compensation and conversion committees will meet only a few times
per year.

Messrs. Born, Buckley and York are members of the audit committee. The
audit committee is principally responsible for recommending which firm to engage
as the Savings Bank's external auditor. Further, the entire board meets with
the outside auditors to review the Savings Bank's annual financial statements
and matters relating thereto. If any matter needs additional attention, the
audit committee meets with the auditors without management present.

Mrs. Heckman and Dr. Sochor are members of the loan committee. The loan
committee is principally responsible for insuring that the lending policies of
the Savings Bank are implemented and observed. They meet between regular
scheduled board meetings to review the recommendations of the appraisal
committee and approve loan applications within the limits set forth in the
Savings Bank's lending policies.

Messrs. Born, Buckley, Crandall, Gaitros, York and director Emeritus Miller
are members of the appraisal committee. The appraisal committee is principally
responsible for insuring that the appraisal policy of the Savings Bank is
implemented and observed. Three members of this committee visually inspect each
property being appraised. All members of the appraisal committee sign a written
recommendation to the loan committee regarding each loan application and
appraisal.

Messrs. Buckley, Gaitros and York are members of the nominating committee.
The nominating committee is principally responsible for recommending to the
Board of Directors the slate of nominees of directors to be elected by the
members of the Savings Bank. Any member of the Savings Bank may nominate an
individual for election as a director by notifying the secretary of the Savings
Bank in writing at least five days before the meeting at which the election is
to take place. Following the Conversion, the Holding Company will be the sole
stockholder of the Savings Bank, and such nomination procedures will no longer
apply.

All board members are members of the compensation committee. The
compensation committee is principally responsible for reviewing and establishing
the salaries and benefits for employees.

Mrs. Heckman and Messrs. Born and Buckley are members of the conversion
committee. The conversion committee is principally responsible for taking
action necessary or appropriate to implement the decision of the board to
proceed with adopting the Plan of Conversion.

DIRECTORS' FEES

All directors of the Savings Bank, including directors who are officers of
the Savings Bank, receive a fee of $125 for each meeting of the Board they
attend. No fees are paid for attending committee meetings. The Holding
Company's Board of Directors intends to meet quarterly. Directors of the
Holding Company will not receive any fees in consideration of their service.

EXECUTIVE OFFICERS

49
<PAGE>

The Holding Company currently has one executive officer. Mrs. Maralyn F.
Heckman is the Secretary, Treasurer and President of the Holding Company. For
information concerning Mrs. Heckman's prior business experience, see
"-- Directors of the Savings Bank."

The Savings Bank currently has one executive officer. Mrs. Maralyn F.
Heckman is the Secretary, Treasurer and Chief Executive Officer of the Savings
Bank and has held that position since May, 1977.

Messrs. Sochor and York are respectively President and Vice President of
the Savings Bank's Board of Directors but only perform policy making functions
in their capacity as a director. Accordingly, the Board of Directors does not
consider Messrs. Sochor and York to be executive officers of the Savings Bank.

EXECUTIVE COMPENSATION

The table below sets forth the total amount of cash compensation paid by
the Savings Bank to its Chief Executive Officer during the fiscal year ended
March 31, 1998. No officer or employee of the Savings Bank received
compensation in excess of $100,000 during the fiscal year ended March 31, 1988.

EXECUTIVE COMPENSATION TABLES

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION COMPENSATION
------------------ ---------- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Maralyn F. Heckman 1998 $35,100 $1,000 -- $1,800(1)

</TABLE>

(1) Directors fees.

The Holding Company has paid no compensation to date to the sole executive
officer of the Holding Company. The Holding Company does not plan to pay
compensation to officers of the Holding Company for their services as such.

EMPLOYEE BENEFIT PLANS

SIMPLIFIED EMPLOYEE PENSION PLAN. The Savings Bank currently maintains a
simplified employee pension plan (the "SEP") to provide retirement benefits for
employees eligible to participate therein. The SEP is a qualified plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code").
The SEP provides that the Savings Bank shall make monthly contributions of not
more than 15% of each eligible employee's compensation to an Individual
Retirement Account established for that employee. Employees, who have attained
at least age 21 and who have worked for the Savings Bank in two out of the five
preceding years are eligible for SEP contributions. Employees who are covered
under a collective bargaining agreement and employees who have compensation
during the year of less than $300 are not eligible to participate for that year.
The Savings Bank may, but does not anticipate that it will continue to make
contributions to the SEP, due to the costs associated with funding the ESOP
being adopted in connection with the Conversion and due to the limitations on
retirement plan contributions set forth in the Code.

EMPLOYEE STOCK OWNERSHIP PLAN. The Board of Directors of the Savings Bank
and the Holding Company have approved the adoption of an ESOP, to be effective
in connection with the Conversion. Employees of age 21 or older who have
completed at least 1,000 hours of service in a 12-month period of employment
with the Savings Bank will be eligible to participate in the ESOP. The Savings
Bank will submit an Application for a Letter of Determination to the Internal
Revenue Service as to the tax qualified status of the ESOP under Section 401(a)
of the Code. Although

50
<PAGE>

no assurances can be given, the Savings Bank and the Holding Company expect that
the ESOP will receive a favorable determination letter.

Benefits under the ESOP will be paid in shares of Common Stock. The ESOP
anticipates borrowing funds from the Holding Company to acquire 8% of the Common
Stock sold in the Conversion. This loan will be secured by the shares purchased
with the proceeds and will be repaid by the ESOP with funds from the Savings
Bank's contributions to the ESOP and earnings on ESOP assets. Shares purchased
with such loan proceeds will be held in a suspense account for allocation among
participants as the loan is repaid. Such shares will be allocated among the
officers and employees of the Savings Bank each year, pro rata, in accordance
with their compensation for such year. The Savings Bank expects to make
contributions to the ESOP at such times and in an amount that, at a minimum,
will enable the ESOP to meet its debt service obligations in accordance with the
loan terms. Any contributions in excess of this amount may be made at the
Savings Bank's discretion. While the loan is outstanding, any cash dividends
received with respect to the shares purchased with the proceeds of the loan will
be applied to the principal and interest payments due on such loan. The loan
will require annual interest and principal payments over a ten-year period and
will bear interest at a rate of 8%.

The Savings Bank's contributions to the ESOP to retire the principal and
interest on the ESOP debt will be accounted for as compensation and employee
benefits expense. The Savings Bank expects that the annual compensation and
employee benefits expense related to the ESOP will be approximately $15,000
(including $8,000 for interest on the ESOP debt) on a pre-tax basis and assuming
that the ESOP purchases 8% ($101,200) of the Common Stock sold in the Conversion
based on the maximum of the Estimated Valuation Range ($1,265,000). The
contributions to repay principal and interest on the ESOP debt are tax
deductible to the Savings Bank.

The ESOP intends to purchase 8% of the Common Stock sold in the Conversion;
however, under certain circumstances the ESOP's purchases in the Conversion may
be limited to an amount less than 8% or may be prohibited altogether. The ESOP
will be permitted to purchase Common Stock in the Offering only if stock is
available after satisfaction of orders by Eligible Account Holders. If an
insufficient amount of stock is available after the satisfaction of orders by
Eligible Account Holders to permit the ESOP to purchase 8% of the total number
of shares sold in the Offering, the ESOP intends to purchase stock after the
Conversion, either in the open-market or from the Holding Company's authorized
but unissued shares, so that, following such purchase, the ESOP will own 8% of
the Holding Company's then outstanding Common Stock. If the ESOP purchases
shares of Common Stock after the Conversion, the ESOP must purchase the Common
Stock at the then prevailing market price.

ESOP participants must have completed 1,000 hours of service during a plan
year and be employed on the last day of the plan year or have terminated their
employment on account of death, disability or retirement during the plan year in
order to receive an allocation of shares for that plan year. Participants'
benefits vest at a rate of 20% for each year of service and are 100% vested at
the end of five years of service. Vesting will be accelerated upon retirement,
death or disability of the participant or upon termination of the ESOP. Vested
benefits will be payable upon retirement, death, disability, or separation from
service. Contributions and forfeitures will be allocated pro rata, based on the
ratio each participant's compensation bears to the compensation of all
participants entitled to share in such allocation.

The compensation committee of the Savings Bank's Board of Directors will
administer the ESOP. A trustee for the ESOP (the "ESOP Trustee") will be
appointed prior to the Conversion. The ESOP Trustee will invest the trust
assets only upon the direction of the compensation committee. The ESOP Trustee
will vote shares allocated to participants' accounts in accordance with the
participants' written instructions. The ESOP Trustee will vote unallocated
shares in accordance with the instructions of the compensation committee, or, in
the absence of such instructions, in the same proportions as the allocated
shares are voted.

<PAGE>

STOCK OPTION PLAN. The Board of Directors of the Holding Company expects
to approve the adoption of the Stock Option Plan, subject to receipt of Stock
Option Plan Stockholder Approval. The Stock Option Plan may not, and will not,
be established and become effective unless and until Stock Option Plan Approval
is obtained. The Stock Option Plan is intended to promote stock ownership by
directors and selected officers and employees of the Holding Company and the
Savings Bank to increase their proprietary interest in the Holding Company and
to encourage them to remain in the employ of the Holding Company or the Savings
Bank.

The Stock Option Plan is to be administered by a committee (the
"Committee") comprised of two or more members of the Board of Directors of the
Holding Company. None of the members of the Committee may be an officer or
employee of the Holding Company or the Savings Bank or may have received any
discretionary stock-based incentive awards under any plan of the Holding Company
or the Savings Bank during the year prior to or during service on the Committee.
The Committee will have the authority, among other things, to select the
employees to whom options may be granted, to determine the terms of each option,
to interpret the provisions of the Stock Option Plan and to make all other
determinations that it may deem necessary or advisable for the administration of
the Stock Option Plan. Each determination or other action made or taken
pursuant to the Stock Option Plan, including interpretation of the Stock Option
Plan and the specific terms and conditions of the options granted thereunder, by
the Committee will be final and conclusive for all purposes and upon all
persons.

The Stock Option Plan provides for the grant of "incentive stock options"
within the meaning of Section 422 of the Code, and for options that do not
constitute incentive stock options (referred to herein as "nonstatutory
options"), as determined in each individual case by the Committee. Incentive
stock options granted under the Stock Option Plan have certain advantageous tax
attributes under federal and Illinois income tax laws. No taxable income is
recognized by the option holder for federal or Illinois income tax purposes at
the time of the grant or exercise of an incentive stock option, and no federal
or Illinois income tax deduction is available to the Holding Company or the
Savings Bank as a result of such a grant or exercise. Any gain or loss
recognized by an option holder on the later disposition of shares acquired
pursuant to the exercise of an incentive stock option generally will be treated
as long-term capital gain or loss if such disposition does not occur prior to
one year after the date of exercise of the option or two years after the date
the option was granted.

As in the case of incentive stock options, the grant of a nonstatutory
stock option will not result in taxable income to the recipient of the option
for federal or Illinois income tax purposes nor will the Holding Company or the
Savings Bank be entitled to an income tax deduction. Upon exercise of a
nonstatutory stock option, however, the option holder will generally recognize
ordinary income for federal and Illinois income tax purposes equal to the
difference between the exercise price and the fair market value of the shares
acquired on the date of exercise, and the Holding Company, the Savings Bank or
the subsidiary of the Holding Company which is the employer of the option holder
will be entitled to federal and Illinois income tax deductions in the amount of
the ordinary income recognized by the option holder. In general, any further
gain or loss realized by the option holder on the subsequent disposition of such
shares will be long-term or short-term capital gain or loss, depending on the
length of time the shares are held after the option is exercised.

Upon receipt of stockholder approval to establish the Stock Option Plan,
the Board of Directors intends to reserve, out of the authorized but unissued
shares of Common Stock of the Holding Company, an amount of stock equal to 10%
of the Common Stock sold in the Conversion for issuance under the Stock Option
Plan (or between 9,350 shares and 12,650 shares, assuming the sale of between
93,500 shares and 126,500 shares of Common Stock in the Conversion). Under the
Plan and presently effective regulations and policies of the FDIC, the shares of
Common Stock for which options may be granted during the first year following
the Conversion may not exceed 10% of the total number of shares of Common Stock
sold in the Conversion. In general, any shares of Common Stock subject to
issuance upon exercise of options but which are not issued because of a
surrender, forfeiture, expiration, termination or cancellation of any such
option will once again be available for issuance pursuant to subsequently
granted options.

52
<PAGE>
The Committee will initially, and from time to time thereafter, select
those officers and other key employees of the Holding Company, the Savings Bank
or any of their subsidiaries to participate in the Stock Option Plan on the
basis of the special importance of their services in the management, development
and operations of the Holding Company, the Savings Bank or their subsidiaries.
Such officers and other key employees may receive either incentive stock options
or nonstatutory options under the Stock Option Plan. Unless expressly provided
otherwise at the time of the grant however, such officers and other key
employees will receive incentive stock options.

If the Stock Option Plan is implemented within the one year period
following consummation of the Conversion, options granted under the Stock Option
Plan will vest and become exercisable at a rate of 20% per year, commencing one
year after the grant date, and 20% on each anniversary date thereof for the
following four years. Notwithstanding such a five-year vesting schedule, all
awards will be 100% vested upon the death or disability of the recipient. If an
employee's employment terminates (or a director's service as a director
terminates) with the Savings Bank or the Holding Company for reasons other than
death, disability or retirement, the employee's unvested options will be
forfeited. Options held by nondirector optionees will continue to become
exercisable pursuant to the terms of the applicable option agreements in the
event of a nondirector's early or normal retirement as defined in the ESOP.
Options held by director optionees will continue to become vested pursuant to
the terms of the applicable option agreements in the event of a director's
retirement in accordance with the retirement policies of the Board of Directors.
Options granted under the Stock Option Plan may be exercisable for up to ten
years.

The exercise price of options granted under the Stock Option Plan must at
least equal the fair market value of the Common Stock subject to the option
(determined as provided in the Stock Option Plan) on the date the option is
granted.

An incentive stock option granted under the Stock Option Plan to an
employee owning more than 10% of the total combined voting power of all classes
of stock of the Holding Company is subject to the further restrictions that such
option must have an exercise price of at least 110% of the fair market value
(determined as of the date the option is granted) of the shares issuable on
exercise of the option and will expire, and all rights to purchase shares
thereunder will cease, no later than the fifth anniversary of the date the
incentive stock option was granted. Incentive stock options are subject to the
further restriction that the aggregate fair market value (determined as of the
date of grant) of stock as to which any such incentive stock option first
becomes exercisable in any calendar year is limited to $100,000. To the extent
options covering more than $100,000 worth of stock first become exercisable in
any one calendar year, the excess will be nonstatutory options.

The full exercise price for all shares purchased on exercise of options
granted under the Stock Option Plan may be paid in cash, in cash received from a
broker-dealer to whom the optionee has submitted an exercise notice consisting
of a fully endorsed option, by delivering shares of Common Stock having an
aggregate fair market value on the date of exercise equal to the exercise price,
by directing the Holding Company to withhold such number of shares of Common
Stock otherwise issuable upon exercise of such option having an aggregate fair
market value on the date of exercise equal to the exercise price, by such other
medium of payment, in the case of an officer or employee, as the Committee, in
its discretion, shall authorize at the time of grant, or by any combination of
the above.

If the Stock Option Plan is implemented within one year following
consummation of the Conversion, applicable regulations do not permit vesting on
options created under the plan at a rate greater than 20% per year, accelerated
vesting of stock options granted under a plan in the event of a change in
control or the granting of stock options to directors and officers in excess of
certain limits established by applicable regulations. If the Stock Option Plan
is implemented after the one year period following consummation of the
Conversion, subject to applicable regulatory requirements then in effect, the
Stock Option Plan described above may then provide for vesting in options at a
rate greater than 20% per year, accelerated vesting of previously granted
options in the event of a change in control of the Holding Company or the
Savings Bank and the grant of stock options to directors and officers in excess
of the limits that would have applied had the Stock Option Plan been implemented
within one year following consummation of the Conversion. A change in control
would be defined in the plan document and would generally occur when a person or
group of persons acting in concert acquires beneficial ownership of 20% or more
of any class
53
<PAGE>

of equity security of the Holding Company or the Savings Bank or, in the event
of a tender or exchange offer, merger or other form of business combination,
sale of all or substantially all of the assets of the Holding Company or the
Savings Bank or contested election of directors which resulted in the
replacement of a majority of the Board of Directors by persons not nominated by
the directors in office prior to the contested election.

The Board of Directors or the Committee has the authority to terminate,
suspend or amend the Stock Option Plan, in whole or in part, from time to time,
without the approval of the stockholders of the Holding Company to the extent
allowed by law; provided, however, that (i) no amendment will be effective until
approved by the stockholders of the Holding Company insofar as stockholder
approval thereof is required in order for the Stock Option Plan to continue to
satisfy the requirements of Rule 16b-3 under the Exchange Act, and (ii) the
provisions of the Stock Option Plan applicable to non-employee directors may not
be amended more than once every six months, except to comply with changes in the
Code or the rules and regulations thereunder. The Stock Option Plan provides
for appropriate adjustment in the number and kind of shares subject to the Stock
Option Plan, and the number, kind and per share exercise price of shares subject
to unexercised options, in the event of any change in the outstanding Common
Stock by reason of a stock split, stock dividend, combination or
reclassification of shares, recapitalization, merger or similar event.

Pursuant to the Plan of Conversion, if the Stock Option Plan is adopted
within one year following consummation of the Conversion, no individual may be
granted options to purchase more than 25% of the total shares covered by the
Stock Option Plan, and non-employee directors may not be granted options to
purchase more than 5% individually, or more than 30% as a group, of the shares
covered by the Stock Option Plan, unless the Commissioner and the FDIC allow
greater awards.

Although no specific award determinations have been made at this time, the
Holding Company and the Savings Bank anticipate that if stockholder approval is
obtained it would provide awards to its directors, officers and employees to the
extent and under terms and conditions permitted by applicable regulations. The
size of individual awards will be determined prior to submitting the Stock
Option Plan for stockholder approval, and disclosure of anticipated awards will
be included in the proxy materials for such meeting.

The shares used to fund the option awards will come from authorized but
unissued shares. As a result, in the event that all options under the Stock
Option Plan are awarded and exercised, the percentage interests of stockholders
as of the date the Conversion is consummated will be diluted by approximately
9%. If more or less than 110,000 shares of Common Stock are sold in the
Conversion, the number of options granted under the Stock Option Plan will be
adjusted to maintain the ratio of the awards intended to be made to the number
of shares sold at the midpoint of the Estimated Valuation Range. In the event
of a stock split, reverse stock split or stock dividend; the number of shares of
Common Stock reserved under the Stock Option Plan and the number of options
granted pursuant thereto and exercise price of the options will be adjusted to
reflect such increase or decrease in the total number of shares of Common Stock
outstanding.

MANAGEMENT RECOGNITION PLAN. The Board of Directors of the Holding Company
expects to approve the adoption of the MRP, subject to receipt of MRP
Stockholder Approval. The MRP may not, and will not, be established and become
effective unless and until MRP Stockholder Approval is obtained. The Board of
Directors of the Holding Company has approved the MRP as a method of providing
directors, officers and employees of the Holding Company and the Savings Bank
with a proprietary interest in the Holding Company and to encourage such persons
to remain with the Holding Company and the Savings Bank. If and when the
Holding Company receives stockholder approval to establish the MRP, the Holding
Company will contribute funds to the MRP to enable it to acquire shares of
Common Stock in an amount equal to up to 4% of the Common Stock sold in the
Conversion, or up to 4,400 shares of Common Stock assuming the sale of 110,000
shares at $10.00 per share (the midpoint of the Estimated Valuation Range). No
contributions by employees or recipients will be permitted. Under the Plan of
Conversion and present regulations and policies of the FDIC, the total number of
shares acquired by the MRP and by the ESOP during the first year following
consummation of the Conversion may not, in the aggregate, exceed 12% of the
total number of shares sold in the Conversion.

54
<PAGE>

The Plan of Conversion and applicable regulations and policies of the FDIC
prohibit the MRP from subscribing for shares of Common Stock in the Conversion
or otherwise being funded with shares of stock purchased in the Conversion.
Following consummation of the Conversion and MRP Stockholder Approval, the MRP
may purchase either outstanding shares of Common Stock in the open market at the
then market price of the Common Stock or authorized but previously unissued
shares of stock from the Holding Company (which the Holding Company intends to
reserve for issuance) at the then market price of the Common Stock. Assuming
that the MRP is funded entirely through purchases of authorized but previously
unissued shares of stock from the Holding Company, the percentage interest of
stockholders as of the date of such purchase will be diluted by approximately
4.0%.

The MRP will be administered by a committee appointed by the Board of
Directors of the Holding Company. Officers and employees of the Holding
Company, the Savings Bank and any of their subsidiaries as of the date of MRP
Stockholder Approval will be eligible for grants of shares of Common Stock of
the Holding Company held by the MRP. It is the intention of the Board of
Directors that each non-employee director as of the effective date of the MRP
will be granted 220 shares of Common Stock held by the MRP (based on 110,000
shares of Common Stock sold at the midpoint of the Estimated Valuation Range and
4,400 shares of Common Stock purchased by the MRP in the open market).
Recipients are not charged for grants made under the MRP. If the MRP is
implemented within the one year period following the Conversion, non-employee
directors, officers and employees become vested in shares of Common Stock
awarded to them under the MRP at a rate of 20% per year, commencing one year
after the grant date, and 20% on each anniversary date thereof for the following
four years. Notwithstanding such a five-year vesting schedule, all awards will
be 100% vested upon the death or disability of the recipient. If an employee's
employment terminates (or a director's service as a director terminates) with
the Savings Bank or the Holding Company for reasons other than death or
disability, the employee's unvested awards will be forfeited.

MRP award recipients will recognize taxable income equal to the fair market
value of the shares of Common Stock at the time such shares become vested.
Income recognized by MRP award recipients will be a deductible expense of the
Holding Company or the Savings Bank for tax purposes. When cash dividends are
paid with respect to plan shares vested and allocated to a recipient, such
recipient will be entitled to receive an amount equal to such cash dividend. No
recipient will have any voting or other rights of a stockholder with respect to
any plan shares awarded to such recipient prior to the time such shares are
actually distributed.

Pursuant to the Plan of Conversion, if the MRP is adopted within one year
following consummation of the Conversion, no individual may be awarded more than
25% of the total number of shares of Common Stock held by the MRP, and
nonemployee directors may not be awarded more than 5% individually, or more than
30% as a group, of the number of shares of Common Stock held by the MRP, unless
the Commissioner and the FDIC allow greater awards. Although no specific award
determinations have been made at this time, the Holding Company and the
Association anticipate that if stockholder approval is obtained it would provide
awards to its directors, officers and employees to the extent and under terms
and conditions permitted by applicable regulations. The size of individual
awards will be determined prior to submitting the MRP for stockholder approval,
and disclosure of anticipated awards will be included in the proxy materials for
such meeting.

If more or less than 110,000 shares of Common Stock are sold in the
Conversion, the number of MRP awards granted to directors, executive officers
and other employees of the Holding Company and Savings Bank will be adjusted to
maintain the ratio of the awards intended to be made to the number of shares
sold at the midpoint of the Estimated Valuation Range. In the event of a stock
split, reverse stock split or stock dividend, the number of shares of Common
Stock under the MRP will be adjusted to reflect such increase or decrease in the
total number of shares of Common Stock outstanding.

If the MRP is implemented within one year following consummation of the
Conversion, applicable regulations do not permit vesting in MRP awards at a rate
greater than 20% per year, accelerated vesting in MRP awards in the event of a
change in control or the grant of stock options to directors and officers in
excess of certain limits established by applicable regulations. If the MRP is
implemented after one year following consummation of the Conversion, subject to
applicable regulatory requirements then in effect, the MRP may then provide for
vesting in a MRP award

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at a rate greater than 20% per year, accelerated vesting of previous MRP awards
in the event of a change in control at the Holding Company or the Savings Bank
and the grant of MRP awards to directors and officers in excess of the limits
that would have applied had the MRP been implemented within one year following
consummation of the Conversion.A change in control is expected to be defined in
the plan document, to generally occur when a person or group of persons acting
in concert acquires beneficial ownership of 20% or more of a class of equity
securities of the Holding Company or the Savings Bank or in the event of a
tender or exchange offer, merger or other form of business combination, sale of
all or substantially all of the assets of the Holding Company or the Savings
Bank or contested election of directors which results in the replacement of a
majority of the Board of Directors by persons not nominated by the directors in
office prior to the contested election.

EMPLOYMENT AGREEMENTS

Upon the Conversion, the Savings Bank and the Holding Company each intend
to enter into an employment agreement with Mrs. Maralyn F. Heckman
(collectively, the "Employment Agreements"). The Employment Agreements are
intended to ensure that the Savings Bank and the Holding Company will be able to
maintain a stable and competent management base after the Conversion. The
continued success of the Savings Bank and the Holding Company depends to a
significant degree on the skills and competence of the above referenced officer.

The Employment Agreements provide for three-year terms for Mrs. Heckman's
employment. The term of the Employment Agreements will be automatically
extended on a daily basis unless written notice of non-renewal is given by the
Board of Directors or Mrs. Heckman. Therefore, on any day that Mrs. Heckman is
employed by the Savings Bank and the Holding Company, and assuming that neither
the Board of Directors nor Mrs. Heckman have provided prior notice of
non-renewal, the remaining term in Mrs. Heckman's employment agreements will be
three years. The Employment Agreements provide that Mrs. Heckman's base salary
will be reviewed annually. The base salary which will be effective for such
Employment Agreements for Mrs. Heckman will be her current salary, $40,000.00.
In addition to the base salary, the Employment Agreements provide for, among
other things, participation in stock benefits plans and other fringe benefits
applicable to executive personnel. The Employment Agreements provide for
termination by the Savings Bank or the Holding Company for cause, as defined in
the Employment Agreements, at any time. In the event the Savings Bank or the
Holding Company chooses to terminate Mrs. Heckman's employment for reasons other
than for cause, or in the event of Mrs. Heckman's resignation from the Savings
Bank and the Holding Company upon: (i) failure to re-elect Mrs. Heckman to her
current offices; (ii) a material change in Mrs. Heckman's functions, duties or
responsibilities; (iii) a relocation of Mrs. Heckman's principal place of
employment by more than 25 miles; (iv) a reduction in the benefits and
perquisites being provided to Mrs. Heckman in the Employment Agreements;
(v) liquidation or dissolution of the Savings Bank or the Holding Company; or
(vi) a breach of the Employment Agreement by the Savings Bank or the Holding
Company, Mrs. Heckman or, in the event of death, her beneficiary would be
entitled to receive an amount equal to the remaining base salary payments due to
Mrs. Heckman for the remaining term of the Employment Agreement and the
contributions that would have been made on Mrs. Heckman's behalf to any employee
benefit plans of the Savings Bank and the Holding Company during the remaining
term of the Employment Agreements. The Savings Bank and the Holding Company
would also continue to pay for Mrs. Heckman's life, health, dental and
disability coverage for the remaining term of the Employment Agreements. Upon
termination of Mrs. Heckman's employment, except upon a change in control,
Mrs. Heckman is subject to a one year non-competition clause.

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Employment Agreements provide for a severance payment in the event of a change
in control, Mrs. Heckman would only be entitled to receive a severance payment
under one agreement.

CERTAIN INDEBTEDNESS OF MANAGEMENT

The Savings Bank makes loans to executive officers and directors of the
Savings Bank and their affiliates, in the ordinary course of its business. Such
loans to executive officers, directors and their affiliates are made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time the transaction is originated for comparable transactions
with nonaffiliated persons and do not, in the opinion of the Savings Bank's
management, involve more than the normal risk of collectibility or present any
other unfavorable features. As of March 31, 1998, approximately $272,000 of
loans were outstanding from the Savings Bank to executive officers and directors
of the Savings Bank and their affiliates, which equals approximately 21.3% of
the Savings Bank's pro forma stockholders' equity at March 31, 1998, assuming
the sale of 110,000 shares at $10.00 per share, and approximately 31.2% of the
Savings Bank's retained earnings at March 31, 1998. Of the total loans
outstanding from the Savings Bank to officers and directors at March 31, 1998,
approximately $113,000 was outstanding to Dr. Sochor in connection with a
mortgage loan on his personal residence.

SUPERVISION AND REGULATION

GENERAL

Financial institutions and their holding companies are extensively
regulated under federal and state law by various regulatory authorities
including the Federal Reserve Board, the FDIC and the Commissioner. The
financial performance of the Holding Company and the Savings Bank may be
affected by such regulation, although the extent to which they may be affected
cannot be predicted with a high degree of certainty.

Federal and state laws and regulations generally applicable to financial
institutions and their holding companies regulate, among other things, the scope
of business, investments, reserves against deposits, capital levels relative to
operations, the nature and amount of collateral for loans, the establishment of
branches, mergers, consolidations and dividends. The system of supervision and
regulation applicable to the Holding Company and the Savings Bank establishes a
comprehensive framework for their operations and is intended primarily for the
protection of the FDIC's deposit insurance funds and the depositors of the
Savings Bank, rather than the stockholders of the Holding Company.

The following references to material statutes and regulations affecting the
Holding Company and the Savings Bank are brief summaries thereof and are
qualified in their entirety by reference to such statutes and regulations. Any
change in applicable law or regulations may have a material effect on the
business of the Holding Company and the Savings Bank.

THE SAVINGS BANK

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GENERAL. The Savings Bank is an Illinois-chartered savings bank, the
deposit accounts of which are insured by the SAIF of the FDIC. As a
SAIF-insured, Illinois-chartered savings bank, the Savings Bank is subject to
the examination, supervision, reporting and enforcement requirements of the
Commissioner, as the chartering authority for Illinois savings banks, and the
FDIC, as administrator of the SAIF, and to the statutes and regulations
administered by the Commissioner and the FDIC governing such matters as capital
standards, mergers, establishment of branch offices, subsidiary investments and
activities and general investment authority. The Savings Bank is required to
file reports with the Commissioner and the FDIC concerning its activities and
financial condition and will be required to obtain regulatory approvals prior to
entering into certain transactions, including mergers with, or acquisitions of,
other financial institutions.

The Commissioner and the FDIC have extensive enforcement authority over
Illinois-chartered savings banks, such as the Savings Bank. This enforcement
authority includes, among other things, the ability to issue cease-and-desist or
removal orders, to assess civil money penalties and to initiate injunctive
actions. In general, these enforcement actions may be initiated!for violations
of laws and regulations and unsafe and unsound practices.

The Commissioner has established a schedule for the assessment of
"supervisory fees" upon all Illinois savings banks to fund the operations of the
Commissioner. These supervisory fees are computed on the basis of each savings
bank's total assets (including consolidated subsidiaries) and are payable at the
end of each calendar quarter. A schedule of fees has also been established for
certain filings made by Illinois savings banks with the Commissioner. The
Commissioner also assesses fees for examinations conducted by the Commissioner's
staff, based upon the number of hours spent by the Commissioner's staff
performing the examination. During the fiscal year ended March 31, 1998, the
Savings Bank paid approximately $3,000 in supervisory fees and expenses.

CAPITAL REQUIREMENTS. Under the ISBA and the regulations of the
Commissioner, an Illinois savings bank must maintain a minimum level of total
capital equal to the higher of 3% of total assets or the amount required to
maintain insurance of deposits by the FDIC. The Commissioner has the authority
to require an Illinois savings bank to maintain a higher level of capital if the
Commissioner deems such higher level necessary based on the savings bank's
financial condition, history, management or earnings prospects.

FDIC-insured institutions are required to follow certain capital adequacy
guidelines which prescribe minimum levels of capital and require that
institutions meet certain risk-based and leverage capital requirements. Under
the FDIC capital regulations, an FDIC-insured institution is required to meet
the following capital standards: (i) "Tier 1 capital" in an amount not less
than 3% of average adjusted total assets; (ii) "Tier 1 capital" in an amount not
less than 4% of risk-weighted assets; and (iii) "total capital" in an amount not
less than 8% of risk-weighted assets.

FDIC-insured institutions in the strongest financial and managerial
condition (with a composite rating of "1" under the Uniform Financial
Institutions Rating System established by the Federal Financial Institutions
Examination Council) are required to maintain "Tier 1 capital" equal to at least
3% of total assets (the "leverage limit" requirement). For all other
FDIC-insured institutions, the minimum leverage limit requirement is 3% of total
assets plus at least an additional 100 to 200 basis points. Tier 1 capital is
defined to include the sum of common stockholders' equity, noncumulative
perpetual preferred stock (including any related surplus), and minority
interests in consolidated subsidiaries, minus all intangible assets (other than
qualifying servicing rights, qualifying purchased credit-card relationships and
qualifying supervisory goodwill), certain identified losses (as defined in the
FDIC's regulations) and investments in certain subsidiaries.

FDIC-insured institutions also are required to adhere to certain risk-based
capital guidelines which are designed to provide a measure of capital more
sensitive to the risk profiles of individual banks. Under the risk-based
capital guidelines, capital is divided into two tiers: core (Tier 1) capital,
as defined above, and supplementary (Tier 2) capital. Tier 2 capital that may
be recognized for risk-based capital purposes is limited to 100% of core capital
and includes cumulative perpetual preferred stock, perpetual preferred stock for
which the dividend rate is reset periodically based on current credit standing,
regardless of whether dividends are cumulative or non-cumulative, mandatory
convertible securities, subordinated debt, intermediate preferred stock and the
allowance for possible loan

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and lease losses. The allowance for possible loan and lease losses includable
in Tier 2 capital is limited to a maximum of 1.25% of risk-weighted assets.
Total capital is the sum of Tier 1 and Tier 2 capital. The risk-based capital
framework assigns balance sheet assets to one of four broad risk categories
which are assigned risk weighs ranging from 0% to 100% based primarily on the
degree of credit risk associated with the obligor. Off-balance sheet items are
converted to an on-balance sheet "credit equivalent" amount utilizing certain
conversion factors. The sum of the four risk-weighted categories equals risk
weighted assets. See "HISTORICAL AND PRO FORMA CAPITAL COMPLIANCE" for a
discussion of the Savings Bank's historical and pro forma capital position
relative to its capital requirements on March 31, 1998.

DIVIDENDS. Under the ISBA, dividends may only be declared when the total
capital of the Savings Bank is greater than that required by Illinois law.
Dividends may be paid by the Savings Bank out of its net profits (I.E., earnings
from current operations, plus actual recoveries on loans, investments and other
assets, after deducting all current expenses, including dividends or interest on
deposits, additions to reserves as required by the Commissioner, actual losses,
accrued dividends on preferred stock, if any, and all state and federal taxes).
The written approval of the Commissioner must be obtained, however, before a
savings bank having total capital of less than 6% of total assets may declare
dividends in any calendar year in an amount in excess of 50% of its net profits
for that calendar year. A savings bank may not declare dividends in excess of
its net profits in any year without the approval of the Commissioner. In
addition, before declaring a dividend on its capital stock, the Savings Bank
must transfer no less than 10% of its net profits of the preceding half year in
the case of quarterly or semi-annual dividends, or not less than 10% of the net
profits for the preceding two half year periods in the case of annual dividends
to its paid-in surplus until it shall have paid in surplus equal to its capital
stock. Finally, the Savings Bank will be unable to pay dividends in an amount
which would reduce its capital below the greater of (i) the amount required by
the FDIC, (ii) the amount required by the Commissioner or (iii) the amount
required for the liquidation account to be established by the Savings Bank in
connection with the Conversion. The Commissioner and the FDIC also have the
authority to prohibit the payment of any dividends by the Savings Bank if the
Commissioner or the FDIC determines that the distribution would constitute an
unsafe or unsound practice. For the calendar year ended March 31, 1998, the
Savings Bank's net profits were $41,872, and the Savings Bank could have paid
dividends totaling $41,872 without the written approval of the Commissioner and
continued to maintain compliance with its capital requirements.

STANDARDS FOR SAFETY AND SOUNDNESS. Federal law requires each federal
banking agency to prescribe for depository institutions under its jurisdiction
standards relating to, among other things: internal controls; information
systems and audit systems; loan documentation; credit underwriting; interest
rate risk exposure; asset growth; compensation; fees and benefits; and such
other operational and managerial standards as the agency deems appropriate. The
federal banking agencies adopted final regulations and Interagency Guidelines
Establishing Standards for Safety and Soundness (the "Guidelines") to implement
these safety and soundness standards. The Guidelines set forth the safety and
soundness standards that the federal banking agencies use to identify and
address problems at insured depository institutions before capital becomes
impaired. The Guidelines address internal controls and information systems,
internal audit system, credit underwriting, loan documentation, interest rate
risk exposure, asset growth, asset quality, earnings and compensation, and fees
and benefits. If the appropriate federal banking agency determines that an
institution fails to meet any standard prescribed by the Guidelines, the agency
may require the institution to submit to the agency an acceptable plan to
achieve compliance with the standard.

BROKERED DEPOSITS. FDIC regulations govern the acceptance of brokered
deposits by insured financial institutions. Well-capitalized insured financial
institutions that are not troubled are not subject to brokered deposit
limitations. Adequately-capitalized insured financial institutions are able to
accept, renew or roll over brokered deposits but only (i) with a waiver from the
FDIC and (ii) subject to the limitation that they do not pay an effective yield
on any such deposit that exceeds by more than 75 basis points (a) the effective
yield paid on deposits of comparable size and maturity in such association's
normal market area for deposits accepted in its normal market area or (b) the
national prime rate paid on deposits of comparable size and maturity for
deposits accepted outside the institution's normal market area.
Undercapitalized insured financial institutions are not permitted to accept
brokered deposits and may not solicit deposits by offering an effective yield
that exceeds by more than 75 basis points the prevailing effective yields on
insured deposits of comparable maturity in the institution's normal market area
or in
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the market area in which such deposits are being solicited. The Savings Bank is
not presently soliciting brokered deposits.

LENDING RESTRICTIONS. Under the ISBA, the Savings Bank is prohibited from
making secured or unsecured loans for business, corporate, commercial or
agricultural purposes representing in the aggregate an amount in excess of 15%
of its total assets, unless the Commissioner authorizes in writing a higher
percentage limit for such loans upon the request of an institution.

The Savings Bank is also subject to a loans-to-one borrower limitation.
Under the ISBA, the total loans and extensions of credit, both direct and
indirect, by the Savings Bank to any person (other than the United States or its
agencies, the State of Illinois or its agencies, and any municipal corporation
for money borrowed) outstanding at one time must not exceed the greater of
$500,000 or 20% of the Savings Bank's total capital plus general loan loss
reserves. In addition, the Savings Bank may make loans in an amount equal to an
additional 10% of the Savings Bank's capital plus general loan loss reserves if
the loans are 100% secured by readily marketable collateral.

The FDIC and the other federal banking agencies have adopted regulations
that prescribe standards for extensions of credit that (i) are secured by real
estate or (ii) are made for the purpose of financing the construction or
improvements on real estate. The FDIC regulations require each institution to
establish and maintain written internal real estate lending standards that are
consistent with safe and sound banking practices and appropriate to the size of
the institution and the nature and scope of its real estate lending activities.
The standards also must be consistent with accompanying FDIC guidelines, which
include loan-to-value limitations for the different types of real estate loans.
Institutions are also permitted to make a limited amount of loans that do not
conform to the proposed loan-to-value limitations os long as such exceptions are
reviewed and justified appropriately. The guidelines also list a number of
lending situations in which exceptions to the loan-to-value standard are
justified.

PROMPT CORRECTIVE REGULATORY ACTION. Federal law requires, among other
things, that federal bank regulatory authorities take "prompt corrective action"
with respect to banks that do not meet minimum capital requirements. For these
purposes, the law establishes five capital categories: well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized, and
critically undercapitalized.

The FDIC has adopted regulations to implement the prompt corrective action
legislation. Among other things, the regulations define the relevant capital
measures for the five capital categories. An institution is deemed to be "well
capitalized" if it has a total risk-based capital ratio of 10% or greater, a
Tier I risk-based capital ratio of 6% or greater, and a leverage ratio of 5% or
greater, and is not subject to a regulatory order, agreement or directive to
meet and maintain a specific capital level for any capital measure. An
institution is deemed to be "adequately capitalized" if it has a total
risk-based capital ratio of 8% or greater, a Tier I risk-based capital ratio of
4% or greater, and generally a leverage ratio of 4% or greater. An institution
is deemed to be "undercapitalized" if it has a total risk-based capital ratio of
less than 8%, a Tier I risk-based capital ratio of less than 4%, or generally a
leverage ratio of less than 4%. An institution is deemed to be "significantly
undercapitalized" if it has a total risk-based capital ratio of less than 6%, a
Tier I risk-based capital ratio of less than 3%, or a leverage ratio of less
than 3%. An institution is deemed to be "critically undercapitalized" if it has
a ratio of tangible equity (as defined in the regulations) to total assets that
is equal to or less than 2%.

"Undercapitalized" banks are subject to growth, capital distribution
(including dividend) and other limitations and are required to submit a capital
restoration plan. A bank's compliance with such plan is required to be
guaranteed by any company that controls the undercapitalized institutions in an
amount equal to the lesser of 5.0% of the Savings Bank's total assets when
deemed undercapitalized or the amount necessary to achieve the status of
adequately capitalized. If an "undercapitalized" bank fails to submit an
acceptable plan, it is treated as if it is "significantly undercapitalized."
"Significantly undercapitalized" banks are subject to one or more of a number of
additional restrictions, including but not limited to an order by the FDIC to
sell sufficient voting stock to become adequately capitalized, requirements to
reduce total assets and cease receipt of deposits from correspondent banks or
dismiss directors or officers, and restrictions on interest rates paid on
deposits, compensation of executive officers and capital

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distributions by the parent holding company. "Critically undercapitalized"
institutions also may not, beginning 60 days after becoming "critically
undercapitalized," make any payment of principal or interest on certain
subordinated debt or extend credit for a highly leveraged transaction or enter
into any material transaction outside the ordinary course of business. In
addition, "critically undercapitalized" institutions are subject to appointment
of a receiver or conservator. Generally, subject to a narrow exception, the
appointment of a receiver or conservator is required for a "critically
undercapitalized" institution within 270 days after it obtains such status.

TRANSACTIONS WITH AFFILIATES. Under current federal law, transactions
between depository institutions and their affiliates are governed by
Sections 23A and 23B of the Federal Reserve Act. An affiliate of a savings bank
is any company or entity that controls, is controlled by, or is under common
control with the savings bank, other than a subsidiary. In a holding company
context, at a minimum, the parent holding company of a savings bank and any
companies which are controlled by such parent holding company are affiliates of
the savings bank. Generally, Section 23A limits the extent to which the savings
bank or its subsidiaries may engage in "covered transactions" with any one
affiliate to an amount equal to 10% of such savings bank's capital stock and
surplus, and contains an aggregate limit on all such transactions with all
affiliates to an amount equal to 20% of such capital stock and surplus. The
term "covered transaction" includes the making of loans or other extensions of
credit to an affiliate; the purchase of assets from an affiliate; the purchase
of, or an investment in, the securities of an affiliate; the acceptance of
securities of an affiliate as collateral for a loan or extension of credit to
any person; or issuance of a guarantee, acceptance, or letter of credit on
behalf of an affiliate. Section 23A also establishes specific collateral
requirements for loans or extensions of credit to, or guarantees, acceptances on
letters of credit issued on behalf of an affiliate. Section 23B requires that
covered transactions and a broad list of other specified transactions be on
terms substantially the same, or no less favorable, to the savings bank or its
subsidiary as similar transactions with nonaffiliates.

Further, Section 22(h) of the Federal Reserve Act restricts a savings bank
with respect to loans to directors, executive officers, and principal
stockholders. Under Section 22(h), loans to directors, executive officers and
stockholders who control, directly or indirectly, 10% or more of voting
securities of a savings bank, and certain related interests of any of the
foregoing, may not exceed, together with all other outstanding loans to such
persons and affiliated entities, the savings bank's total capital and surplus.
Section 22(h) also prohibits loans above amounts prescribed by the appropriate
federal banking agency to directors, executive officers, and shareholders who
control 10% or more of voting securities of a stock savings bank, and their
respective related interests, unless such loan is approved in advance by a
majority of the board of directors of the savings bank. Any "interested"
director may not participate in the voting. The loan amount (which includes all
other outstanding loans to such person and their related interests) as to which
such prior board of director approval is required, is the greater of $25,000 or
5% of capital and surplus or any loans over $500,000. Further, pursuant to
Section 22(h), loans to directors, executive officers and principal shareholders
must be made on terms substantially the same as offered in comparable
transactions to other persons, except that such insiders may receive
preferential loans made pursuant to a benefit or compensation program that is
widely available to the Savings Bank's employees and does not give preference to
the insider over other employees. Section 22(g) of the Federal Reserve Act
places additional limitations on loans to executive officers.

ENFORCEMENT. The Commissioner and FDIC have extensive enforcement
authority over Illinois-chartered savings banks, including the Savings Bank.
This enforcement authority includes, among other things, the ability to assess
civil money penalties, to issue cease and desist orders and to remove directors
and officers. In general, these enforcement actions may be initiated in
response to violations of laws and regulations and to unsafe or unsound
practices.

The Commissioner is given authority by Illinois law to appoint a
conservator or receiver for an Illinois savings bank under certain circumstances
including, but not limited to, insolvency, a substantial dissipation of assets
due to violation of law, regulation, order of the Commissioner or due to any
unsafe or unsound practice, or the occurrence of an unsafe or unsound condition
likely to cause insolvency or a substantial dissipation of assets or earnings
that will weaken the condition of the savings bank and prejudice the interests
of depositors. The FDIC also has authority under federal law to appoint a
conservator or receiver for an insured

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savings bank under certain circumstances. The FDIC is required, with certain
exceptions, to appoint a receiver or conservator for an insured state savings
bank if that savings bank was "critically undercapitalized" on average during
the calendar quarter beginning 270 days after the date on which the savings bank
became "critically undercapitalized." For this purpose, "critically
undercapitalized" means having a ratio of tangible capital to total assets of
less than 2%. See "- Prompt Corrective Regulatory Action." The FDIC may also
appoint itself as conservator or receiver for a state savings bank under certain
circumstances on the basis of the institution's financial condition or upon the
occurrence of certain events, including: (i) insolvency (whereby the assets of
the savings bank are less than its liabilities to depositors and others);
(ii) substantial dissipation of assets or earnings through violations of law or
unsafe or unsound practices; (iii) existence of an unsafe or unsound condition
to transact business; (iv) likelihood that the savings bank will be unable to
meet the demands of its depositors or to pay its obligations in the normal
course of business; and (v) insufficient capital, or the incurring or likely
incurring of losses that will deplete substantially all of the institution's
capital with no reasonable prospect of replenishment of capital without federal
assistance.

INSURANCE OF DEPOSIT ACCOUNTS. Deposits of the Savings Bank are presently
insured by the SAIF. The SAIF and the Bank Insurance Fund (the "BIF") are
required by law to achieve and maintain a ratio of insurance reserves to total
insured deposits equal to 1.25% percent. The BIF reached this required reserve
ratio during 1995, while some predictions indicated the SAIF would not reach
this target until the year 2002. The SAIF had not grown as quickly as the BIF
for many reasons, but in large part because almost half of SAIF premiums had to
be used to retire bonds issued by the Financing Corporation ("FICO Bonds") in
the late 1980s to recapitalize the Federal Savings and Loan Insurance
Corporation.

Until 1995, the SAIF and BIF deposit insurance premium rate schedules had
been identical. But in mid-1995, the FDIC issued final rules modifying its
assessment rate schedules for SAIF and BIF member institutions. Under the
revised schedule, SAIF members continued to pay assessments ranging from $0.23
to $0.31 per $100 of deposits, while BIF members paid assessments ranging from
zero to $0.27 per $100 of deposits, but the majority of BIF members paid only
the $2,000 minimum annual premium. Thrift industry representatives argued that
this significant premium differential caused savings associations to operate at
a competitive disadvantage to their BIF insured bank counterparts.

On September 30, 1996, President Clinton signed the Deposit Insurance Funds
Act of 1996 ("DIFA") which among other things, imposed a special assessment of
65.7 basis points on SAIF assessable deposits held as of March 31, 1995, payable
November 27, 1996. As a result of the DIFA and the special assessment, the FDIC
has lowered the SAIF assessment to the current rate of 0 to 27 basis points.

The amount each insured depository institution pays for FDIC deposit
insurance coverage is determined in accordance with a risk-based assessment
system under which all insured depository institutions are placed into one of
nine categories and assessed insurance premiums based upon their level of
capital and supervisory evaluation. SAIF member institutions classified as
well-capitalized and considered healthy pay the lowest premium (currently 0% of
deposits) while SAIF member institutions that are undercapitalized and of
substantial supervisory concern pay the highest premium (currently up to .27% of
deposits).

FICO BOND PAYMENTS. The DIFA also amended the Federal Home Loan Bank Act
to impose the assessment for the payment of the FICO Bonds against both SAIF and
BIF deposits beginning in 1997. As of January 1, 1997, BIF deposits are
assessed for FICO payments at a rate that is 20% of the rate assessed on SAIF
deposits. The FICO assessment rate on BIF and SAIF deposits will be the same
beginning on the earlier of January 1, 2000 or the date the BIF and SAIF are
merged.

THRIFT RECHARTERING LEGISLATION. The DIFA provides that the BIF and SAIF
will be merged on January 1, 1999, provided no savings associations remain at
that time. It is possible that legislation will be enacted in Congress
eliminating the savings association charter. However, the Savings Bank is
unable to predict whether the SAIF and the BIF will be merged and what impact,
if any, such merger could have on the Savings Bank.

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FEDERAL RESERVE SYSTEM. The Federal Reserve Board regulations require
depository institutions to maintain non-interest-earning reserves against their
transaction accounts (primarily NOW and regular checking accounts). The Federal
Reserve Board regulations generally require that reserves be maintained against
aggregate transaction accounts as follows: for that portion of transaction
accounts aggregating $47.8 million or less (subject to adjustment by the Federal
Reserve Board) the reserve requirement is 3%; and for accounts greater than
$47.8 million, the reserve requirement is $1.43 million plus 10% (subject to
adjustment by the Federal Reserve Board between 8% and 14%) against that portion
of total transaction accounts in excess of $47.8 million. The first
$4.7 million of otherwise reservable balances (subject to adjustments by the
Federal Reserve Board) are exempted from the reserve requirements. The Savings
Bank is in compliance with the foregoing requirements. Because required
reserves must be maintained in the form of either vault cash, a
non-interest-bearing account at a Federal Reserve Bank or a pass-through account
as defined by the Federal Reserve Board, the effect of this reserve requirement
is to reduce the Savings Bank's interest-earning assets. Federal Home Loan Bank
("FHLB") System members are also authorized to borrow from the Federal Reserve
"discount window," but Federal Reserve Board regulations require institutions to
exhaust all FHLB sources before borrowing from a Federal Reserve Bank.

COMMUNITY REINVESTMENT ACT. Under the Community Reinvestment Act, as
amended ("CRA"), as implemented by FDIC regulations, a savings bank has a
continuing and affirmative obligation consistent with its safe and sound
operation to help meet the credit needs of its entire community, including low
and moderate income neighborhoods. The CRA does not establish specific lending
requirements or programs for financial institutions nor does it limit an
institution's discretion to develop the types of products and services that it
believes are best suited to its particular community, consistent with the CRA.
The CRA requires the FDIC, in connection with its examination of a savings
institution, to assess the institution's record of meeting the credit needs of
its community and to take such record into account in its evaluation of certain
applications by such institution. The FDIC is required to provide a written
evaluation of an institution's CRA performance utilizing a four-tiered
descriptive rating system and an institution's rating is subject to public
disclosure. The Savings Bank's latest CRA rating, received from the FDIC was
"Satisfactory."

FEDERAL HOME LOAN BANK SYSTEM. The Savings Bank is a member of the FHLB
System, which consists of 12 regional FHLBs. The FHLB provides a central credit
facility primarily for member institutions. The Savings Bank, as a member of
the FHLB of Chicago, is required to acquire and hold shares of capital stock in
that FHLB in an amount at least equal to 1% of the aggregate principal amount of
its unpaid residential mortgage loans and similar obligations at the beginning
of each year, or 1/20 of its advances (borrowings) from the FHLB of Chicago,
whichever is greater. The Savings Bank was in compliance with this requirement
with an investment in FHLB of Chicago stock at March 31, 1998, of $46,000. FHLB
advances must be secured by specified types of collateral and all long-term
advances may only be obtained for the purpose of providing funds for residential
housing financing. At March 31, 1998, the Savings Bank had $600,000 in FHLB
advances.

THE HOLDING COMPANY

GENERAL. Upon consummation of the Conversion, the Holding Company will
become the sole stockholder of the Savings Bank. As such, the Holding Company
will be a bank holding company. As a bank holding company, the Holding Company
will be required to register with, and will become subject to regulation by, the
Federal Reserve Board under the BHCA. In accordance with Federal Reserve Board
policy, the Holding Company will be expected to act as a source of financial
strength to the Savings Bank and to commit resources to support the Savings Bank
in circumstances where the Holding Company might not do so absent such policy.
Under the BHCA, the Holding Company will be subject to periodic examination by
the Federal Reserve Board and will be required to file periodic reports of its
operations and such additional information as the Federal Reserve Board may
require. Because the Savings Bank is chartered under Illinois law, the Holding
Company will also be subject to registration with, and regulation by, the
Commissioner under the ISBA.

The BHCA requires prior Federal Reserve Board approval for, among other
things, the acquisition by a bank holding company of direct or indirect
ownership or control of more than five percent of the voting shares or

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substantially all the assets of any bank or bank holding company, or for a
merger or consolidation of a bank holding company with another bank holding
company. With certain exceptions, the BHCA prohibits a bank holding company
from acquiring direct or indirect ownership or control of voting shares of any
company which is not a bank or bank holding company and from engaging directly
or indirectly in any activity other than banking or managing or controlling
banks or performing services for its authorized subsidiaries. A bank holding
company may, however, engage in or acquire an interest in a company that engages
in activities which the Federal Reserve Board has determined by regulation or
order to be so closely related to banking or managing or controlling banks as to
be a proper incident thereto.

A bank holding company is a legal entity separate and distinct from its
subsidiary bank or banks. Normally, the major source of a holding company's
revenue is dividends a holding company receives from its subsidiary banks. The
right of a bank holding company to participate as a stockholder in any
distribution of assets of its subsidiary banks upon their liquidation or
reorganization or otherwise is subject to the prior claims of creditors of such
subsidiary banks. The subsidiary banks are subject to claims by creditors for
long-term and short-term debt obligations, including substantial obligations for
federal funds purchased and securities sold under repurchase agreements, as well
as deposit liabilities. Under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, in the event of a loss suffered by the FDIC in
connection with a banking subsidiary of a bank holding company (whether due to a
default or the provision of FDIC assistance), other banking subsidiaries of the
holding company could be assessed for such loss.

Federal laws limit the transfer of funds by a subsidiary bank to its
holding company in the form of loans or extensions of credit, investments or
purchases of assets. Transfers of this kind are limited to ten percent of a
bank's capital and surplus with respect to each affiliate and to twenty percent
to all affiliates in the aggregate, and are also subject to certain collateral
requirements. These transactions, as well as other transactions between a
subsidiary bank and its holding company, must also be on terms substantially the
same as, or at least as favorable as, those prevailing at the time for
comparable transactions with non-affiliated companies or, in the absence of
comparable transactions, on terms or under circumstances, including credit
standards, that would be offered to, or would apply to, non-affiliated
companies.

CAPITAL REQUIREMENTS. The Federal Reserve Board has adopted capital
adequacy guidelines for bank holding companies (on a consolidated basis)
substantially similar to those of the FDIC for the Savings Bank. On a pro forma
basis assuming consummation of the Conversion, the Holding Company's pro forma
Tier 1 and total capital would exceed the Federal Reserve Board's capital
adequacy requirements.

INTERSTATE BANKING AND BRANCHING

Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Riegle-Neal Act"), since September 29, 1995, the Federal Reserve
Board is permitted, under specified circumstances to approve the acquisition by
a bank holding company located in one state of a bank or a bank holding company
located in another state, without regard to any prohibition contained in state
law.

The Riegle-Neal Act permits states to require that a target bank have been
in operation for a minimum period, up to five years, and to impose
non-discriminatory limits on the percentage of the total amount of deposits with
insured depository institutions in the state which may be controlled by a single
bank or bank holding company. In addition, the Riegle-Neal Act imposes federal
deposit concentration limits (10% of nationwide total deposits, and 30% of total
deposits in the host state on applications subsequent to the applicant's initial
entry to the host state), and adds new statutory conditions to Federal Reserve
Board approval, I.E., the applicant meets or exceeds all applicable federal
regulatory capital standards and is "adequately managed."

The Riegle-Neal Act also authorized, effective June 1, 1997, the
responsible federal banking agency to approve applications for mergers of
depository institutions across state lines without regard to whether such
activity is contrary to state law. Any state could, however, by adoption of a
non-discriminatory law after September 29, 1994

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and before June 1, 1997, either elect to have this provision take effect before
June 1, 1997 or opt-out of the provision. The effect of opting out is to
prevent banks chartered by, or having their main office located in, such state
from participating in any interstate branch merger. Each state is permitted to
retain a minimum age requirement of up to five years, a non-discriminatory
deposit cap, and non-discriminatory notice or filing requirements. The
responsible federal agency will apply the same federal concentration limits and
capital management adequacy requirements noted above with respect to BHCA
applications. Only Texas opted-out of the interstate merger provision.

While Illinois adopted legislation to opt-in to the interstate merger
provision, unlike some states and as permitted by federal law, Illinois law does
not authorize the establishment of de novo branches or the purchase by an
out-of-state bank of one or more branches of a bank with its main office in
Illinois. Since the laws of the various states which do authorize de novo
branches or branch purchases normally have reciprocity provisions, Illinois
state-chartered banks generally are not able to establish or acquire branches in
other states except through the merger with a bank in another state.

Branches acquired in a host state by both out-of-state state-chartered and
national banks will be subject to community reinvestment, consumer protection,
fair lending and interstate branching laws of the host state to the same extent
as branches of a national bank having its main office in the host state. Among
other things, the Riegle-Neal Act also preserves state taxation authority,
prohibits the operation by out-of-state banks of interstate branches as deposit
production offices, imposes additional notice requirements upon interstate banks
proposing to close branch offices in a low or moderate-income area, and creates
new Community Reinvestment Act evaluation requirements for interstate depository
institutions.

FEDERAL AND STATE TAXATION

FEDERAL TAXATION

GENERAL. The Holding Company and the Savings Bank are subject to the
corporate tax provisions of the Code, as well as certain additional provisions
of the Code, which apply to thrift and other types of financial institutions.
The following discussions of tax matters is intended only as a summary and does
not purport to be a comprehensive description of the tax rules applicable to the
Holding Company and the Savings Bank.

FISCAL YEAR. The Holding Company will file its federal income tax return
on a March 31 year-end basis.

METHOD OF ACCOUNTING. The Savings Bank maintains its books and records for
federal income tax purposes using the cash method of accounting. The cash
method of accounting generally requires that items of income be recognized when
cash is received, and that items of expense be recorded when cash is paid.

BAD DEBT RESERVES. Savings institutions, such as the Savings Bank, which
meet certain definitional tests primarily relating to their assets and the
nature of their businesses, are permitted to establish a reserve for bad debts
and to make annual additions to the reserve. These additions may, within
specified formula limits, be deducted in arriving at the institution's taxable
income. For purposes of computing the deductible addition to its bad debt
reserve, the institution's loans are separated into "qualifying real property
loans" (i.e., generally those loans secured by certain interests in real
property) and all other loans ("non-qualifying loans"). The deduction with
respect to non-qualifying loans must be computed under the experience method as
described below. The following formulas may be used to compute the bad debt
deduction with respect to qualifying real property loans: (i) actual loss
experience, or (ii) a percentage of taxable income. Reasonable additions to the
reserve for losses on non-qualifying loans must be based upon actual loss
experience and would reduce the current year's addition to the reserve for
losses on qualifying real property loans, unless that addition is also
determined under the experience method. The sum of the additions as to each
reserve for each year is the institution's annual bad debt deduction.

Under the experience method, the deductible annual addition to the
institution's bad debt reserves is the amount necessary to increase the balance
of the reserve at the close of the taxable year to the greater of (a) the amount

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which bears the same ratio to loans outstanding at the close of the taxable year
as the total net bad debts sustained during the current and five preceding
taxable years bear to the sum of the loans outstanding at the close of the six
years, or (b) the lower of (i) the balance of the reserve account at the close
of the Savings Bank's "base year," which was its tax year ended March 31, 1988,
or (ii) if the amount of loans outstanding at the close of the taxable year is
less than the amount of loans outstanding at the close of the base year, the
amount which bears the same ratio to loans outstanding at the close of the
taxable year as the balance of the reserve at the close of the base year bears
to the amount of loans outstanding at the close of the base year.

Under the percentage of taxable income method, the bad debt deduction
equals 8% of taxable income determined without regard to that deduction and with
certain adjustments. The availability of the percentage of taxable income
method permits a qualifying savings institution to be taxed at a lower effective
Federal income tax rate than that applicable to corporations in general. This
resulted generally in an effective Federal income tax rate payable by a
qualifying savings institution fully able to use the maximum deduction permitted
under the percentage of taxable income method, in the absence of other factors
affecting taxable income, of 31.3% exclusive of any minimum tax or environmental
tax (as compared to 34% for corporations generally). For tax years beginning on
or after January 1, 1993, the maximum corporate tax rate was increased to 35%,
which increased the maximum effective federal income tax rate payable by a
qualifying savings institution fully able to use the maximum deduction to 32.2%.
Any savings institution at least 60% of whose assets are qualifying assets as
described in the Code, will generally be eligible for the full deduction of 8%
of taxable income. As of April 30, 1996, 99.86% of the assets of the Savings
Bank were "qualifying assets" as defined in the Code and the Savings Bank
anticipates that at least 60% of its assets will continue to be qualifying
assets in the immediate future. If this ceases to be the case, the institution
may be required to restore some portion of its bad debt reserve to taxable
income in the future.

Under the percentage of taxable income method, the bad debt deduction for
an addition to the reserve for qualifying real property loans cannot exceed the
amount necessary to increase the balance in this reserve to an amount equal to
6% of such loans outstanding at the end of the taxable year. The bad debt
deduction is also limited to the amount which, when added to the addition to the
reserve for losses on non-qualifying loans, equals the amount by which 12% of
deposits at the close of the year exceeds the sum of surplus, undivided profits
and reserves at the beginning of the year. Based on experience, it is not
expected that these restrictions will be a limiting factor for the Savings Bank
in the foreseeable future. In addition, the deduction for qualifying real
property loans is reduced by an amount equal to all or part of the deduction for
non-qualifying loans.

At March 31, 1998, the Federal income tax reserves of the Savings Bank
included $125 thousand for which no Federal income tax has been provided.
Because of these Federal income tax reserves and the liquidation account to be
established for the benefit of certain depositors of the Savings Bank in
connection with the conversion of the Savings Bank to stock form, the retained
earnings of the Savings Bank are substantially restricted.

Pursuant to certain legislation which was recently enacted and which is
effective for tax years beginning after 1995, a small thrift institution (one
with an adjusted basis of assets of less than $500 million), such as the Savings
Bank, no longer is permitted to make additions to its tax bad debt reserve under
the percentage of taxable income method. Such institutions are permitted to use
the experience method in lieu of deducting bad debts only as they occur. Such
legislation requires the Savings Bank to realize increased tax liability over a
period of at least six years, beginning in 1996. Specifically, the legislation
requires a small thrift institution to recapture (i.e., take into income) over a
multi-year period the balance of its bad debt reserves in excess of the lesser
of (i) the balance of such reserves as of the end of its last taxable year
ending before 1988 or (ii) an amount that would have been the balance of such
reserves had the institution always computed its additions to its reserves using
the experience method. The recapture requirement is suspended for each of two
successive taxable years beginning January 1, 1996 in which the Bank originates
an amount of certain kinds of residential loans which in the aggregate are equal
to or greater than the average of the principal amounts of such loans made by
the Savings Bank during its six taxable years preceding 1996. It is anticipated
that any recapture of the Savings Bank's bad debt reserves accumulated after
1987 would not have a material adverse effect on the Savings Bank's financial
condition and results of operations. As of March 31, 1998, the Savings Bank's
accumulated bad debt reserves after 1987 amounted to $12,602.

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DISTRIBUTIONS. If the Savings Bank were to distribute cash or property to
its sole stockholder, and the distribution was treated as being from its
accumulated bad debt reserves, the distribution would cause the Savings Bank to
have additional taxable income. A distribution is deemed to have been made from
accumulated bad debt reserves to the extent that (a) the reserves exceed the
amount that would have been accumulated on the basis of actual loss experience,
and (b) the distribution is a "non-qualified distribution." A distribution with
respect to stock is a non-qualified distribution to the extent that, for federal
income tax purposes, (i) it is in redemption of shares, (ii) it is pursuant to a
liquidation of the institution, or (iii) in the case of a current distribution,
together with all other such distributions during the taxable year, it exceeds
the institution's current and post-1951 accumulated earnings and profits. The
amount of additional taxable income created by a non-qualified distribution is
an amount that when reduced by the tax attributable to it is equal to the amount
of the distribution.

MINIMUM TAX. The Code imposes an alternative minimum tax at a rate of 20%.
The alternative minimum tax generally applies to a base of regular taxable
income plus certain tax preferences ("alternative minimum taxable income" or
"AMTI") and is payable to the extent that tax calculated on AMTI in excess of an
exemption amount exceeds the regular tax liability. The Code provides that an
item of tax preference is the excess of the bad debt deduction allowable for a
taxable year pursuant to the percentage of taxable income method over the amount
allowable under the experience method. Other items of tax preference that
constitute AMTI include (a) tax-exempt interest on newly issued (generally,
issued on or after August 8, 1986) private activity bonds other than certain
qualified bonds and (b) 75% of the excess (if any) of (i) adjusted current
earnings as defined in the Code, over (ii) AMTI (determined without regard to
this preference and prior to reduction by net operating losses).

NET OPERATING LOSS CARRYOVERS. A financial institution may carry back net
operating losses ("NOLs") to the preceding two taxable years and forward to the
succeeding twenty taxable years. This provision applies to losses incurred in
taxable years beginning after August 5, 1997. At March 31, 1998, the Savings
Bank had no NOL carryforwards for Federal income tax purposes.

AUDIT BY THE IRS. The Savings Bank's Federal income tax returns for
taxable years through March 31, 1994 have been closed for the purpose of
examination by the Internal Revenue Service (the "IRS").

STATE AND LOCAL TAXATION

STATE OF ILLINOIS. The Holding Company and the Savings Bank will file
Illinois income tax returns. For Illinois income tax purposes, they are taxed
at an effective rate equal to 7.2% of Illinois Taxable Income. For these
purposes, "Illinois Taxable Income" generally means federal taxable income,
subject to certain adjustments (including the addition of interest income on
state and municipal obligations and the exclusion of interest income on United
States Treasury obligations). The exclusion of income on United States Treasury
obligations has the effect of reducing Illinois Taxable Income. The Holding
Company is also required to file an annual report with and pay an annual
franchise tax to the State of Illinois.

DELAWARE TAXATION. As a Delaware holding company not earning income in
Delaware, the Holding Company is exempt from Delaware corporate income tax but
is required to file an annual report with and pay an annual franchise tax to the
State of Delaware.

THE CONVERSION

THE BOARD OF DIRECTORS OF THE SAVINGS BANK AND THE COMMISSIONER HAVE APPROVED
THE PLAN SUBJECT TO APPROVAL BY THE MEMBERS OF THE SAVINGS BANK AND TO
SATISFACTION OF CERTAIN OTHER CONDITIONS. THE PLAN HAS ALSO BEEN REVIEWED BY
THE FDIC, WHICH HAS ISSUED A NOTICE OF ITS INTENT NOT TO OBJECT TO THE
CONVERSION, SUBJECT TO SATISFACTION OF CERTAIN CONDITIONS. COMMISSIONER
APPROVAL AND THE ABSENCE OF FDIC OBJECTION DOES NOT CONSTITUTE A RECOMMENDATION
OR ENDORSEMENT OF THE PLAN BY THE COMMISSIONER, OR THE FDIC, RESPECTIVELY.

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GENERAL

The Board of Directors of the Savings Bank adopted the Plan on March 11,
1998 and amendments to the Plan of Conversion on May 26, 1998 and on July
16, 1998. The Plan was adopted subject to approval by the Commissioner, to
receipt of notice from the FDIC of its intent not to object to the
Conversion, and to approval of the members of the Savings Bank holding not
less than a majority of the votes outstanding as of the record date fixed
for the Special Meeting and who continue to be members on the date of the
Special Meeting. Pursuant to the Plan, the Savings Bank will be converted
from an Illinois-chartered mutual savings bank to an Illinois-chartered stock
savings bank and will become a wholly-owned subsidiary of the Holding
Company; and the Holding Company will issue the Common Stock to be sold in
the Offerings and will use 50% of the net proceeds of the sale of the Common
Stock, less the amount necessary to finance the ESOP's purchase of Common
Stock in the Conversion, to purchase the capital stock of the converted
Savings Bank. On August 7, 1998, the Commissioner approved the Savings
Bank's Application for Approval of Conversion, subject to the receipt by the
Savings Bank and the Holding Company of all other required regulatory
approvals and compliance with all other outstanding legal requirements. On
August 3, 1998, the FDIC issued a letter to the Savings Bank stating it does
not object to the Conversion, subject to the satisfaction of certain
conditions, including approval of the Plan of Conversion by the Savings
Bank's members and the receipt by the FDIC of an updated appraisal that takes
into account the results of the Subscription Offering. The Special Meeting
of members of the Savings Bank will be held on September 15, 1998 for the
purpose of considering and voting on the Plan and the Conversion. On August 3,
1998, the Federal Reserve Board approved the Holding Company's application
to become the holding company of the converted Savings Bank.

If the Board of Directors of the Savings Bank decides for any reason (such
as policies or conditions which could adversely affect the Savings Bank's or the
Holding Company's ability to consummate the Conversion and the Savings Bank's
ability to transact its business as contemplated herein and in accordance with
its operating policies), at any time prior to the issuance of the Common Stock,
not to use the holding company form of organization in implementing the
Conversion, the Plan of Conversion will be amended not to use the holding
company form of organization in the Conversion. In the event that such a
decision is made, the Savings Bank will withdraw the Holding Company's
registration statement from the SEC and will take all steps necessary to
complete the Conversion without the Holding Company, including filing any
necessary documents with the Commissioner and the FDIC. In such event, and
provided there is no regulatory action, directive or other basis upon which the
Savings Bank determines not to complete the Conversion, the Savings Bank will
issue and sell the common stock of the Savings Bank. A resolicitation for the
Savings Bank's common stock will be commenced and subscribers for the Common
Stock will be required to reconfirm their orders. The description of the Plan
contained herein assumes that a holding company form of organization will be
utilized in the Conversion. In the event that a holding company form of
organization is not utilized, all other pertinent terms of the Plan as described
below will apply to the conversion of the Savings Bank from a mutual to stock
form of organization and the sale of the Savings Bank's common stock.

The following is a brief summary of the material aspects of the Conversion.
It is qualified in its entirety by the provisions of the Plan, which contain a
more detailed description of the terms of the Conversion. Copies of the Plan,
including the proposed articles of incorporation and bylaws of the converted
Savings Bank, are available without charge upon request from the Savings Bank.
A copy of the Plan is available for inspection at the office of the Savings Bank
and at the offices of the Commissioner in Chicago, Illinois and Springfield,
Illinois. The Plan is also filed as an exhibit to the Registration Statement of
which this Prospectus is part and may be obtained from the SEC. See "AVAILABLE
INFORMATION."

PURPOSES OF CONVERSION

The Savings Bank, as an Illinois-chartered mutual savings bank, has no
stockholders and no authority to issue capital stock. By converting to the
stock form of organization the Savings Bank will be structured in the form used
by commercial banks, most other business entities and a growing number of
savings institutions. Conversion to the stock form of organization and the
formation of a holding company in connection therewith offer a number of

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advantages which may be important to the future growth and performance of the
Savings Bank, including (i) a larger capital base for the converted Savings
Bank's operations, (ii) enhanced future access to capital markets, and (iii) an
opportunity for depositors of the Savings Bank to become stockholders of the
Holding Company and thereby participate more directly in any future growth of
the Savings Bank. In addition, the capital contributed to the Savings Bank by
the Holding Company may assist the Savings Bank in offering new programs and
expanded service to its customers.

Management believes that the formation of the Holding Company will provide
greater flexibility than the converted Savings Bank would have to diversify its
business activities through existing or newly formed subsidiaries or through
acquisitions of other financial institutions (including banks and savings
associations) and other companies. Although there are no current arrangements,
understandings or agreements regarding any such opportunities, the Holding
Company will be in a position after the Conversion, subject to regulatory
limitations and the Holding Company's financial position, to take advantage of
any such opportunities that may arise.

After completion of the Conversion, the unissued common and preferred stock
authorized by the Holding Company's certificate of incorporation will permit the
Holding Company, subject to market conditions, to raise additional equity
capital through further sales of securities and to issue securities in
connection with possible acquisitions. At the present time, the Holding Company
has no plans with respect to acquisitions or additional offerings of securities.
Management of the Savings Bank believes that the converted Savings Bank will
also benefit from management and employee ownership of stock in the Holding
Company, because such stock ownership is an effective performance incentive and
a means of attracting, retaining and compensating personnel. Following the
Conversion, the Holding Company will also be able to use stock-related incentive
programs to attract, retain and provide incentives for qualified executive and
other personnel for itself and its subsidiaries. See "MANAGEMENT OF THE HOLDING
COMPANY AND SAVINGS BANK -- Employee Benefit Plans."

EFFECTS OF CONVERSION

GENERAL. The Savings Bank is presently an Illinois-chartered mutual
savings bank. Each person with a deposit account in a mutual savings bank, such
as the Savings Bank, has pro rata ownership rights, based upon the balance in
his or her account, to the net worth of the Savings Bank upon liquidation.
However, this right is tied to the depositor's account and has no tangible
market value separate from such deposit account. Further, mutual savings bank
depositors can realize value with respect to their interests only in the
unlikely event that the mutual savings bank is liquidated and has a positive net
worth. In such an event, the depositors of record at the time of liquidation
would share pro rata, based on the amounts of their deposits, in any residual
surplus after other claims, including those of depositors for the amounts of
their deposit accounts (including accrued interest), are paid.

When a mutual savings bank converts to stock form, the institution's
charter is amended to authorize the issuance of capital stock to represent
ownership of the bank, including its net worth. The Common Stock is separate
and apart from deposit accounts and is not insured by the SAIF or any other
government agency. Certificates are issued to evidence ownership of the stock.
The stock certificates are transferable and, therefore, the stock may be sold or
traded if a purchaser is available, with no effect on any deposit account the
seller may hold in the institution.

In connection with the Conversion, the Savings Bank will amend its
articles of incorporation to authorize the issuance of capital stock which will
be separate and apart from any deposit accounts of the converted Savings Bank
and will not be insured by the SAIF or any other government agency.
Certificates evidencing ownership of this capital stock will be issued to the
Holding Company. The Holding Company's certificate of incorporation likewise
authorizes the issuance of capital stock, which will be separate and apart from
any deposit accounts of the converted Savings Bank and will not be insured by
the SAIF or any other government agency. Persons who purchase shares of the
Common Stock in the Conversion will be issued certificates evidencing ownership
of such shares, which will be transferable and, therefore, may be sold or traded
by the holder if a purchaser is available, with no effect on any deposit account
the seller may hold in the converted Savings Bank.

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DEPOSIT ACCOUNT AND LOANS. The account balances, interest rates and other
terms of deposit accounts at the Savings Bank will not be affected by the
Conversion (except to the extent that a depositor directs the Savings Bank to
withdraw funds from his or her deposit account to pay for shares of Common Stock
and except with respect to voting and liquidation rights). Likewise, the
existing SAIF insurance coverage of such accounts will not be affected by the
Conversion. Upon completion of the Conversion, each depositor of the Savings
Bank will continue as a depositor in the converted Savings Bank, and will
continue to hold a deposit account or accounts with the same account balance(s),
interest rate(s) and other terms as the deposit account(s) held by such
depositor in the Savings Bank immediately prior to consummation of the
Conversion (after taking into account any reduction in account balance or change
in interest rate resulting from a withdrawal of funds at the direction of the
depositor to pay for his or her Common Stock and except with respect to voting
and liquidation rights). Furthermore, the Conversion will not affect any loan
account, the balances, interest rates or maturities of these accounts or the
obligations of borrowers or the Savings Bank under their individual contractual
arrangements with the Savings Bank. Upon consummation of the Conversion, all
loans of the Savings Bank will automatically become loans of the converted
Savings Bank, with no change in the outstanding principal balances, interest
rates or other contract terms of such loans.

CONTINUITY. The Savings Bank will continue without interruption, during
and after completion of the Conversion, to provide its services to depositors
and borrowers pursuant to existing policies and will maintain its office
operated by the existing management and employees of the Savings Bank. No
assets of the Savings Bank will be distributed in the Conversion other than for
the payment of expenses incident to the Conversion.

VOTING RIGHTS. Under the Savings Bank's current charter, deposit account
holders of the Savings Bank have voting rights with respect to certain matters
relating to the Savings Bank, including the election of directors. For the most
part, deposit account holders of the Savings Bank exercised these voting rights
by granting proxies to the Savings Bank's Board of Directors at the time such
depositors opened their accounts at the Savings Bank ("Omnibus Proxies"). These
Omnibus Proxies gave the Savings Bank's Board of Directors the ability to
control the voting on any issue requiring member approval. The Board of
Directors may not, however, use the Omnibus Proxies to vote for the Plan of
Conversion.

After the Conversion, (i) account holders will not have voting rights with
respect to the converted Savings Bank and will therefore not be able to elect
directors of the converted Savings Bank or to control its affairs; (ii) any
Omnibus Proxies previously granted by the Savings Bank's depositors to the
Savings Bank's Board of Directors will be of no further force and effect;
(iii) voting rights with respect to the converted Savings Bank will be vested in
the Holding Company, as the sole stockholder of the converted Savings Bank; and
(iv) voting rights with respect to the Holding Company will be vested in the
Holding Company's stockholders. Each purchaser of Common Stock will be entitled
to vote on any matters to be considered by the Holding Company's stockholders.
For a description of the voting rights of the holders of Common Stock, see
"DESCRIPTION OF CAPITAL STOCK -- Common Stock."

MATERIAL TAX EFFECTS. An opinion has been received from Geo. S. Olive &
Co. LLC with respect to material tax consequences of the proposed Conversion of
the Savings Bank to stock form that:

(i) the Conversion of the Savings Bank from a state-chartered mutual
savings bank to a state-chartered stock savings bank will
constitute a reorganization transaction within the meaning of
Section 368(a)(1)(F) of the Code, and neither the Savings Bank in
its mutual form nor the Savings Bank in its stock form will
recognize any gain or loss as a result of the Conversion and the
Savings Bank in its mutual and stock form will each be a party to a
reorganization within the meaning of Section 368(b) of the Code;

(ii) the Savings Bank in its stock form will not reorganize gain or loss
upon the receipt of money and other property, if any, in exchange
for shares of its common stock;

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(iii) no gain or loss will be recognized by the Holding Company upon the
receipt of money for Shares of Common Stock;

(iv) the basis of the Savings Bank's assets in the hands of the Savings
Bank after the Conversion will be the same as the basis of those
assets in the hands of the Savings Bank immediately prior to the
Conversion;

(v) the holding period of the assets of the Savings Bank after the
Conversion will include the period during which such assets were
held by the Savings Bank prior to the Conversion;

(vi) the creation of the Liquidation Account on the records of the
Savings Bank after the Conversion will have no effect on the
taxable income of the Savings Bank in either its mutual or stock
form;

(vii) the Savings Bank in its stock form will succeed to and take into
account, immediately after the reorganization, the dollar amounts
of those accounts of the Savings Bank in its mutual form which
represent bad debt reserves in respect of which the Savings Bank in
its mutual form has taken a bad debt deduction for taxable years
ending on or before the date of reorganization, the bad debt
reserves will not be required to be restored to the gross income of
either the Savings Bank in its mutual form or the Savings Bank in
its stock form for the taxable year of the reorganization, and such
bad debt reserves will have the same character in the hands of the
Savings Bank in its stock form as they would have had in the hands
of the Savings Bank in its mutual form, had no reorganization
transaction occurred;

(viii) for purposes of Section 381 of the Code, the Savings Bank in its
stock form will be treated as if there had been no reorganization,
the tax attributes of the Savings Bank in its mutual form
enumerated in Section 381(a) of the Code will be taken into account
by the Savings Bank in its stock form as if there had been no
reorganization, the tax year of the Savings Bank in its mutual form
will not end on the effective date of the Conversion, the part of
the tax year of the Savings Bank before the Conversion will be
includable in the tax year of the Savings Bank in its stock form
after the Conversion and the Savings Bank in its stock form will
not be required to make a federal income tax return for the portion
of the tax year prior to the Conversion;

(ix) depositors will realize gain, if any, upon the constructive
issuance to them of withdrawable deposit accounts of the Savings
Bank in its stock form, Subscription Rights, and/or interests in
the Liquidation Account of the Savings Bank in its stock form and
any gain resulting therefrom, will be recognized, but only in an
amount not in excess of the fair market value of the Subscription
Rights and Liquidation Account received, and the Liquidation
Account will have nominal, if any, fair market value;

(x) based solely on the accuracy of the conclusions reached in an
opinion of JMP (the "JMP Opinion") that the Subscription Rights
have no economic value at the time of distribution or exercise, no
gain or loss will be required to be recognized by the depositors
upon receipt or distribution of Subscription Rights, no taxable
income will be realized by the depositors of the Savings Bank as a
result of the exercise of the Subscription Rights to purchase
Common Stock at fair market value, and no taxable income will be
realized by the Savings Bank in either mutual or stock form or the
Holding Company on the issuance or distribution of Subscription
Rights;

(xi) a depositor's basis in the deposit accounts of the Savings Bank in
its stock form will be the same as the basis of the deposit
accounts in the Savings Bank in its mutual form, the basis of the
Subscription Rights received to acquire Common Stock will be zero,
and the basis of the interest in the Liquidation Account of the
Savings Bank in its stock form received by Eligible Account

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Holders and Supplemental Eligible Account Holders will be equal to
the cost of such property (which is assumed to be zero);

(xii) account holders will not recognize gain or loss upon the deemed
exchange of their deposit accounts in the Conversion;

(xiii) the basis of the Common Stock to its holders will equal the
purchase price thereof;

(xiv) a stockholder's holding period for Common Stock acquired through
the exercise of Subscription Rights shall begin on the date on
which the Subscription Rights are exercised and the holding period
for the Common Stock purchased pursuant to the Community Offering
or under other purchase arrangements will commence on the date
following the date on which Common Stock is purchased;

(xv) regardless of any financial accounting entries that are made for
the establishment of a Liquidation Account, the reorganization will
not diminish the accumulated earnings and profits of the Savings
Bank in its stock form available for subsequent distribution of
dividends within the meaning of Section 316 of the Code and the
Savings Bank in its stock form will succeed to and take into
account the earnings and profits or deficit in earnings and profits
of the Savings Bank in its mutual form as of the date of the
Conversion; and

(xvi) the State of Illinois consequences of the proposed transaction will
be consistent with the federal tax results.

The opinion from Geo. S. Olive & Co. LLC is based on certain
representations made by the Savings Bank to Geo. S. Olive & Co. LLC, including
the representation that the exercise price of the Subscription Rights to
purchase Common Stock will be equal to the fair market value of that stock at
the time of the completion of the proposed Conversion. With respect to the
Subscription Rights, the Savings Bank has relied upon the JMP Opinion which,
based on certain assumptions, concludes that the Subscription Rights to be
received by Eligible Account Holders and other eligible subscribers have no
ascertainable fair market value at the time of distribution or exercise. All
recipients of Subscription Rights are encouraged to consult with their own tax
advisors as to the tax consequences which may result if it is subsequently
determined that the Subscription Rights have a fair market value.

The opinion of Geo. S. Olive & Co. LLC is limited to applicable Federal and
Illinois law. No legal opinion has been or will be received with respect to the
value of the Holding Company, of the Savings Bank (in either mutual or stock
form) or of the Subscription Rights, or with respect to any tax consequences of
the Conversion not specifically described above, including the tax consequences
under the laws of any other state or local or foreign taxing jurisdiction to
which they may be subject.

The JMP Opinion concludes that the Subscription Rights have no
ascertainable market value. The JMP Opinion is based on JMP's observation that
the Subscription Rights will be available to such parties without cost, will be
legally non-transferable and of short duration, and will afford such parties the
right only to purchase shares of Common Stock at the same price to be paid by
members of the general public in the Community Offering. The JMP Opinion is
an exhibit to the Registration Statement.

Unlike a private letter ruling, the opinion of Geo. S. Olive & Co. LLC and
the JMP Opinion have no binding effect or official status, and no assurance can
be given that the conclusions reached in any of those opinions would be
sustained by a court if contested by the IRS or the Illinois tax authorities.

LIQUIDATION RIGHTS. In the unlikely event of a complete liquidation of the
Savings Bank before the Conversion or of the converted Savings Bank after the
Conversion, account holders would have claims for the amount of their deposit
accounts, including accrued interest, and would receive the protection of SAIF
insurance up to applicable limits.

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Prior to the Conversion, in the event of a complete liquidation of the
Savings Bank, each holder of a deposit account in the Savings Bank would receive
such holder's pro rata share of any assets of the Savings Bank remaining after
payment of the valid claims of all creditors (including the claims of all
depositors to the withdrawal value of their accounts, including accrued
interest). Such holder's pro rata share of such remaining assets, if any, would
be in the same proportion as the value of such holder's deposit account was to
the total value of all deposit accounts in the Savings Bank at the time of
liquidation.

As required by the Commissioner's regulations, the Plan provides that, upon
completion of the Conversion, a "Liquidation Account" will be established on the
converted Savings Bank's books, for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders who continue to maintain their deposit
accounts at the converted Savings Bank. The amount of the Liquidation Account
will be equal to the regulatory capital of the Savings Bank as of the latest
practicable date prior to consummation of the Conversion. Under applicable
regulations of the Commissioner, the converted Savings Bank will not be
permitted to pay dividends on its common stock if its regulatory capital would
thereby be reduced below the aggregate amount then required for the Liquidation
Account. After the Conversion, Eligible Account Holders and Supplemental
Eligible Account Holders will be entitled, in the event of liquidation of the
converted Savings Bank, to receive liquidating distributions of any assets
remaining after payment of all valid creditors' claims (including the claims of
all depositors to the withdrawal values of their deposit accounts, including
accrued interest), but before any distributions are made on the converted
Savings Bank's common stock, equal to their proportionate interests in the
Liquidation Account at the time of liquidation.

Each Eligible Account Holder and Supplemental Eligible Account Holder will
have an initial interest ("subaccount balance") in the Liquidation Account for
each deposit account as of the Eligibility Record Date or Supplemental
Eligibility Record Date, respectively. Each initial subaccount balance will be
the amount determined by multiplying the total opening balance in the
Liquidation Account by a fraction, (i) the numerator of which is the total of
the deposit balances of the deposit accounts (as defined in the Plan) of an
Eligible Account Holder and Supplemental Eligible Account Holder as of the close
of business on the Eligibility Record Date or, in the case of a Supplemental
Eligible Account Holder, the Supplemental Eligibility Record Date ("Qualifying
Deposit") (provided that deposit accounts of an Eligible Account Holder or
Supplemental Eligible Account Holder with total deposit balances of less than
$50 shall not constitute a Qualifying Deposit), and (ii) the denominator of
which is the total of all Qualifying Deposits of all Eligible Account Holders or
Supplemental Eligible Account Holders, respectively. If the amount in the
deposit account on any subsequent annual closing date (I.E., each March 31
commencing March 31, 1999) of the converted Savings Bank is less than the
balance in such deposit account on any other annual closing date or the balance
in such account on the Eligibility Record Date, this interest in the Liquidation
Account will be reduced by an amount proportionate to any such reduction and
will not thereafter be increased despite any subsequent increase in the related
deposit account. Each Eligible Account Holder's and Supplemental Eligible
Account Holder's interest in the Liquidation Account will cease to exist if the
Eligible Account Holder or Supplemental Eligible Account Holder ceases to
maintain an account at the converted Savings Bank. The Liquidation Account will
never increase and will be correspondingly reduced as the subaccount balances in
the Liquidation Account are reduced or cease to exist. Any assets remaining
after the above liquidation rights of Eligible Account Holders and Supplemental
Eligible Account Holders are satisfied would be distributed to the Holding
Company, as sole stockholder of the converted Savings Bank. A merger,
consolidation, sale of bulk assets or similar combination or transaction with
another FDIC insured institution, whether or not the converted Savings Bank is
the surviving institution, would not be viewed as a complete liquidation for
purposes of distribution of the Liquidation Account. In any such transaction,
the Liquidation Account would be assumed by the surviving institution to the
full extent authorized by regulations of the Commissioner as then in effect.

THE SUBSCRIPTION AND COMMUNITY OFFERINGS

SUBSCRIPTION OFFERING. In accordance with the Commissioner's and the
FDIC's regulations, Subscription Rights have been granted pursuant to the
Subscription Offering under the Plan to the following persons (collectively, the
"Eligible Subscribers") in the following order of priority: (1) Eligible
Account Holders (depositors with aggregate account balances of $50 or more on
deposit at the Savings Bank as of December 31, 1996); (2) the ESOP;

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(3) Supplemental Eligible Account Holders (depositors with aggregate account
balances of $50 or more on deposit at the Savings Bank, other than officers or
directors of the Savings Bank or any of their associates, as of June 30, 1998);
and (4) Other Members (depositors who are not Eligible Account Holders or
Supplemental Eligible Holders and who continue to be depositors as of August 7,
1998, the voting record date). Subscription Rights are
non-transferable and have been granted to Eligible Subscribers without charge.
No Eligible Subscriber is required to purchase any shares of Common Stock in the
Subscription Offering. All subscriptions received will be subject to the
availability of Common Stock after satisfaction of subscriptions of all Eligible
Subscribers having prior rights in the Subscription Offering and to the maximum
purchase limitations and other terms and conditions set forth in the Plan and
described below.

CATEGORY 1: ELIGIBLE ACCOUNT HOLDERS. Subject to the maximum and minimum
purchase limitations set forth in the Plan, each Eligible Account Holder has
been granted, without payment therefor, non-transferable Subscription Rights to
purchase Common Stock up to an amount which, when added to the Common Stock
purchased by all of his associates and/or any persons acting in concert with
such Eligible Account Holder, equals 5% of the shares of Common Stock offered in
the Conversion (6,325 shares or $63,250), as calculated without giving effect to
any increase, subsequent to the date hereof in the Estimated Valuation Range and
the corresponding increase in the number of shares offered and sold.

Subscription Rights of Eligible Account Holders that are received by
officers and directors of the Savings Bank and the Holding Company and their
associates based on their increased deposits in the Savings Bank in the one-year
period preceding the Eligibility Record Date shall be subordinated to all other
subscriptions involving the exercise of Subscription Rights by Eligible Account
Holders.

If Eligible Account Holders subscribe for more shares than are available
for purchase, other Eligible Subscribers will not be entitled to purchase any
shares and available shares will be allocated among Eligible Account Holders in
accordance with the following formula. Available shares of Common Stock will
first be allocated so as to permit each subscribing Eligible Account Holder, as
the case may be, to purchase the lesser of 100 shares of Common Stock or the
amount of each such subscriber's subscription. Thereafter, shares of Common
Stock remaining shall be allocated among subscribing Eligible Account Holders in
the proportion that the amount of the Qualifying Deposit of each such subscriber
bears to the total amount of the Qualifying Deposits of all such Eligible
Account Holders. If the amount of shares so allocated to one or more of such
subscribers exceeds the amount subscribed for by such subscriber(s), the excess
shall be reallocated (one or more times, as necessary) among those Eligible
Account Holders whose subscriptions are still not fully satisfied on the same
principle until all available shares have been allocated or all subscriptions
satisfied.

CATEGORY 2: ESOP. The ESOP has been granted, without payment therefor,
non-transferable Subscription Rights to purchase up to 8% of the Common Stock
sold in the Subscription Offering. It is anticipated that the ESOP will
exercise Subscription Rights to purchase 8% of the shares sold in the Offerings,
assuming such shares are available after subscriptions of Eligible Account
Holders have been filled. Under certain circumstances, the ESOP's purchases in
the Conversion may be limited to an amount less than 8% or may be prohibited
altogether. For information regarding these restrictions, see "MANAGEMENT OF
THE HOLDING COMPANY AND SAVINGS BANK -- Employee Benefit Plans -- Employee Stock
Ownership Plan." Pursuant to the Plan, shares of Common Stock purchased by the
ESOP will not be aggregated with shares of Common Stock purchased directly by,
or which are otherwise attributable to, any other participants in the Offerings,
including subscriptions of any of the Savings Bank's directors, officers,
employees or associates thereof.

CATEGORY 3: SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS. Subject to the maximum
and minimum purchase limitations set forth in the Plan, each Supplemental
Eligible Account Holder has been granted, without payment therefor,
non-transferable Subscription Rights to purchase Common Stock up to an amount
which, when added to the Common Stock purchased by all of his associates and/or
any persons acting in concert with such Supplemental Eligible Account Holder,
equals 5% of the shares of Common Stock offered in the Conversion (or 6,325
shares, assuming the sale of 126,500 shares), as calculated without giving
effect to any increase in the Estimated Value Range and the

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corresponding increase in the number of shares offered and sold subsequent to
the date hereof. The Subscription Rights of each Supplemental Eligible Account
Holder will be reduced by any Subscription Rights received by such person as an
Eligible Account Holder.

If Supplemental Eligible Account Holders subscribe for more shares than are
available for purchase, other subscribers will not be entitled to purchase any
shares. In the event of an oversubscription by Supplemental Eligible Account
Holders, shares of Common Stock available to the oversubscribing subclass will
be allocated in accordance with the following formula. Available shares of
Common Stock will be allocated so as to permit each subscribing Supplemental
Eligible Account Holder to purchase the lesser of 100 shares of Common Stock or
the amount of each such subscriber's subscription. Thereafter, shares of Common
Stock remaining shall be allocated among subscribing Supplemental Eligible
Account Holders in the proportion that the amount of the Qualifying Deposit of
each such Subscriber bears to the total amount of the Qualifying Deposits of all
such Supplemental Eligible Account Holders. If the amount of shares so
allocated to one or more of such subscribers exceeds the amount subscribed for
by such subscriber(s), the excess shall be reallocated (one or more times, as
necessary) among those Supplemental Eligible Account Holders whose subscriptions
are still not fully satisfied on the same principle until all available shares
have been allocated or all subscriptions satisfied.

CATEGORY 4: OTHER MEMBERS. Subject to the maximum and minimum purchase
limitations set forth in the Plan, each Other Member has been granted, without
payment therefor, nontransferable Subscription Rights to purchase Common Stock
up to an amount which, when added to the Common Stock purchased by all of his or
her associates and any persons acting in concert with such Other Member, equals
5% of the Common Stock offered in the Conversion (or 6,325 shares, assuming the
sale of 126,500 shares), as calculated without giving effect to any increase,
subsequent to the date hereof, in the Estimated Valuation Range and the
corresponding increase in the number of shares offered and sold, to the extent
that shares remain available for purchase after satisfaction of all
subscriptions of Eligible Account Holders, the ESOP and Supplemental Eligible
Account Holders. In the event of an oversubscription by Other Members,
available shares of Common Stock will be allocated among Other Members in the
proportion that the number of shares subscribed for by each Other Member bears
to the total number of shares subscribed for by all such Other Members.

COMMUNITY OFFERING. Subsequent to the Subscription Offering, and subject
to the availability of shares of the Common Stock after satisfaction of all
subscriptions of Eligible Account Holders, the ESOP, Supplemental Eligible
Account Holders and Other Members, the remaining shares of the Common Stock will
be offered in the Community Offering to members of the general public to whom
this Prospectus and Order Form are delivered with a preference to natural
persons residing in the Illinois county of Piatt in a manner designed to achieve
the widest possible distribution of Common Stock.

No individual who purchases Common Stock in the Community Offering,
directly or indirectly or together with his or her associates or other persons
with whom such person is acting in concert, may subscribe for an amount of
Common Stock which would exceed 5% of the shares of Common Stock sold in the
Conversion (or 6,325 shares, assuming the sale of 126,500 shares), as calculated
without giving effect to any increase in the Estimated Valuation Range, and
corresponding increase in the number of shares offered and sold, subsequent to
the date hereof.

If orders are received in the Community Offering for shares in excess of
the available shares of Common Stock to be offered in the Conversion, accepted
subscriptions from purchasers in the Community Offering shall first be filled in
full up to a maximum of 2% of the Common Stock offered in the Conversion and
thereafter remaining shares shall be allocated on an equal number of shares per
order until all orders of such purchasers have been filled (subject to the
minimum and maximum purchase limitations).

The Holding Company reserves the right to accept or reject, in whole or in
part, any or all orders in the Community Offering, either at the time of receipt
of an order or as soon as practicable following the termination of the
Offerings.

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In the event that a Community Offering does not appear feasible, the
Savings Bank will consult with the Commissioner to determine the most viable
alternative available to effect completion of the Conversion. If no viable
alternative exists, the Savings Bank may terminate the Conversion with the
concurrence of the Commissioner.

SUBSCRIPTION AND COMMUNITY OFFERINGS MARKETING AND OTHER FEES

The Savings Bank has engaged Trident act on a best efforts basis as
selling agent in connection with the Offerings and to consult and advise the
Holding Company and Savings Bank with respect to the Subscription and
Community Offerings. Trident is a registered broker-dealer and is a member
of the NASD. Trident will assist the Holding Company and the Savings Bank in
the Conversion by, among other things, (i) training the Savings Bank's
employees regarding the mechanics and regulatory requirements of the
Conversion process; (ii) conducting informational meetings for potential
subscribers and purchasers of the Common Stock; (iii) organizing the sales
efforts in the Savings Bank's local community; (iv) soliciting subscriptions
and purchases of Common Stock; (v) maintaining records of all subscriptions
and purchases of Common Stock and (vi) developing and managing a Syndicated
Community Offering, if implemented, involving local and regional brokerage
firms. For its services, Trident will receive a $53,500 financial advisory
fee, and an amount not to exceed $35,000 for reimbursement of certain
out-of-pocket expenses (including fees of Trident's legal counsel). If a
Syndicated Community Offering is implemented, Trident will be paid a fee to
be agreed upon jointly by Trident and the Savings Bank to reflect market
requirements at the time of the stock allocation in a Syndicated Community
Offering. If the Conversion is not consummated for any reason, or if the
Conversion is consummated without using the services of Trident, Trident
shall be entitled to retain the fees received up to the time that the
Conversion is terminated or Trident services no longer are utilized. Under
the agreement with Trident, the Savings Bank is also obligated to indemnify
Trident against certain liabilities and expenses, including legal fees, to
which Trident may become subject in connection with its engagement.

The Savings Bank has retained JMP to provide an appraisal of the pro forma
market value of the Common Stock to be issued in connection with the Conversion
and to prepare a business plan that is required to be filed with the FDIC and
the Commissioner as part of the conversion application. JMP will receive
$12,500 for this service. For information concerning fees paid to JMP in its
capacity as appraiser, see "-- Stock Pricing and Number of Shares to be Issued."

PLAN OF DISTRIBUTION

Offering materials for the Subscription Offering and subsequent Community
Offering, if necessary, will be distributed to certain persons by mail, with
copies also available by request or at the Savings Bank's office. In the
Subscription and Community Offerings, officers and directors of the Savings Bank
will be available to answer questions concerning factual or historical
information regarding the Savings Bank and may also hold informational meetings
for interested persons. A representative of Trident will be present at all such
meetings and will respond to questions concerning the Offerings. Officers and
directors will not be permitted to make statements about the Savings Bank unless
such information is also set forth in the Prospectus nor may they render
investment advice. All subscribers for or purchasers of the shares to be
offered will be instructed to send payment directly to the Savings Bank, where
such funds will be held in a segregated account and not released until all
shares are sold or the Offerings are terminated.

In the event the Savings Bank is unable to find purchasers from the
general public for all unsubscribed shares, other purchase arrangements will
be made by the Board of Directors of the Savings Bank, if feasible. Such
other arrangements will be subject to the approval of the Commissioner and
the FDIC. The Commissioner may grant one or more extensions of the offering
period, provided that (i) no single extension exceeds 90 days, (ii)
subscribers are given the right to increase, decrease or rescind their
subscriptions during the extension period, and (iii) the extensions do not go
more than two years beyond the date on which the members of the Savings Bank
approved the Plan. If the Conversion is not completed by October 26, 1998
(or November 16, 1998, if the Subscription Offering is fully extended), all
funds received will be returned with interest (and withdrawal authorizations
canceled) or, if the Commissioner has granted an extension of such period,
all subscribers will be given the right to increase, decrease or rescind
their subscriptions at any time prior to 20 days before the end

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of the extension period. If an extension of time is obtained, all subscribers
will be notified of such extension and of their rights to modify their orders.
If an affirmative response to any resolicitation is not received by the Holding
Company from a subscriber, the subscriber's order will be rescinded and all
funds received will be promptly returned with interest (or withdrawal
authorizations will be canceled).

DESCRIPTION OF SALES ACTIVITIES

The Common Stock will be offered in the Subscription Offering and
subsequent Community Offering, if necessary, principally by the distribution of
this Prospectus and through activities conducted at a Savings Bank facility not
open to the public (the "Conversion Center"). The Conversion Center is expected
to operate during normal business hours throughout the Subscription and
Community Offerings. A representative of Trident will supervise the activities
in the Conversion Center and will respond to all questions regarding the
mechanics of the Subscription and Community Offerings.

Officers and directors of the Savings Bank may have occasion to discuss the
Subscription and Community Offerings in social or business situations and
otherwise answer questions from interested parties concerning factual or
historical information regarding the Savings Bank. Parties interested in
participating in the Subscription and Community Offerings or with questions
concerning the mechanics of the Subscription and Community Offerings will be
directed to a representative of Trident at the Conversion Center.

None of the Savings Bank's employees or directors who participate in the
Subscription and Community Offerings, either in the Conversion Center or
otherwise, will receive any special compensation or other remuneration for such
activities.

None of the Savings Bank's personnel participating in the Subscription and
Community Offerings are registered or licensed as a broker or dealer or an agent
of a broker or dealer. The Savings Bank's personnel will assist in the
above-described activities pursuant to an exemption from registration as a
broker or dealer provided by Rule 3a4-1 ("Rule 3a4-1") promulgated under the
Exchange Act. Rule 3a4-1 generally provides that an "associated person of an
issuer" of securities shall not be deemed a broker solely by reason of
participation in the sale of securities of such issuer if the associated person
meets certain conditions. Such conditions include, but are not limited to, that
the associated person participating in the sale of an issuer's securities not be
compensated in connection therewith at the time of participation, that such
person not be associated with a broker or dealer and that such person observe
certain limitations on his participation in the sale of securities. For
purposes of this exemption, "associated person of an issuer" is defined to
include any person who is a director, officer or employee of the issuer or a
company that controls, is controlled by or is under common control with the
issuer.

In connection with this Offering, Trident has conducted due diligence with
respect to the Holding Company and Savings Bank to the extent it considers
necessary to satisfy its obligations as an underwriter under the federal
securities laws. Trident and its counsel have reviewed, among other things, the
corporate records of the Savings Bank and Holding Company and will receive a
"comfort" letter prepared by the Savings Bank's independent certified public
accountants and a legal opinion prepared by the Savings Bank's outside counsel
with respect to the Offering. Trident has also spent time at the Savings Bank
to view its operations and has conducted extensive interviews with the Chief
Executive Officer of the Savings Bank as part of its due diligence. Finally,
Trident and its counsel have been extensively involved in the drafting of the
Prospectus. THE DUE DILIGENCE PROCEDURES FOLLOWED BY TRIDENT IN CONNECTION WITH
THE OFFERINGS, HOWEVER, ARE NOT INTENDED AND SHOULD NOT BE CONSTRUED AS A
RECOMMENDATION OF ANY KIND AS TO THE ADVISABILITY OF PURCHASING THE COMMON
STOCK.

STOCK PRICING AND NUMBER OF SHARES TO BE ISSUED

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market value of the Common Stock. The Savings Bank has retained JMP to prepare
an appraisal of the pro forma market value of the Common Stock to be issued in
connection with the Conversion. JMP's fee for its appraisal services will be
$12,500. The Savings Bank has agreed to indemnify JMP under certain
circumstances against liabilities and expenses (including legal fees) arising
out of, related to, or based upon the Conversion.

For its analysis, JMP undertook substantial investigations to learn about
the Savings Bank's business and operations. Management supplied financial
information, including annual financial statements, information on the
composition of assets and liabilities, and other financial schedules. In
addition to this information, JMP reviewed the Savings Bank's Conversion
Application and the Registration Statement. Further, JMP visited the Savings
Bank's facilities and had discussions with the Savings Bank's management. No
detailed individual analysis of the separate components of the Holding Company's
or the Savings Bank's assets and liabilities was performed in connection with
the evaluation.

In estimating the pro forma market value of the Common Stock, JMP's
analysis utilized three generally accepted valuation procedures, the Price/Book
("PUB") method, the Price/Earnings ("PIE") method, and Price/Assets ("PEA")
method, all of which are described in its report. JMP placed the greatest
emphasis on the PIE and PUB methods in estimating pro forma market value. In
applying these procedures, JMP reviewed among other factors, the economic
make-up of the Savings Bank's primary market area, the Savings Bank's financial
performance and condition in relation to publicly-traded institutions that JMP
deemed comparable to the Savings Bank, the specific terms of the offering of the
Common Stock, the pro forma impact of the additional capital raised in the
Conversion, conditions of securities markets in general, and the market for
thrift institution common stock in particular. JMP's analysis provides an
approximation of the pro forma market value of the Common Stock based on the
valuation methods applied and the assumptions outlined in its report. The use
of other valuation methods and/or different assumptions would likely yield
somewhat different results. JMP concluded that an appropriate range for the
pro forma market value of the Holding Company (and therefore the Savings Bank)
as of May 27, 1998 was from a minimum of $935,000 to a maximum of $1,265,000
with a mid-point of $1,100,000. Assuming that the shares of Common Stock are
sold at $10.00 per share in the Conversion, the estimated number of shares would
be between 93,500 and 126,500 with a mid-point of 110,000.

If, upon completion of the Subscription and Community Offerings, at least
the minimum number of shares are subscribed for, JMP, after taking into account
factors similar to those involved in its prior appraisal, will determine its
estimate of the pro forma market value of the Holding Company (and therefore the
Savings Bank) upon Conversion, as of the close of the Subscription and Community
Offerings.

Depending upon market and financial conditions, the number of shares issued
in connection with the Conversion may be more or less than the range in number
of shares shown above. In the event the total amount of shares issued is less
than 93,500 or more than 145,475 (15% above the maximum of the Estimated
Valuation Range) for aggregate proceeds of less than $935,000 or more than
$1,454,750 subscribers will be given the opportunity to increase, decrease or
rescind their subscriptions and subscription funds will be returned promptly
with interest to each subscriber unless he indicates otherwise. In the event a
new valuation range is established by JMP, such new range will be subject to
approval by the Commissioner and the FDIC.

No sale of the shares will take place unless prior thereto, JMP confirms to
the Commissioner and the FDIC that, to the best of JMP's knowledge and judgment,
nothing of a material nature has occurred which would cause it to conclude that
the actual total purchase price on an aggregate basis was incompatible with its
estimate of the total pro forma market value of the Holding Company and the
Savings Bank as converted at the time of the sale. If, however, the facts do
not justify such a statement, the Subscription and Community Offerings or other
sale may be canceled, a new Estimated Valuation Range and price per share set
and new Subscription Offering held. Under such circumstances, subscribers would
have the right to modify or rescind their subscriptions and to have their
subscription funds returned promptly with interest and holds on funds authorized
for withdrawal from deposit accounts would be released or reduced.

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In formulating its appraisal JMP relied upon the truthfulness, accuracy and
completeness of all documents furnished by the Savings Bank. JMP also
considered financial and other information from regulatory agencies, other
financial institutions and other public sources, as appropriate. While JMP
believes this information to be reliable, JMP does not guarantee the accuracy or
completeness of such information and did not independently verify the financial
statements and other data provided by the Savings Bank and the Holding Company
or independently value the assets or liabilities of the Holding Company and the
Savings Bank.

On June 10, 1998, the Board of Directors of the Savings Bank held a
meeting to review and discuss the original appraisal report prepared by JMP.
The representative of JMP who prepared the report attended the meeting via
telephone and explained its contents including the methodology that JMP
employed to determine the pro forma market value of the Holding Company and
the assumptions JMP used in determining this value. JMP also answered
questions from the Board of Directors concerning the report.

A copy of the complete appraisal is filed as an exhibit to the Registration
Statement of which this Prospectus is a part. See "ADDITIONAL INFORMATION." A
copy is also on file and available for inspection at the offices of the
Commissioner, 205 W. Randolph Street, Suite 1900, Chicago, Illinois 60606, and
500 E. Monroe Street, Suite 800, Springfield, Illinois 62701, and at the
executive offices of the Savings Bank, 229 E. South Street, Cerro Gordo,
Illinois 61818. A copy of the complete appraisal report may be inspected at the
office of the Savings Bank, 229 E. South Street, Cerro Gordo, Illinois, and
inquiries concerning such inspection can be made to the Savings Bank at (217)
763-2911.

THE APPRAISAL BY JMP IS NOT INTENDED TO BE, AND MUST NOT BE INTERPRETED AS,
A RECOMMENDATION OF ANY KIND AS TO THE ADVISABILITY OF VOTING TO APPROVE THE
CONVERSION OR OF PURCHASING SHARES OF COMMON STOCK. MOREOVER, BECAUSE THE
APPRAISAL IS NECESSARILY BASED ON MANY FACTORS WHICH CHANGE FROM TIME TO TIME,
THERE IS NO ASSURANCE THAT PERSONS WHO PURCHASE SUCH SHARES IN THE CONVERSION
WILL LATER BE ABLE TO SELL SHARES THEREAFTER AT PRICES AT OR ABOVE THE PURCHASE
PRICE.

PROCEDURE FOR PURCHASING SHARES IN THE SUBSCRIPTION AND COMMUNITY OFFERINGS

To purchase shares in the Subscription and Community Offerings, an executed
Order Form with the required payment for each share subscribed for, or with
appropriate authorization for withdrawal from a deposit account at the Savings
Bank (which may be given by completing the appropriate blanks in the Order
Form), must be received by the Savings Bank at or before the Subscription
Expiration Time or expiration of the Community Offering, if and as applicable.
Order Forms which are not received by such time or are executed defectively or
are received without full payment (or appropriate withdrawal instructions) are
not required to be accepted. The Savings Bank and the Holding Company have the
right to waive or permit the correction of incomplete or improperly executed
Order Forms, but do not represent that they will do so. Once received, an
executed Order Form may not be modified, amended or rescinded without the
consent of the Holding Company except in the event of resolicitation or unless
the Conversion has not been completed within 45 days after the end of the
Subscription Offering. For additional information concerning the payment for
shares, see "THE OFFERING -- Payment for Shares."

If the ESOP subscribes for shares during the Subscription and Community
Offerings, it will not be required to pay for such shares at the time of
subscription but rather, may pay for such shares upon consummation of the
Conversion, provided that there is in force from the time of its subscription
until such time, a loan commitment from an unaffiliated financial institution or
the Holding Company to lend to the ESOP, at such time, the aggregate Purchase
Price of the shares for which it subscribed.

Any interest due will be paid after completion of the Conversion. Interest
will be paid on payments whether or not the Conversion is completed or
terminated at the Savings Bank's then current passbook rate from the date

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payment is received until completion or termination of the Conversion.
Certificates representing shares of Common Stock purchased will be mailed to
purchasers at the address specified in properly completed Order Forms, as soon
as practicable following consummation of the sale of all shares of Common Stock.
Any certificates returned as undeliverable will be held by the Holding Company
until claimed by persons legally entitled thereto or otherwise disposed of in
accordance with applicable law.

To ensure that each purchaser receives a prospectus at least 48 hours prior
to the date on which the Subscription Expiration Time occurs, in accordance with
Rule 15c2-8 under the Exchange Act, no Prospectus will be mailed any later than
five days prior to such date or hand delivered any later than two days prior to
such date. Execution of the Order Form will confirm receipt or delivery in
accordance with Rule 15c2-8. Order Forms will only be distributed with a
Prospectus. The Savings Bank will accept for processing only orders submitted
on Order Forms. Payment by cash, check, money order, bank draft or withdrawal
authorization from an existing account at the Savings Bank must accompany the
Order Form.

LIMITATIONS ON PURCHASES OF SHARES

To the extent shares of Common Stock are available, each person subscribing
for Common Stock in the Offerings must subscribe for at least 25 shares of
Common Stock (or $250, assuming a Purchase Price of $10.00). In addition, all
purchases of Common Stock by any person or entity, other than the ESOP, in the
Offerings are subject to the following maximum purchase limitations:

- the maximum number of shares of Common Stock purchased in all phases
of the Offerings by any person, together with all associates of such
person, or group of persons otherwise acting in concert, is 6,325
shares of Common Stock (or $63,250, assuming a Purchase Price of
$10.00); and

- The maximum number of shares of Common Stock purchased by all
directors and officers of the Savings Bank, together with all
associates of such directors and officers, when aggregated with any
shares of Common Stock attributable to such directors and officers and
their associates but purchased by the MRP within one year following
consummation of the Conversion, may not exceed 35% of the total number
of shares sold in the Conversion.

Notwithstanding the foregoing limits:

- the ESOP will be permitted, and is expected, to subscribe for 8% of
the total number of shares of Common Stock sold in the Conversion.

The Plan also permits the Holding Company and the Savings Bank, in their
sole discretion, to increase the maximum number of shares of Common Stock which
may be purchased in the Offerings by any one person, together with all
associates of such person or group of persons otherwise acting in concert, above
the generally applicable limit of 6,325 shares of Common Stock (which represents
5% of the shares of Common Stock being offered in the Offerings at the maximum
of the Estimated Valuation Range and may be more or less than 5% of the number
of shares actually sold in the Offerings). The maximum purchase limitation may
be increased to exceed 5% of the shares of Common Stock sold in the Conversion,
provided that orders for Common Stock exceeding 5% of the total offering of
shares of Common Stock shall not exceed in the aggregate 10% of the total
offering of such shares (except that the ESOP may purchase up to 8% of the total
offering and not be included in the order limit). If an increase is effected,
each person who subscribed for the maximum number of shares of Common Stock
prior to such increase will be given the opportunity to increase his
subscription to the then applicable maximum number of shares of Common Stock,
and the Savings Bank and the Holding Company may, in their sole discretion,
resolicit certain other large subscribers. The Savings Bank or the Holding
Company may, with the approval of the Commissioner and the FDIC, decrease the
maximum purchase limitation below 6,325 shares of Common Stock. The purchase
limitations may be increased if, for example, there is a substantial
undersubscription for shares of Common Stock in the Offerings; conversely, the

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purchase limitations may be decreased if, for example, there is a substantial
oversubscription for shares of Common Stock in the Offerings.

The Plan provides that for purposes of the maximum purchase limitations,
the term "associate" is used to indicate any of the following relationships with
a person:

- any relative or spouse of such person, or any relative of such spouse,
who has the same home as such person or who is a director or officer
of the Savings Bank, any of its subsidiaries or the Holding Company;

- any corporation or organization (other than the Savings Bank or a
majority-owned subsidiary of the Savings Bank or the Holding Company)
of which the person is an officer or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities; or

- any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as a trustee or
in a similar fiduciary capacity.

Further, for purposes of the maximum purchase limitations:

- persons will be deemed to be "acting in concert" if they are
(i) engaged in knowing participation in a joint activity or
interdependent conscious parallel action towards a common goal,
whether pursuant to an express agreement or otherwise, or (ii) engaged
in a combination or pooling of voting or other interests in the
securities of the Holding Company for a common purpose pursuant to any
contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise.

The members of the Savings Bank's or the Holding Company's Board of
Directors will not be deemed to be associates, or affiliated with each other or
a group of persons acting in concert, solely as a result of being directors.
Shares of Common Stock attributed to directors, officers or employees of the
Savings Bank or the Holding Company but held in the ESOP will not be included in
calculating the maximum number of shares that may be purchased by directors,
officers or employees of the Savings Bank or the Holding Company individually or
as a group. Shares of Common Stock attributed to directors, officers and
employees of the Savings Bank or the Holding Company but purchased by the MRP
within one year of consummation of the Conversion will be included in applying
the 35% limit on aggregate purchases by directors, officers and their
associates. The ESOP and MRP participants, officers and trustees will not be
deemed to be associated or affiliated with other participants or a group acting
in concert solely as a result of their participation in such plan or service as
an officer or trustee, nor will a trustee of the ESOP or an MRP be deemed to
hold shares held by the ESOP or the MRP, respectively, for purposes of
determining the number of shares which such trustee may purchase in his or her
individual capacity.

RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS AND SHARES

Prior to the completion of the Conversion, the Commissioner's regulations
prohibit any person with Subscription Rights, including Eligible Account
Holders, the ESOP, Supplemental Eligible Account Holders and Other Members, from
transferring or entering into any agreement or understanding to transfer the
legal or beneficial ownership of the Subscription Rights issued under the Plan
or the shares of Common Stock to be issued upon their exercise. Such rights may
be exercised only by the person to whom they are granted and only for his
account. Each person exercising such Subscription Rights will be required to
certify that he is purchasing shares solely for his own account and that he has
no agreement or understanding regarding the sale or transfer of such shares.
The regulations also prohibit any person from offering or making an announcement
of an offer or intent to make an offer to purchase such Subscription Rights or
shares of Common Stock prior to the completion of the Conversion.

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The Savings Bank and the Holding Company may pursue any and all legal and
equitable remedies in the event they become aware of the transfer of
Subscription Rights and will not honor orders known by them to involve the
transfer of such rights.

Certain purchasers of Common Stock in the Conversion will be subject to
restrictions on the ability to transfer their shares. Members of the NASD,
persons associated with an NASD member, a member of the immediate family of any
such person to whose support such person contributes, directly or indirectly, or
the holder of an account in which an NASD member or person associated with an
NASD member has a beneficial interest may not sell, transfer or hypothecate
shares of Common Stock purchased in the Conversion for a period of 150 days
following the issuance of the Common Stock. Shares purchased by directors,
executive officers or their associates in the Conversion will be subject to the
restriction that such shares may not be sold during the period of one year
following the date of purchase, except in the event of the death of the
stockholder. Accordingly, stock certificates issued by the Holding Company to
directors, executive officers and their associates will bear a legend giving
appropriate notice of such restriction and, in addition, the Savings Bank and
the Holding Company will give appropriate instructions to the transfer agent for
the Common Stock with respect to the applicable restriction upon transfer of any
restricted shares. Any shares issued at a later date as a stock dividend, stock
split or otherwise, to holders of restricted stock, shall be subject to the same
restrictions that may apply to such restricted stock.

Shares of Common Stock purchased by any "affiliate" of the Holding Company
(as that term is defined under the rules and regulations issued under the
Securities Act) may also be sold only pursuant to an effective registration
statement covering such resales or in compliance with Rule 144 under the
Securities Act or another applicable exemption from the registration
requirements of the Securities Act. In general, Rule 144, as currently in
effect, permits an affiliate of the Holding Company (or persons whose sales of
Common Stock are aggregated with the sales of such affiliate) to sell within any
three-month period, beginning 90 days after the consummation of the Offerings, a
number of shares of common stock of the Holding Company equal to the greater of:
(i) 1% of the shares of common stock outstanding, or (ii) the average weekly
trading volume of such common stock during the four calendar weeks immediately
preceding such sale. Sales under Rule 144 are also subject to certain
restrictions on the manner of sale, notice requirements and the continued
availability of current public information about the Holding Company. Apart
from the foregoing restrictions, shares of Common Stock purchased in the
Conversion will be freely transferable.

RESTRICTIONS ON REPURCHASES OF COMMON STOCK

The Holding Company has committed to the FDIC that it will not repurchase
its capital stock for one year following consummation of the Conversion.
Following the first anniversary of the consummation of the Conversion, the
Holding Company's ability to repurchase its capital stock will be governed by
the regulations of the Commissioner, the Federal Reserve Board and the FDIC.

Under the Commissioner's regulations, the Holding Company may not
repurchase any of its Common Stock from any person for a period of one year from
the date of the Conversion, except that capital stock repurchases of no greater
than 5% of the capital stock issued in the conversion may be repurchased during
this one year period if the Commissioner finds that: (a) the repurchase would
not adversely affect the financial condition of the savings bank; (b) the
repurchase would not reduce the savings bank's capital below requirements
established by the Commissioner or federal law; (c) the repurchase would be
equitable to shareholders; (d) the repurchase would be undertaken for legitimate
business reasons; and (e) the Savings Bank submits information which is
sufficient for the Commissioner to reach a conclusion regarding such exception.

In addition to the foregoing, the Federal Reserve Board generally must be
given written notice before a bank holding company may purchase or redeem its
equity securities if the gross consideration for the purchase or redemption,
when aggregated with the net consideration paid by the bank holding company for
all purchases and redemptions during the preceding 12 months, is equal to 10% or
more of the bank holding company's consolidated

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net worth. The Federal Reserve Board has eliminated this prior notice
requirement for bank holding companies that are, and after giving effect to the
repurchase will be, well-capitalized and in generally satisfactory condition.

APPROVAL, AMENDMENT AND TERMINATION

Under the Plan, the letter of the Commissioner giving approval thereto and
applicable Commissioner regulations, or the FDIC's notice of intent not to
object to the Conversion, consummation of the Conversion is subject to
satisfaction of the following conditions: (i) approval of the Plan by the
affirmative vote of members of the Savings Bank holding a majority of the
outstanding votes; (ii) sale of all the shares of Common Stock within a
prescribed range; (iii) receipt by the Holding Company and the Savings Bank of
favorable opinions of counsel or other tax advisors as to the federal and state
tax consequences of the Conversion and, (iv) receipt by the FDIC of an updated
appraisal that takes into account the results of the Subscription Offering.
Consummation of the Conversion is also subject to receipt of all regulatory
approvals, and satisfaction of all conditions with respect to such approvals,
required for consummation of the Conversion in accordance with applicable laws
and regulations. As of the date of this Prospectus, all required approvals have
been received.

The Plan may be substantively amended by the Savings Bank at any time prior
to the Special Meeting, and at any time thereafter with the concurrence of the
Commissioner and the FDIC. If the Savings Bank determines upon the advice of
counsel and after consultation with the Commissioner and the FDIC that any such
amendment is material, subscribers will be given the opportunity to increase,
decrease or cancel their subscriptions.

As required by the regulations of the Commissioner, the Conversion may be
terminated by the Board of Directors of the Savings Bank at any time prior to
the Special Meeting and may be terminated by the Board of Directors of the
Savings Bank at any time after the Special Meeting, but prior to the completion
of the Conversion, with the concurrence of the Commissioner, notwithstanding
approval of the Plan by the members of the Savings Bank at the Special Meeting.
If the Conversion is terminated, no shares of Common Stock would be issued by
the Holding Company, the Savings Bank will remain an Illinois-chartered mutual
savings bank, all funds delivered to the Savings Bank or withdrawn from deposit
accounts in payment for Common Stock will be promptly returned, and all holds on
funds authorized for withdrawal, but not withdrawn, from deposit accounts will
be cancelled.

RESTRICTIONS ON ACQUISITION OF THE HOLDING COMPANY

RESTRICTIONS IN CERTIFICATE OF INCORPORATION AND BYLAWS

GENERAL. The Holding Company has implemented certain measures designed to
enhance the Board of Directors's ability to protect stockholders against, among
other things, unsolicited attempts to acquire a significant interest in the
Holding Company or to influence the Holding Company's management (whether
through open market purchases, tender offers or otherwise) that do not offer an
adequate price to all stockholders or that the Board of Directors otherwise
considers not in the best interests of the Holding Company and its stockholders.

Certain provisions in the certificate of incorporation and bylaws of the
Holding Company may impact significantly the stockholders' ability to change the
composition of the incumbent Board of Directors or the ability of a substantial
holder of the Common Stock to acquire control of, or to remove, the incumbent
Board of Directors, and might discourage certain types of transactions that
involve an actual or threatened change of control of the Holding Company.

The provisions of the certificate of incorporation and bylaws are intended
to encourage persons seeking to acquire control of the Holding Company to
initiate such an acquisition through arm's-length negotiations with the Holding
Company's management and Board of Directors. These provisions could have the
effect of discouraging a third party from making a tender offer to or otherwise
attempting to obtain control of the Holding Company, even though certain
stockholders of the Holding Company might deem such an attempt to be in the best
interests of the Holding Company and its stockholders. At the same time, these
provisions ensure that the Board of Directors, if

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confronted by an unsolicited proposal from a third party who has recently
acquired a block of Common Stock, will have sufficient time to review the
proposal and alternatives to it and to seek better proposals or negotiate better
terms for its stockholders, employees, suppliers, customers and others. These
provisions are discussed below.

CLASSIFIED BOARD OF DIRECTORS. The Holding Company's certificate of
incorporation provides that the Board of Directors of the Holding Company shall
be divided into three classes of directors serving staggered three-year terms.
In addition, the certificate of incorporation and the bylaws provide that
directors may be removed from office only for cause and only upon the vote of
the holders of at least 80% of the outstanding shares of all classes of capital
stock of the Holding Company. The classification of directors and the removal
requirements have the effect of making it more difficult for stockholders to
change the composition of the Board of Directors in a relatively short period of
time.

VOTING RESTRICTIONS ON CERTAIN BUSINESS COMBINATIONS; FAIR PRICE PROVISION.
The adoption or approval of certain business transactions, including mergers,
consolidations, asset and securities sales, plans of liquidation or dissolution
and certain reclassifications, involving any "Interested Party" (as defined
below) and certain affiliates of such Interested Party, requires an affirmative
vote of the holders of at least that number of voting shares which equals the
sum of (i) the number of voting shares beneficially owned by all Interested
Parties with respect to the business transaction, plus (ii) 80% of the remaining
number of voting shares that are not beneficially owned by any such Interested
Party. An "Interested Party" is defined in the Holding Company certificate of
incorporation to mean generally the beneficial owner of 10% or more of the
voting stock of the Holding Company.

The 80% affirmative voting requirement is not applicable to business
transactions (i) approved by a resolution adopted by a majority of the Board of
Directors holding office at the time such resolution is adopted provided that
such resolution approving the business transaction is adopted prior to the time
all Interested Parties with respect to the business transaction become
Interested Parties, or (ii) approved by a resolution adopted by 66-2/3% of the
directors holding offices at the time such resolution is adopted who are not
themselves Interested Parties or an affiliate of an Interested Party.

The 80% affirmative voting requirement also is not applicable to any
business transaction and the business transaction need only be approved by a
simple majority vote of the stockholders (if such vote is required under
applicable Delaware law) if: (i) the per share consideration to be received by
holders of Common Stock in such business transaction is not less than the
greater of (A) the highest per share price paid by the Interested Party in
acquiring its holdings of Common Stock during the preceding five years, (B) the
per share book value of the Common Stock at the end of the fiscal quarter
preceding such business transaction, or (C) the highest market price per share
of Common Stock during the two-year period ending immediately prior to the first
public announcement of such business transaction; (ii) the consideration to be
received by holders of Common Stock is in cash or in the same form as the
consideration paid by the Interested Party to acquire the largest number of
shares of Common Stock acquired by the Interested Party from a non-Interested
Party; (iii) as of the record date for the determination of stockholders
entitled to vote on the business transaction, there is one or more directors of
the Holding Company who is not an Interested Party or an affiliate of an
Interested Party; and (iv) holders of voting shares as of the record date for
the determination of stockholders entitled to vote on the business transaction
shall have received a proxy or information statement complying with the rules
and regulations under the Exchange Act, which proxy or information statement
includes, among other things, an opinion of an investment banking firm as to the
fairness from a financial point of view of the consideration to be received by
stockholders in the business transaction.

NO ACTION BY STOCKHOLDER CONSENT; SPECIAL STOCKHOLDERS' MEETINGS. The
Holding Company's certificate of incorporation and bylaws prohibit action that
is required or permitted to be taken at any annual or special meeting of
stockholders of the Holding Company from being taken by the written consent of
the stockholders without a meeting. The certificate of incorporation and bylaws
allow only the chairman of the Board of Directors, the president or a majority
of the Board of Directors to call a special stockholders' meeting. Stockholders
do not have the right to call such a meeting. These provisions may have the
effect of delaying consideration of a stockholder proposal until

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the next annual meeting of stockholders, unless a special meeting is called by
one or more of the persons entitled to call such meetings.

ADVANCE NOTIFICATION. The Holding Company's certificate of incorporation
requires advance notification to the secretary of the Holding Company of
nominations of persons for election to the Board of Directors by a stockholder.
The notice must be received not later than the date corresponding to 60 days
before the first anniversary date of the immediately preceding annual meeting of
stockholders. The notice by a stockholder must comply with certain information
requirements specified in the certificate of incorporation.

Advance written notification is also required by the Holding Company's
bylaws before a stockholder may bring any item of business before the annual
meeting of stockholders. The notice must be received by the secretary of the
Holding Company not later than the date corresponding to 60 days before the
first anniversary date of the immediately preceding annual meeting of
stockholders. The notice by a stockholder must comply with certain information
requirements specified in the bylaws.

The purpose of such advance notice requirements is to insure the orderly
conduct of business at annual meetings of stockholders and to afford the Board
of Directors a meaningful opportunity to consider the qualifications of proposed
nominees and to inform themselves, and where appropriate, to inform the
stockholders in advance of the meeting of any business proposed to be conducted
at the meeting. Such procedures may, however, have the effect of precluding the
nomination of a director, or a slate of directors, or the consideration of
business at a particular meeting if the proper procedures have not been followed
prior to the meeting.

BYLAW AMENDMENTS. Amendments to the bylaws of the Holding Company may be
made only upon (i) the affirmative vote of a majority of the members of the
Board of Directors, or (ii) the affirmative vote of the holders of at least 80%
of the outstanding shares of voting stock entitled to vote in the election of
directors.

LIMITATIONS ON BENEFICIAL OWNERSHIP. The certificate of incorporation of
the Holding Company provides that for a period of five years following the
Conversion, no person (including any individual, company or group acting in
concert) shall acquire beneficial ownership of more than 10% of any class of
equity security of the Holding Company. The certificate of incorporation
further provides that, where any person directly or indirectly acquires
beneficial ownership of more than 10% of any class of equity security of the
Holding Company during such five-year period, the securities beneficially owned
in excess of 10% shall not be counted as outstanding for purposes of determining
a quorum or the affirmative vote necessary to approve any matter submitted to
the shareholders for a vote. The certificates evidencing the shares of Common
Stock sold in the Conversation will bear a legend reflecting such restrictions.
Such restrictions on the acquisition and voting of equity securities of the
Holding Company do not apply if the acquisition of such securities has been
approved by a majority of disinterested directors of the Holding Company. The
Commissioner's regulations also include a provision prohibiting any direct or
indirect acquisition of 10% or more of the capital stock of a converted savings
bank for a period of three years following a conversion without the prior
approval of the Commissioner.

NON-STOCKHOLDER CONSTITUENCIES. The Holding Company's certificate of
incorporation provides that in evaluating certain transactions which could
effect a change in control of the Holding Company, it is proper for the Board of
Directors to consider the effects of such transactions on the employees,
suppliers and customers of the Holding Company and the communities in which the
principal offices of the Holding Company are located.

SUPERMAJORITY VOTING. The classified board, fair price, special meeting,
stockholder consent, advance notice, bylaw amendment and non-stockholder
constituency provisions of the certificate of incorporation may be altered,
amended, or repealed only if the holders of at least 80% of the outstanding
shares of voting stock entitled to vote in the election of directors vote in
favor of such action.

FEDERAL RESERVE BOARD REGULATION

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Acquisitions of control of the Savings Bank and the Holding Company by any
company are subject to prior approval by the Federal Reserve Board under the
BHCA. "Control" is defined to include the ownership, control, or power to vote,
directly or indirectly, 25% or more of any class of voting securities of a
holding company or a bank, control in any manner of the election of a majority
of the board of directors of a holding company or a bank, or exercise of a
controlling influence, directly or indirectly, over the management policies of a
holding company or a bank, as determined by the Federal Reserve Board after
notice and hearing. A company that acquires control of the Savings Bank or the
Holding Company would be required to register as a bank holding company and have
its business activities limited to those activities permitted by the Federal
Reserve Board. In addition, a bank holding company must obtain prior approval
of the Federal Reserve Board to acquire more than 5% of the voting securities of
the Holding Company.

The Change in Bank Control Act ("CBCA") prohibits any person or group of
persons acting in concert from acquiring ownership or control of 25% or more of
the voting securities of the Holding Company unless such person or group of
persons have provided 60 days prior notice to the Federal Reserve Board and the
Federal Reserve Board has not disapproved the acquisition within that time.
Under Federal Reserve Board regulations, a person will be presumed to have
acquired control under the CBCA if the person acquires 10% or more of a class of
voting securities of the Holding Company and either the Holding Company has a
class of securities registered under the Exchange Act or no other person would
own a greater percentage of that class of securities. The Federal Reserve Board
will evaluate the proposed acquisition taking into account various factors,
including the financial and managerial resources of the acquiror, the
convenience and needs of the community served by the Holding Company and the
Savings Bank, and the anti-competitive effects of the acquisition.

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Holding Company consists of
900,000 shares of Common Stock, par value $.01 per share, and 100,000 shares of
Preferred Stock, par value $.01 per share. The Holding Company currently
expects to issue 110,000 shares of Common Stock at the midpoint of the Estimated
Valuation Range and no shares of Preferred Stock in the Conversion. Each share
of the Holding Company's Common Stock will have the same relative rights as, and
will be identical in all respects with, each other share of Common Stock. Upon
payment of the Per Share Purchase Price for the Common Stock, in accordance with
the Plan of Conversion, all such shares of Common Stock will be duly authorized,
fully paid and nonassessable. Series of Preferred Stock may be issued by the
Board of Directors, from time to time, on terms set by the board without further
authorization from the stockholders.

THE COMMON STOCK OF THE HOLDING COMPANY WILL REPRESENT NONWITHDRAWABLE
CAPITAL, WILL NOT BE AN ACCOUNT OF AN INSURABLE TYPE, AND WILL NOT BE INSURED BY
THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY.

COMMON STOCK

GENERAL. The holders of shares of Common Stock are entitled to share
pro rata in distributions to stockholders upon liquidation, dissolution,
distribution of assets, or winding up of the Holding Company, subject to the
prior rights of any holders of Preferred Stock. No holders of shares of Common
Stock have any preemptive right to subscribe for or purchase any additional
issue of capital stock or securities convertible into capital stock of the
Holding Company.

DIVIDEND RIGHTS. Subject to the preferential dividend rights of any
outstanding Preferred Stock, the holders of Common Stock are entitled to such
dividends, ratably in proportion to the number of shares of Common Stock held by
them respectively, as the Board of Directors, in its discretion, may declare out
of funds legally available for the payment of such dividends. Funds for the
payment of dividends and expenses of the Holding Company will be obtained
primarily from dividends received from the Savings Bank.

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VOTING RIGHTS. Except as may otherwise be required by law or the
certificate of incorporation of the Holding Company, each holder of Common Stock
is entitled to one vote for each share held with respect to all matters voted
upon by the stockholders.

STOCK REPURCHASES. For information regarding restrictions on the Holding
Company's ability to repurchase its stock, see "THE CONVERSION -- Restrictions
on Repurchase of Stock."

PREFERRED STOCK

Under the Holding Company's certificate of incorporation, the Board of
Directors of the Holding Company may, from time to time, authorize the issuance
of up to 100,000 shares of Preferred Stock, in one or more series, with such
provisions as to voting rights, dividend rates and preferences, redemption,
sinking funds, and convertibility, and such preferences, privileges and powers,
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of such series of Preferred Stock,
as shall be stated in the resolution of the Board of Directors providing for the
issuance of the Preferred Stock. No Preferred Stock is currently outstanding
nor will any be issued in the Conversion.

CHANGE IN FISCAL YEAR

During fiscal 1997, the Savings Bank changed its fiscal year end from
April 30 to March 31. The Holding Company's fiscal year end is also March 31.
Accordingly, in future years, the Holding Company will prepare its annual
consolidated financial statement as of and for the year ended March 31.

REGISTRATION REQUIREMENTS

The Holding Company will register the Common Stock with the SEC pursuant to
Section 12(g) of the Exchange Act prior to completion of the Conversion and will
not deregister its Common Stock for a period of at least three years following
the completion of the Conversion. Upon such registration, the proxy and tender
offer rules, insider trading reporting and restrictions, annual and periodic
reporting and other requirements of the Exchange Act will be applicable.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Illinois Stock
Transfer Company.

LEGAL AND TAX OPINIONS

The legality of the Common Stock will be passed upon for the Holding
Company by Howard & Howard Attorneys, P.C., Peoria, Illinois. The Federal and
Illinois income tax consequences of the Conversion will be passed upon for the
Savings Bank by Geo. S. Olive & Co. LLC. Howard & Howard Attorneys, P.C. and
Geo S. Olive & Co. LLC have consented to the references herein to their
opinions. The opinions are filed as an exhibit to the Registration Statement.
See "AVAILABLE INFORMATION." Silver, Freedman & Taff, L.L.P., Washington, D.C.,
has acted as counsel to Trident.

EXPERTS

The consolidated financial statements of the Savings Bank as of March 31,
1998 and for the eleven months ended March 31, 1997 included in this Prospectus
have been audited by Geo. S. Olive & Co. LLC, independent certified public
accountants, as stated in their report appearing elsewhere herein, and have been
so included in reliance upon such report given upon the authority of said firm
as experts in accounting and auditing.

87
<PAGE>

JMP has consented to the inclusion herein of the summary of its appraisal
report as to the estimated pro forma market value of the Common Stock, its
opinion as to the fair market value of the Subscription Rights, filed as an
exhibit to the Registration Statement, and to the use of its name and all
statements with respect to it appearing herein.

88
<PAGE>

89
<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.

Financial Statements
March 31, 1998 and
Eleven Months Ended March 31, 1997
With Other Information

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

PAGE
- --------------------------------------------------------------------------------
<S> <C>
INDEPENDENT AUDITOR'S REPORT F-2

FINANCIAL STATEMENTS

Balance sheet F-3

Statement of income 26

Statement of equity capital F-4

Statement of cash flows F-5

Notes to financial statements F-6

</TABLE>

The financial statements of CGB&L Financial Group, Inc. ("CGB&L") have been
omitted because CGB&L had not yet issued any stock, has no assets or
liabilities, and has not conducted any business other than of an organizational
nature.

All schedules are omitted as the required information is not applicable or the
information is presented in the Financial Statements.

(F-1)

<PAGE>

[LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Cerro Gordo Building and Loan, s.b.
Cerro Gordo, Illinois

We have audited the accompanying balance sheet of Cerro Gordo Building and
Loan, s.b. as of March 31, 1998 and 1997, and the related statements of
income, equity capital, and cash flows for the year ended March 31, 1998
and eleven month period ended March 31, 1997. These financial statements
are the responsibility of the Institution's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements described above present fairly, in
all material respects, the financial position of Cerro Gordo Building and
Loan, s.b. as of March 31, 1998 and 1997, and the results of its operations
and its cash flows for the year ended March 31, 1998 and eleven month
period ended March 31, 1997, in conformity with generally accepted
accounting principles.

Geo. S. Olive & Co. LLC

Decatur, Illinois
April 10, 1998

(F-2)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
BALANCE SHEET
MARCH 31 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 524,845 $ 109,912
Interest-bearing time deposits 590,000 1,279,000
Investment securities available for sale 175,329 100,716
Loans 5,558,889 4,711,487
Allowance for loan losses (32,700) (6,200)
--------------------------------
Net loans 5,526,189 4,705,287
Premises and equipment 15,726 9,438
Federal Home Loan Bank stock 46,200 43,000
Other assets 56,692 41,293
--------------------------------
Total assets $ 6,934,981 $ 6,288,646
--------------------------------
--------------------------------
LIABILITIES
Interest-bearing deposits $ 5,250,307 $ 5,308,464
Long-term debt 600,000
Other liabilities 98,660 85,285
--------------------------------
Total liabilities 5,948,967 5,393,749
--------------------------------
EQUITY CAPITAL
Retained earnings 872,685 830,813
Net unrealized gain on securities available for sale 113,329 64,084
--------------------------------
Total equity capital 986,014 894,897
--------------------------------
Total liabilities and equity capital $ 6,934,981 $ 6,288,646
--------------------------------
--------------------------------

</TABLE>

See notes to financial statements.

(F-3)
<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.

STATEMENT OF EQUITY CAPITAL
NET UNREALIZED
GAIN ON
SECURITIES
RETAINED AVAILABLE
EARNINGS FOR SALE TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BALANCES, MAY 1, 1996 $ 812,854 $ 48,686 $ 861,540
Net income for the eleven months ended
March 31, 1997 17,959 17,959
Net change in unrealized gain on securities
available for sale 15,398 15,398
--------------------------------------------------------
BALANCES, MARCH 31, 1997 830,813 64,084 894,897
Net income 41,872 41,872
Net change in unrealized gain on securities
available for sale 49,245 49,245
--------------------------------------------------------
BALANCES, MARCH 31, 1998 $ 872,685 $ 113,329 $ 986,014
--------------------------------------------------------
--------------------------------------------------------

</TABLE>

See notes to financial statements.

(F-4)
<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.

STATEMENT OF CASH FLOWS
YEAR ENDED Eleven Months
MARCH 31, Ended
1998 March 31, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 41,872 $ 17,959
Adjustments to reconcile net income to net cash
provided by operating activities
Provision for loan loss 26,500
Depreciation 1,344 891
Deferred income tax benefit (12,780) (6,709)
Change in
Other liabilities 789 (105)
Other assets (15,399) (1,557)
---------------------------------
Net cash provided by operating activities 42,326 10,479
---------------------------------
INVESTING ACTIVITIES
Net change in interest-bearing deposits 689,000 196,000
Net change in loans (847,404) (299,367)
Purchase of premises and equipment (7,632) (658)
Purchase of FHLB stock (3,200)
---------------------------------
Net cash used by investing activities (169,236) (104,025)
---------------------------------
FINANCING ACTIVITIES
Net change in
Savings deposits (6,239) (23,041)
Certificates of deposit (51,918) (151,125)
Proceeds from long-term debt 600,000
---------------------------------
Net cash (used) provided by financing activities 541,843 (174,166)
---------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 414,933 (267,712)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 109,912 377,624
---------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 524,845 $ 109,912
---------------------------------
---------------------------------
ADDITIONAL CASH FLOWS INFORMATION
Interest paid $ 306,925 $ 273,274
Income tax paid 25,500 5,438

</TABLE>

See notes to financial statements.

(F-5)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

- - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of Cerro Gordo Building and Loan, s.b.
("Bank") conform to generally accepted accounting principles and reporting
practices followed by the thrift industry. The more significant of the policies
are described below.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.

The Bank operates under a state thrift charter and provides full banking
services. As a state-chartered thrift, the Bank is subject to regulation by the
Illinois Office of Banks and Real Estate and the Federal Deposit Insurance
Corporation.

The Bank generates mortgage and share loans and receives deposits from customers
located primarily in Piatt County. The Bank's loans are generally secured by
specific items of collateral including real property and consumer assets.
Although the Bank has a diversified loan portfolio, a substantial portion of
its debtors' ability to honor their contracts is dependent upon economic
conditions in Piatt County and the surrounding communities.

CASH AND CASH EQUIVALENTS consist of cash on hand and deposits at the Federal
Home Loan Bank. The Bank considers all liquid debt instruments with original
maturities of 3 months or less to be cash equivalents.

INVESTMENT SECURITIES -- Marketable equity securities are classified as
available for sale. Securities available for sale are carried at fair value
with unrealized gains and losses reported separately in equity capital, net of
tax.

Amortization of premiums and accretion of discounts are recorded as interest
income from securities. Realized gains and losses are recorded as net security
gains (losses). Gains and losses on sales of securities are determined on the
specific-identification method.

LOANS are carried at the principal amount outstanding. Interest income is
accrued on the principal balances of loans. The accrual of interest on impaired
loans is discontinued when, in management's opinion, the borrower may be unable
to meet payments as they become due. When interest accrual is discontinued, all
unpaid accrued interest is reversed. Interest income is subsequently recognized
only to the extent cash payments are received. Certain loan fees and direct
costs are being deferred and amortized as an adjustment of yield on the loans.
Escrow accounts for borrowers are not maintained, but rather tax and insurance
payments are charged to the mortgage loan balance. Monthly payments are
allocated first to interest income with the remainder credited to the unpaid
balance of the loan.

ALLOWANCE FOR LOAN LOSSES is maintained to absorb loan losses based on
management's continuing review and evaluation of the loan portfolio and its
judgment as to the impact of economic conditions on the portfolio. The
evaluation by management includes consideration of past loss experience, changes
in the composition of the portfolio, the current condition and amount of loans
outstanding, and the probability of collecting all amounts due. Impaired loans
are measured by the present value of expected future cash flows, or the fair
value of the collateral of the loan, if collateral dependent.

(F-6)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

The determination of the adequacy of the allowance for loan losses is based on
estimates that are particularly susceptible to significant changes in the
economic environment and market conditions. Management believes that as of
March 31, 1998, the allowance for loan losses is adequate based on information
currently available. A worsening or protracted economic decline in the area
within which the Bank operates would increase the likelihood of additional
losses due to credit and market risks and could create the need for additional
loss reserves.

PREMISES AND EQUIPMENT are carried at cost net of accumulated depreciation.
Depreciation is computed using the straight-line method based on the estimated
useful lives of the assets. Maintenance and repairs are expensed as incurred
while major additions and improvements are capitalized. Gains and losses on
dispositions are included in current operations.

FEDERAL HOME LOAN BANK STOCK is a required investment for institutions that are
members of the Federal Home Loan Bank (FHLB) system. The required investment in
the common stock is based on a predetermined formula.

INCOME TAX in the statement of income includes deferred income tax provisions or
benefits for all significant temporary differences in recognizing income and
expenses for financial reporting and income tax purposes.

RECLASSIFICATIONS
Reclassifications of certain amounts in the 1997 financial statements have been
made to conform to the 1998 presentation.

- - CHANGE IN FISCAL YEAR END

During fiscal 1997, the Bank's Board of Directors approved a change in the
fiscal year end of the Bank from April 30 to March 31. Accordingly, the
statements of income, equity, and cash flows included in these financial
statements for fiscal 1997 are for the eleven-month period ended March 31, 1997.

- - PLAN OF CONVERSION

On March 11, 1998, the Board of Directors adopted a Plan of Conversion (the
"Plan)" whereby the Bank will convert from a state chartered mutual savings bank
to a state chartered stock savings bank. The Plan is subject to approval of
regulatory authorities and members at a special meeting. The stock of the Bank
will be issued to a holding company formed in connection with the conversion.
Pursuant to the Plan, shares of capital stock of the holding company are
expected to be offered initially for subscription to eligible members of the
Bank and certain other persons as of specified dates subject to various
subscription priorities as provided in the Plan. The capital stock will be
offered at a price to be determined by the Board of Directors based upon an
appraisal to be made by an independent appraisal firm. The exact number of
shares to be offered will be determined by the Board of Directors in conjunction
with the determination of the subscription price. At least the minimum number
of shares offered in the conversion must be sold. Any stock not purchased in
the subscription offering will be sold in a community offering to be commenced
simultaneously with the subscription offering.

(F-7)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

The Plan provides that when the conversion is completed, a liquidation account
will be established in an amount equal to the retained income of the Bank as of
the date of the most recent financial statements contained in the final
conversion prospectus. The liquidation account is established to provide a
limited priority claim to the assets of the Bank of qualifying depositors at
December 31, 1996, who continue to maintain deposits in the Bank after
conversion. In the unlikely event of a complete liquidation of the Bank, and
only in such event, eligible account holders would receive from the liquidation
account a liquidation distribution based on their proportionate share of the
then total remaining qualifying deposits.

Current regulations allow the Bank to pay dividends on its stock after the
conversion if its regulatory capital would not thereby be reduced below the
amount then required for the aforementioned liquidation account. Also, capital
distribution regulations limit the Bank's ability to make capital distributions
which include dividends, stock redemptions or repurchases, cash-out mergers,
interest payments on certain convertible debt and other transactions charged to
the capital account based on its capital level and supervisory condition.

At March 31, 1998, a $10,000 retainer had been paid to the underwriter which was
recorded as an other asset.

- - INVESTMENT SECURITIES AVAILABLE FOR SALE

1998
---------------------------------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED FAIR
MARCH 31 COST GAINS LOSSES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Federal Home Loan Mortgage
Corporation common stock $ 3,619 $ 171,710 $ 0 $ 175,329
---------------------------------------------------------------------
---------------------------------------------------------------------

</TABLE>

1997
---------------------------------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED FAIR
MARCH 31 COST GAINS LOSSES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Federal Home Loan Mortgage
Corporation common stock $ 3,619 $ 97,097 $ 0 $ 100,716
---------------------------------------------------------------------
---------------------------------------------------------------------

</TABLE>

There were no pledged securities at March 31, 1998 or 1997.

There were no sales of securities available for sale during 1998 or 1997.

(F-8)
<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

- - LOANS AND ALLOWANCE

MARCH 31, 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Real estate mortgage loans
One-to-four family $ 5,303,917 $ 4,680,155
Multi-family 87,348 95,128
Commercial 185,060 24,098
Share loans 79,534 133,586
---------------------------------
Total loans 5,655,859 4,932,967
Less
Undisbursed portion of loans (23,555) (156,598)
Deferred loan fees (73,415) (64,882)
---------------------------------
$ 5,558,889 $ 4,711,487
---------------------------------
---------------------------------

</TABLE>

MARCH 31, 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Allowance for loan losses
Balances, January 1 $ 6,200 $ 6,200
Provision for losses 26,500
Recoveries on loans
Loans charged off
---------------------------------
Balances, March 31 $ 32,700 $ 6,200
---------------------------------
---------------------------------

</TABLE>

There were no impaired loans as of or during the periods ending March 31, 1998
and 1997.

The Bank has entered into transactions with certain directors, employees, and
their affiliates or associates (related parties). Such transactions were made
in the ordinary course of business on substantially the same terms and
conditions, including interest rates and collateral, as those prevailing at the
same time for comparable transactions with other customers, and did not, in the
opinion of management, involve more than normal credit risk or present other
unfavorable features. The aggregate amount of loans, as deferred, to such
related parties were as follows:

1998
- --------------------------------------------------------------------------------
<S> <C>
Balances, April 1, 1997 $ 254,065
Changes in composition of related parties 93,000
New loans, including renewals
Payments, including renewals (74,986)
-----------
Balances, March 31, 1998 $ 272,079
-----------
-----------

</TABLE>
(F-9)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

- - PREMISES AND EQUIPMENT

MARCH 31 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Land $ 500 $ 500
Buildings and land improvements 21,382 21,382
Furniture and equipment 52,458 44,827
------------------------------
Total cost 74,340 66,709

Accumulated depreciation (58,614) (57,271)
------------------------------
Net $ 15,726 $ 9,438
------------------------------
------------------------------

</TABLE>

- - OTHER ASSETS AND OTHER LIABILITIES

MARCH 31 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Other assets
Interest receivable
Investment securities $ 2,855 $ 5,174
Loans 16,594 12,191
Prepaid expenses and other 37,243 23,605
------------------------------
Total $ 56,692 $ 41,293
------------------------------
------------------------------
Other liabilities
Interest payable
Deposits $ 51,219 $ 51,667
Long-term debt 3,286
Accrued expenses payable 10,501 12,550
Deferred tax liability 33,654 21,068
------------------------------
Total $ 98,660 $ 85,285
------------------------------
------------------------------

</TABLE>

- - DEPOSITS

MARCH 31 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings deposits $ 461,384 $ 409,467
Certificates of deposit of $100,000 or more 100,000 100,000
Other certificates of deposits 4,688,923 4,798,997
------------------------------
Total deposits $5,250,307 $5,308,464
------------------------------
------------------------------

</TABLE>
(F-10)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

CERTIFICATES MATURING IN YEARS ENDING MARCH 31,
- --------------------------------------------------------------------------------
<S> <C>
1999 $ 2,190,214
2000 1,469,142
2001 311,441
2002 618,536
------------
2003 199,590
$ 4,788,923
------------
------------

</TABLE>

- - LONG-TERM DEBT

At March 31, 1998, long-term debt consisted of a Federal Home Loan Bank (FHLB)
advance, 6.36%, due December 2007. The FHLB advance is secured by all stock in
the FHLB and first mortgage loans totaling $960,000.

- - INCOME TAX

PERIOD ENDED MARCH 31 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income tax expense
Currently payable
Federal $ 19,885 $ 7,036
State 3,597 1,051
Deferred
Federal (12,780) (6,709)
--------------------------------
Total income tax expense $ 10,702 $ 1,378
--------------------------------
--------------------------------
Reconciliation of federal statutory to actual tax expense
Federal statutory income tax at 34% $ 17,875 $ 6,575
Graduated tax rates (11,610) (5,841)
Effect of state income taxes 2,374 697
Other 2,063 (53)
--------------------------------
Actual tax expense $ 10,702 $ 1,378
--------------------------------
--------------------------------

</TABLE>

(F-11)
<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

A cumulative net deferred tax liability is included in other liabilities. The
components of the liability are as follows:

MARCH 31 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Loan fees $ 21,290 $ 18,817
Allowance for loan losses 5,828
---------------------------------
Total assets 27,118 18,817
---------------------------------
LIABILITIES
Accrual to cash adjustment (814) (2,523)
Depreciation (274) (274)
Allowance for loan losses (2,770)
Net unrealized gains on securities available for sale (58,379) (33,013)
FHLB stock dividends (1,305) (1,305)
---------------------------------
Total liabilities (60,772) (39,885)
---------------------------------
$ (33,654) $ (21,068)
---------------------------------
---------------------------------

</TABLE>

Retained earnings include approximately $125,000 for which no deferred income
tax liability has been recognized. This amount represents an allocation of
income to bad debt deductions as of April 30, 1988, for tax purposes only.
Reduction of amounts so allocated for purposes other than tax bad debt losses or
adjustments arising from carryback of net operating losses would create income
for tax purposes only, which income would be subject to the then-current
corporate income tax rate. The unrecorded deferred income tax liability on the
above amount was approximately $43,000.

- - COMMITMENTS AND CONTINGENT LIABILITIES

In the normal course of business there are outstanding commitments and
contingent liabilities, such as commitments to extend credit, which are not
included in the accompanying financial statements. The Bank's exposure to
credit loss in the event of nonperformance by the other party to the financial
instruments for commitments to extend credit is represented by the contractual
or notional amount of those instruments. The Bank uses the same credit policies
in making such commitments as it does for instruments that are included in the
balance sheet.

Financial instruments whose contract amount represents credit risk were as
follows:

MARCH 31 1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
Mortgage loan commitments -- fixed rates $ 0 $ 115,000

</TABLE>

(F-12)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Bank evaluates each customer's credit
worthiness on a case-by-case basis. The amount of collateral obtained, if
deemed necessary by the Bank upon extension of credit, is based on management's
credit evaluation. Collateral held varies but may include residential real
estate, income-producing commercial properties, or other assets of the borrower.

The Bank is subject to claims and lawsuits which arise primarily in the ordinary
course of business. It is the opinion of management that the disposition or
ultimate resolution of such claims and lawsuits will not have a material adverse
effect on the financial position of the Bank.

- - REGULATORY CAPITAL

The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies and is assigned to a capital category. The
assigned capital category is largely determined by three ratios that are
calculated according to the regulations: total risk adjusted capital, Tier 1
capital, and Tier 1 leverage ratios. The ratios are intended to measure capital
relative to assets and credit risk associated with those assets and off-balance
sheet exposures of the entity. The capital category assigned to an entity can
also be affected by qualitative judgments made by regulatory agencies about the
risk inherent in the entity's activities that are not part of the calculated
ratios.

There are five capital categories defined in the regulations, ranging from well
capitalized to critically undercapitalized. Classification of a bank in any of
the undercapitalized categories can result in actions by regulators that could
have a material effect on a bank's operations. At March 31, 1998 and 1997, the
Bank is categorized as well capitalized and met all subject capital adequacy
requirements. There are not conditions or events since March 31, 1998 that
management believes have changed the Bank's classification.

The Bank's actual and required capital amounts and ratios are as follows:

1998
--------------------------------------------------------------------------
REQUIRED FOR TO BE WELL
ACTUAL ADEQUATE CAPITAL (1) CAPITALIZED 1
--------------------------------------------------------------------------
MARCH 31 AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total risk-based capital (1) (to risk-
weighted assets) $ 906,000 28.58% $ 254,000 8.0% $ 317,000 10.0%
Tier (1) capital (1) (to risk-weighted assets) 873,000 27.54 127,000 4.0 190,000 6.0
Tier (1) capital (1) (to average assets) 873,000 12.55 278,000 4.0 349,000 5.0

</TABLE>
(F-13)
<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

1997
--------------------------------------------------------------------------
REQUIRED FOR ADEQUATE TO BE WELL
ACTUAL CAPITAL (1) CAPITALIZED (1)
--------------------------------------------------------------------------
MARCH 31 AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total risk-based capital (1) (to risk-
weighted assets) $ 837,000 31.35% $ 214,000 8.0% $ 267,000 10.0%

Tier (1) capital (1) (to risk-weighted assets) 831,000 31.12 107,000 4.0 160,000 6.0

Tier (1) capital (1) (to average assets) 831,000 13.07 254,000 4.0 318,000 5.0

(1) As defined by regulatory agencies

</TABLE>

- - BENEFIT PLANS

The Bank maintains a Simplified Employee Pension Plan for the benefit of
eligible employees. Contributions to the Plan are based on 15% of the
eligible participant's salary and were $12,753 and $11,487 during 1998 and
1997, respectively.

- - FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instrument:

CASH AND DUE FROM BANKS -- The fair value of cash and due from banks
approximates carrying value.

INTEREST-BEARING TIME DEPOSITS -- The fair value of interest-bearing time
deposits approximates carrying value.

SECURITIES -- Fair values are based on quoted market prices.

LOANS -- For short-term loans that reprice frequently and with no significant
change in credit risk, fair values are based on carrying values. The fair
values for mortgage loans, including one-to-four family residential, are
based on quoted market prices of similar loans sold in conjunction with
securitization transactions, adjusted for differences in loan characteristics.

INTEREST RECEIVABLE/PAYABLE -- The fair values of interest receivable/payable
approximate carrying values.

FHLB STOCK -- Fair value of FHLB stock is based on the price at which it may be
resold to the FHLB.

DEPOSITS -- The fair values of interest-bearing savings accounts are equal to
the amount payable on demand at the balance sheet date. The carrying amounts
for variable rate, fixed-term certificates of deposit approximate their fair
values at the balance sheet date. Fair values for fixed-rate certificates of
deposit are estimated using a discounted cash flow calculation that applies
interest rates currently being offered on certificates to a schedule of
aggregated expected monthly maturities on such time deposits.

(F-14)

<PAGE>

CERRO GORDO BUILDING AND LOAN, S.B.
NOTES TO FINANCIAL STATEMENTS

LONG-TERM DEBT -- The fair value of these borrowings are estimated using a
discounted cash flow calculation, based on current rates for similar debt.

OFF-BALANCE SHEET COMMITMENTS -- Commitments include commitments to originate
mortgage loans, and are generally of a short-term nature. The fair value of
such commitments are based on fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreements and the
counterparties' credit standing.

The estimated fair values of the Company's financial instruments are as
follows:

1998 1997
---------------------------------------------------------------------
CARRYING FAIR Carrying Fair
MARCH 31 AMOUNT VALUE Amount Value
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 524,845 $ 524,845 $ 109,912 $ 109,912
Interest-bearing time deposits 590,000 590,000 1,279,000 1,279,000
Investment securities available for sale 175,329 175,329 100,716 100,716
Loans, net 5,526,189 5,576,000 4,705,287 4,541,000
Interest receivable 19,449 19,449 17,365 17,365
Stock in FHLB 46,200 46,200 43,000 43,000

LIABILITIES
Deposits 5,250,307 5,271,000 5,308,464 5,258,000
Long-term debt 600,000 603,000 0 0
Interest payable 54,505 54,505 51,667 51,667

OFF-BALANCE SHEET ASSETS (LIABILITIES)
Commitments to extend credit 0 0 0 0

</TABLE>

(F-15)
<PAGE>

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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE HOLDING COMPANY OR SAVINGS BANK. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO,
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE HOLDING COMPANY OR SAVINGS BANK SINCE
ANY OF THE DATES AS OF THIS INFORMATION IS FURNISHED HEREIN OR SINCE THE DATE
HEREOF.

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

TABLE OF CONTENTS

<TABLE>

Page
----
<S> <C>
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
CGB&L FINANCIAL GROUP, INC.. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
CERRO GORDO BUILDING AND LOAN, s.b.. . . . . . . . . . . . . . . . . . . . . . . 14
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
DIVIDEND POLICY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
MARKET FOR COMMON STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
HISTORICAL AND PRO FORMA CAPITAL
COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
PRO FORMA DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
THE OFFERINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
STATEMENTS OF INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
BUSINESS OF THE SAVINGS BANK . . . . . . . . . . . . . . . . . . . . . . . . . . 37
MANAGEMENT OF THE HOLDING COMPANY
AND SAVINGS BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SUPERVISION AND REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
FEDERAL AND STATE TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
THE CONVERSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
RESTRICTIONS ON ACQUISITION OF THE
HOLDING COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . 87
CHANGE IN FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
REGISTRATION REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
TRANSFER AGENT AND REGISTRAR . . . . . . . . . . . . . . . . . . . . . . . . . . 88
LEGAL AND TAX OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
INDEX TO FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . .F-1

</TABLE>

UNTIL THE LATER OF NOVEMBER 8, 1998 OR 90 DAYS AFTER COMMENCEMENT OF
THE OFFERING OF COMMON STOCK, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

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CGB&L
FINANCIAL GROUP, INC.

MINIMUM OF 93,500 SHARES OF
COMMON STOCK WITH AN
ANTICIPATED MAXIMUM OF
126,500 SHARES OF COMMON STOCK

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

PROSPECTUS

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

TRIDENT SECURITIES, INC.

August 10, 1998

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