GENERAL. Blackhawk Bancorp, Inc. (the "Company") was incorporated under the laws of the state of Wisconsin in November 1989. The Company owns and operates a subsidiary financial institution, Blackhawk State Bank ("Bank") headquartered in Beloit, Wisconsin and owns 100% of the common securities of Blackhawk Statutory Trust I, which was formed in December 2002 for the purpose of issuing Trust Preferred Securities.

On September 30, 2003 the Company acquired DunC Corp. and its wholly owned subsidiary, First Bank, bc in a transaction accounted for as a purchase. The Company paid cash consideration of $7.2 million for DunC Corp. Immediately...