Jane O. Kosman - Page 8

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            continue to operate between Merriman and Crawford cast a cloud                                
            over the economic future of northwestern Nebraska.                                            
                  c.  Scottsbluff Area                                                                    
                  There was little reason to be optimistic about the                                      
            Scottsbluff area economy during the last half of 1986 and the                                 
            first half of 1987.  In the early 1980's, the Gering,                                         
            Scottsbluff, and Terrytown area had five commercial banks and two                             
            savings and loans.  Two of the banks failed in 1986.  Both of the                             
            savings and loans failed later.  The Scottsbluff area suffered                                
            the highest failure rate of financial institutions for any market                             
            area in Nebraska during the 1980's.  The financial outlook for                                
            Scottsbluff National Bank and Western National Bank was fair to                               
            poor in 1986.                                                                                 
            9.    Financial Condition of Scottsbluff National Bank in 1986-                               
                  1987                                                                                    
                  From 1981 to 1986, Scottsbluff National Bank had income,                                
            expenses, assets, liabilities, and stockholders' equity as                                    
            follows:                                                                                      
                                     Consolidated Income Statements for                                   
                                         Scottsbluff National Corp.                                       
                                          Years Ended December 31                                         
        1981          1982         1983         1984         1985         1986                            
        Interest                                                                                          
        income     $10,906,440  $12,318,774  $11,962,853  $12,777,147  $12,410,738  $14,307,419           
        Interest                                                                                          
        expense      6,786,820    8,042,931    7,804,350    8,195,381    7,361,058    8,233,708           
        Net interest                                                                                      
        income       4,119,620    4,275,843    4,158,503    4,581,766    5,049,680    6,073,711           
        Loan loss      156,071      664,383      426,334      590,135    1,540,000    1,320,000           





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