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FIRST
INDEPENDENCE
CORPORATION






2002 Annual Report






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TABLE OF CONTENTS

	Page
President's Message to Stockholders	1
Selected Consolidated Financial Information	2
Management's Discussion and Analysis	4
Report of Independent Certified Public Accountants	14
Consolidated Balance Sheets	15
Consolidated Statements of Earnings	17
Consolidated Statements of Comprehensive Income	18
Consolidated Statements of Stockholders' Equity	19
Consolidated Statements of Cash Flows	20
Notes to Consolidated Financial Statements	22
Stockholder Information	39
Directors and Executive Officers	40

ANNUAL MEETING

The Annual Meeting of Stockholders will be held at our main office located at Myrtle and Sixth Streets, Independence, Kansas at 10:30 a.m. Independence, Central Standard Time, on January 29, 2003.

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[LOGO] First Independence Corporation

To Our Stockholders, Depositors and Friends:

         It is my pleasure to present to you the 2002 Annual Report of First Independence Corporation, parent of First Federal Savings and Loan Association of Independence, which reflects results from our ninth complete year as a stock company. As you will see by reading the accompanying financial statements, First Independence had another excellent year with $2,032,000 in net earnings. Diluted earnings per share for the 2002 fiscal year were $2.09 based upon 974,485 weighted average common shares outstanding during the year ended September 30, 2002.

         An additional way to judge the strength of a company is by its capital. First Independence Corporations stockholders equity at September 30, 2002, was $14.6 million. This represents an equity-to-asset ratio of 9.34% and a book value per share of $15.92. This financial position has allowed First Independence Corporation to distribute to stockholders a portion of its net earnings in the form of a dividend. During fiscal 2002, a total dividend of $.4875 per share was authorized by the Board of Directors, which resulted in a payment to stockholders of an aggregate dividend of approximately $463,000. The current $.125 quarterly dividend per share represents an 11.1% increase over the fiscal 2001 quarterly dividend per share. As with every decision we make, our dividend policy is designed to take into consideration our responsibility to and interest in our stockholders.

         First Independence continues to be committed to our market. This is evidenced by the $43.7 million in loans originated by the company during the fiscal year. These loans provide funds for many people in our community to build, buy, remodel, or consolidate other financial obligations. Additionally, we strive to provide our savings customers a safe, secure bank where they can deposit their funds and earn a fair rate of return, as well as chose from the variety of accounts we offer. The success of this commitment is evidenced by the increase in deposits of $4.7 million, which translates to a 4.49% increase over last year.

         At our March Board meeting, the directors approved a resolution to open a new branch in Pittsburg, Kansas located in Crawford County. This area showed a 7.5% increase in population between 1990 and 2000 according to the 2000 census. Crawford County is the only county in Southeast Kansas to show a population increase during that time period. We look forward to expanding into this new and growing market.

         On behalf of the directors, officers and staff of First Federal and First Independence Corporation, we thank you for your continued support and confidence.

Sincerely,


Larry G. Spencer
President and Chief Executive Officer

MYRTLE & SIXTH • P.O. DRAWER 947 • INDEPENDENCE, KANSAS 67301 • 620/331-1660

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SELECTED CONSOLIDATED FINANCIAL INFORMATION

	September 30,
	2002	2001	2000	1999	1998
	(In Thousands)
Selected Financial Condition Data:
Total assets	$156,050	$152,730	$149,130	$138,131	$124,337
Cash and cash equivalents	12,336	2,293	1,921	1,440	914
Loans receivable	118,578	132,838	125,119	112,893	93,684
Loans held for sale	88	--	--	--	--
Mortgage-backed securities held to maturity	9,488	7,281	8,747	10,912	17,274
Investment securities held to maturity	10,321	4,195	6,496	7,005	5,000
Investment securities available for sale	--	1,014	1,992	2,000	3,418
Real estate acquired through foreclosure	730	356	423	109	72
Deposits	108,221	103,569	94,128	95,453	80,573
Advances from Federal Home Loan Bank	32,000	33,000	39,100	27,500	30,100
Total stockholders equity	14,577	14,175	13,764	13,107	12,099

	September 30,
	2002	2001	2000	1999	1998
	(In Thousands)
Selected Operations Data
Total interest income	$10,777	$11,931	$11,186	$10,101	$9,075
Total interest expense	5,520	6,967	6,562	5,989	5,556
Net interest income	5,257	4,964	4,624	4,112	3,519
Provision for loan losses	220	177	99	66	--
Net interest income after provision for
loan losses	5,037	4,787	4,525	4,046	3,519
Non-interest income	378	479	451	389	192
Non-interest expense	3,288	2,911	2,813	2,604	2,161
Earnings before income taxes and cumulative
effect of change in accounting principle	2,127	2,355	2,163	1,831	1,550
Income tax expense	777	814	787	688	649
Earnings before cumulative effect of change
in accounting principle	1,350	1,541	1,376	1,143	901
Cumulative effect of change in
accounting principle	682	--	--	--	--
Net earnings	$  2,032	$  1,541	$  1,376	$  1,143	$  901
Basic earnings per share	$   2.15	$   1.55	$   1.36	$   1.13	$   $  .98
Diluted earnings per share	$   2.09	$   1.49	$   1.30	$   1.07	$     .92

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FINANCIAL RATIOS

	September 30,
	2002	2001	2000	1999	1998
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on assets (ratio of net earnings to
average total assets)	1.33%	1.01%	0.95%	0.84%	0.75%
Interest rate spread information:
Average during period	3.18	2.89	2.83	2.69	2.52
End of period	2.93	2.65	2.59	2.58	2.29
Net interest margin (1)	3.52	3.34	3.26	3.11	2.99
Ratio of operating expense to average total
assets	2.04	1.92	1.92	1.89	1.80
Return on equity (ratio of net earnings to
average equity)	13.74	11.03	10.30	8.95	7.72
Quality Ratios:
Non-performing assets to total assets,
at end of period (2)	1.63	1.81	1.16	1.84	1.07
Allowance for loan losses to non-performing
assets, at end of period (2)	32.48	26.20	43.74	29.65	49.48
Allowance for loan losses to non-performing
loans at end of period	45.51	30.09	57.86	30.99	52.30
Capital Ratios:
Equity to total assets, at end of period	9.34	9.28	9.23	9.49	9.73
Average equity to average assets	9.67	9.19	9.21	9.38	9.70
Ratio of average interest-earning assets to
average interest-bearing liabilities	109.15	109.56	109.47	109.26	109.98
Dividend payout ratio (3)	23.33	29.36	29.81	31.54	31.25
Number of full service offices	3	3	3	3	2

(1)  Net interest income divided by average interest-earning assets.
(2)  Includes non-accruing loans, accruing loans delinquent 90 days or more and assets acquired through foreclosure.
(3)  Dividends paid per share divided by earnings per share.

EARNINGS PER SHARE GRAPH			DIVIDENDS PAID PER SHARE GRAPH
	Basic	Diluted
2002	$2.15	$2.09	2002 - $0.4875
2001	$1.55	$1.49	2001 - $0.4375
2000	$1.36	$1.30	2000 - $0.3875
1999	$1.13	$1.07	1999 - $0.3375
1998	$0.98	$0.92	1998 - $0.2875

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Managements Discussion and Analysis of Financial Condition and Results of Operations

General

         On October 5, 1993, First Federal Savings and Loan Association of Independence, Kansas ("First Federal" or the "Association") converted from a federally chartered mutual savings association to a federally chartered stock savings association and concurrently became a wholly-owned subsidiary of First Independence Corporation ("First Independence" or the "Company"). First Independence earnings are primarily dependent on the operations of First Federal. Currently, First Independence has no business activity other than acting as the holding company for First Federal. As a result, the following discussion relates primarily to the activities of First Federal. This discussion should be read in conjunction with the consolidated financial statements and accompanying notes included elsewhere in this report.

         Our business consists of attracting deposits from the general public and using these deposits primarily to make residential mortgage and other loans. Our revenues are derived principally from interest charges on mortgage loans and mortgage-backed securities and, to a lesser extent, from interest earned on investment securities and interest-bearing deposits. In addition, we receive fees from loan originations, late payments and for various services related to transaction and other deposit accounts, and dividends on our Federal Home Loan Bank stock. Operating expenses consist primarily of employee compensation and benefits, occupancy and equipment expenses, data processing fees and other general and administrative expenses.

         Our operations, and the operations of savings institutions and their holding companies in general, are significantly affected by general economic conditions and the related monetary and fiscal policies of regulatory agencies. Deposit flows and cost of funds are influenced by interest rates on competing investments and general market rates of interest. Lending activities are affected by the demand for financing of real estate and other types of assets, which in turn is affected by the interest rates at which such financing may be offered and other factors including the availability of funds. The primary sources of funds for lending activities include deposits, loan repayments and sales, borrowings, sales and maturities of securities available for sale and funds provided from operations.

Forward-Looking Statements

         Certain statements in this report that relate to our plans, objectives or future performance may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations. Actual strategies and results in future periods may differ materially from those currently expected because of various risks and uncertainties. Additional discussion of factors affecting our business and prospects is contained in our periodic filings with the Securities and Exchange Commission.

Asset/Liability Management and Market Risk

         Qualitative Aspects of Market Risk. We derive our income primarily from the excess of interest collected over interest paid. The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, our results of operations, like those of many financial institutions, are impacted by changes in interest rates. Our ability to adapt to changes in interest rates is known as interest rate risk, and is our most significant market risk.

         Quantitative Aspects of Market Risk. In an attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor our interest rate risk. In monitoring interest rate risk, we continually analyze and manage our assets and liabilities based on their payment streams and interest rates, the timing oftheir maturities, and their sensitivity to actual or potential changes in market interest rates.

         The matching of assets and liabilities may be analyzed by examining the extent to which they are "interest rate sensitive" and by monitoring an institutions interest rate sensitivity "gap." An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets anticipated, based upon certain assumptions, to mature or reprice within a specific time period and the amount of interest-bearing liabilities anticipated, based upon certain assumptions, to mature or reprice within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to adversely affect operations while a positive gap would tend to benefit operations. During a period of falling interest rates, the opposite would be expected to occur.

         Since the early 1980's, we have emphasized, subject to market conditions, the origination and holding of adjustable-rate mortgage loans and loans with shorter terms to maturity than traditional 30-year, fixed-rate loans. Our strategy has been to increase the percentage of assets in our portfolio with more frequent repricing or shorter maturities. In response to customer demand, however, we continue to originate for our loan portfolio fixed-rate mortgages with terms not greater than 30 years. In the past, we have also purchased adjustable-rate mortgage-backed securities. At September 30, 2002, approximately $26.2 million, or 21.7% of the total loans secured by real estate, were adjustable-rate mortgage loans. On the same date, we also had $4.3 million in adjustable-rate mortgage-backed securities.

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         Our adjustable-rate mortgage loans and mortgage-backed securities adjust to various indices. We monitor the mix of indices on our adjustable rate assets and seek, consistent with market conditions, to achieve a close match in the repricing characteristics of our assets and liabilities.

         To increase the interest rate sensitivity of our assets, we have also maintained short and intermediate-term investment securities and other assets. At September 30, 2002, we had $18.8 million of investment securities and interest-bearing deposits maturing or repricing within three years. Finally, we have undertaken various marketing programs from time to time over the last decade in order to extend the term of our deposit liabilities. We offer a longer term certificate of deposit program in an attempt to reduce deposit outflows which were being lost as a result of the general decline in market rates of interest. This program offers two certificate products which have 4- and 5-year terms. At September 30, 2002, we had approximately $11.5 million in these two products.

         In the future, in managing our interest rate sensitivity, we intend to continue to stress the origination ofadjustable-rate mortgage loans, subject to market conditions, the purchase of adjustable-rate mortgage-backed securities and the maintenance of a relatively high level of short-term securities and other assets.

         As part of our effort to monitor and manage interest rate risk, we use the "net portfolio value" methodology adopted by the Office of Thrift Supervision. This approach calculates the difference between the present value of expected cash flows from assets and liabilities, as well as cash flows from off balance sheet contracts, arising from an assumed 200 basis point increase or decrease in interest rates. The net portfolio value indicates the cushion of economic capital an association would retain should an adverse change in interest rates occur.

         Presented below, as of September 30, 2002, is an analysis of First Federals interest rate risk as measured by changes in net portfolio value for instantaneous and sustained parallel shifts in the yield curve, in 100 basis point increments, and compared to Board policy limits. The table was prepared and furnished to us by the Office ofThrift Supervision. Assumptions used in calculating the amounts in this table were determined by the Office ofThrift Supervision (dollars in thousands):

Interest Rate Sensitivity of Net Portfolio Value (NPV)

	Net Portfolio Value			NPV as % of PV of Assets
Change				Board Limit
In Rates	$ Amount	$ Change	% Change	NPV Ratio	NPV Ratio	Change
+200 bp	14,731	-2,309	-14%	7.00%	9.29%	-108 bp
+l00 bp	16,547	-493	-3	7.50	10.22	-15 bp
0 bp	17,040	--	--	8.00	10.37	--
-100 bp	16,661	-379	-2	8.50	10.02	-35 bp

         As illustrated in the table, we have structured our assets and liabilities to minimize our exposure to interest rate risk. In the event of a 100 basis point decrease in interest rates, we would experience a 2% decrease in net portfolio value while a 200 basis point increase in interest rates produces a 14% decrease in net portfolio value. During periods of rising interest rates, the value of monetary assets and liabilities generally decline. Conversely, during periods of falling interest rates, the value of monetary assets and liabilities generally increase. However, the amount of change in value of specific assets and liabilities due to changes in interest rates is not the same in a rising interest rate environment as in a falling interest rate environment (i.e., as indicated above, the amount of change in value under a specific rate decline may not equal the amount of change in value under an identical upward rate movement).

         Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage loans, have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase. As a result, the actual effect of changing interest rates may differ from that presented in the foregoing table.

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Management's Discussion and Analysis of Financial Condition and Results of Operations

         Asset Quality

         The ratio of non-performing assets to total assets is one indicator of our exposure to credit risk. Our non-performing assets consist of non-accruing loans, accruing loans delinquent 90 days or more, troubled debt restructurings, and foreclosed assets, which have been acquired as a result of foreclosure or deed-in-lieu of foreclosure. At September 30, 2002, non-performing assets were approximately $2,550,000, which represents a decrease of $208,000, or 7.5% as compared to September 30, 2001 . The ratio of non-performing assets to total assets at September 30, 2002 was 1.63% compared to 1.81% at September 30, 2001. Included in non-accruing loans at September 30, 2002, were twenty one loans totaling $1,351,000 secured by one- to four-family real estate, one construction loan totaling $212,000 secured by one- to four-family real estate and twelve consumer loans totaling $34,000. All non-accruing loans at September 30, 2002, were located in our primary market area except for two loans. The first loan totaled $304,000 and is secured by a single family residence located in Texas, while the second loan totaled $29,000 and is secured by a single family residence located in Wichita, Kansas. At September 30, 2002, accruing loans delinquent 90 days or more included seven loans totaling $223,000 secured by one- to four-family real estate. All of our accruing loans delinquent 90 days or more were secured by real estate located in our primary market area. At September 30, 2002, real estate acquired through foreclosure consisted of sixteen single family residences located in our primary market area. The properties have a total carrying value of $730,000 and are currently offered for sale.

         We have taken into account our non-performing assets and the composition of the loan portfolio in establishing our allowance for loan losses. The allowance for loan losses totaled $828,000 at September 30, 2002, which represented a $106,000 increase from the allowance for loan losses at September 30, 2001. The ratio ofthe allowance for loan losses as a percent oftotal loans increased from .54% at September 30, 2001 to .69% at September 30, 2002, partially due to the decrease in total loans receivable and partially due to the increase in the amount of the allowance at September 30, 2002. The allowance for loan losses as a percent of non-performing loans increased from 30.09% at September 30, 2001 to 45.51% at September 30, 2002, primarily due to the increase in the allowance for loan losses at September 30, 2002.

         The allowance for loan losses is determined based upon an evaluation of pertinent factors underlying the types and quality of our loans. We consider such factors as the repayment status of a loan, the estimated net realizable value of the underlying collateral, the borrowers ability to repay the loan, current and anticipated economic conditions which might affect the borrowers ability to repay the loan and our past statistical history concerning charge-offs.

NON-PERFORMING ASSETS TO TOTAL ASSETS GRAPH

2002 - 1.63%

2001 - 1.81%

2000 - 1.16%

1999 - 1.84%

1998 - 1.07%

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Results of Operations

         Average Balances, Interest Rates and Yields. The following table presents for the periods indicated the total dollar amount of interest income from average interest-earning assets and related yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. No tax equivalent adjustments were made. All average balances are monthly average balances. The use of monthly averages rather than daily averages does not have a significant effect upon our results. Non-accruing loans have been included in the table as loans carrying a zero yield.

	Year Ended September 30,
	2002			2001			2000
	Average Outstanding Balance	Interest Earned/ Paid	Yield/ Rate	Average Outstanding Balance	Interest Earned/ Paid	Yield/ Rate	Average Outstanding Balance	Interest Earned/ Paid	Yield/ Rate
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)	$125,915	$9,967	7.92%	$130,336	$10,764	8.26%	$120,198	$9,776	8.13%
Mortgage-backed securities	6,515	323	4.96	8,042	536	6.66	9,709	646	6.65
Investment securities	5,728	241	4.21	6,358	403	6.33	8,813	568	6.44
Federal Home Loan Bank stock	2,086	105	5.05	2,206	166	7.53	1,758	134	7.64
Federal funds sold	7,625	128	1.68	400	23	5.77	325	17	5.29
Other	1,360	13	0.92	1,355	39	2.86	848	45	5.26
Total interest-earning assets	149,229	10,777	7.22	148,697	11,931	8.02	141,651	11,186	7.90
Interest-bearing liabilities:
Demand and NOW deposits	35,560	685	1.93	32,744	1,227	3.75	32,490	1,333	4.10
Savings deposits and
certificates	71,965	3,195	4.44	64,389	3,467	5.38	61,931	3,219	5.20
Federal Home Loan Bank
advances	29,192	1,640	5.62	38,584	2,273	5.89	34,975	2,010	5.75
Total interest-bearing
liabilities	136,717	5,520	4.04	135,717	6,967	5.13	129,396	6,562	5.07
Net interest income		$5,257			$4,964			$4,624
Net interest rate spread			3.18%			2.89%			2.83%
Net earnings assets	$  12,512			$  12,980			$  12,255
Net yield on average
interest-earning assets			3.52%			3.34%			3.26%
Average interest-earning
assets to average interest-
bearing liabilities		109.15%			109.56%			109.47%

_____________
(1)  Calculated net of deferred loan fees, loan discounts, loans in process and loss reserves.

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Management's Discussion and Analysis of Financial Condition and Results of Operations

Rate/Volume Analysis ofNet Interest Income

         The following schedule presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (i.e., changes in volume multiplied by old rate) and (ii) changes in rate (i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.

	Year Ended September 30,
	2002 vs. 2001			2001 vs. 2000
	Increase (Decrease) Due to			Increase (Decrease) Due to
	Volume	Rate	Total Increase (Decrease)	Volume	Rate	Total Increase (Decrease)
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable	$  (358)	$  (439)	$  (797)	$  835	$ 153	$  988
Mortgage-backed securities	(91)	(122)	(213)	(111)	1	(110)
Investment securities	(37)	(125)	(162)	(155)	(10)	(165)
Federal Home Loan Bank stock	(9)	(52)	(61)	34	(2)	32
Federal funds sold	133	(28)	105	4	2	6
Other	--	(26)	(26)	20	(26)	(6)
Total interest-earning assets	(362)	(792)	(1,154)	627	118	745
Interest-bearing liabilities:
Demand and NOW deposits	98	(640)	(542)	10	(116)	(106)
Savings deposits and certificates	378	(650)	(272)	132	116	248
Federal Home Loan Bank advances	(533)	(100)	(633)	213	50	263
Total interest-bearing liabilities	$    (57)	$(1,390)	(1,447)	$355	$50	405
Net interest income			$   293			$   340

         The following table sets forth the weighted average yields on our interest-earning assets, the weighted average interest rates on interest-bearing liabilities and the interest rate spread between the weighted average yields and rates at the dates indicated. Non-accruing loans have been included in the table as carrying a zero yield.

	At September 30,
	2002	2001	2000
Weighted average yield on:
Loans receivable	7.39%	7.74%	8.00%
Mortgage-backed securities	5.01	5.82	7.08
Investment securities	3.78	6.15	6.62
Federal funds sold	1.60	2.75	6.38
Other interest-earning assets	--	--	--
Combined weighted average yield on
interest-earning assets	6.51	7.50	7.83
Weighted average rate paid on:
Savings deposits and certificates	3.83	5.31	5.35
Demand and NOW deposits	1.50	3.10	4.05
Federal Home Loan Bank advances	5.38	5.71	6.12
Combined weighted average rate paid
on interest-bearing liabilities	3.58	4.85	5.24
Spread	2.93	2.65	2.59

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FINANCIAL CONDITION

         Total assets increased $3.4 million, or 2.2%, from $1 52.7 million at September 30, 2001 to $156.1 million at September 30, 2002. This increase consisted primarily of increases in cash and cash equivalents of $10.0 million, investment securities of $5.1 million and mortgage-backed securities of $2.2 million. These increases in assets, along with reductions in advances from the Federal Home Loan Bank ofTopeka of $1.0 million and accrued expenses and other of $700,000, were funded by the redeployment of funds received from repayments of loans receivable of $14.2 million, and increases in deposits of $4.6 million. We are attempting to reduce the amount of excess cash by implementing a laddered investment strategy; however, loan payoffs and prepayments are currently exceeding our investment rate.

         Loans receivable decreased $14.2 million from $132.8 million at September 30, 2001, to $118.6 million at September 30, 2002. The decrease was primarily due to loan repayments (primarily due to refinancings), exceeding new loan originations. In accordance with the Companys asset/liability management strategy, we have chosen to limit the amount of 30-year fixed-rate loans placed in our portfolio. This is being accomplished by pricing our loan products held in portfolio above current market rates and selling market rate loans into the secondary market. Consequently, our loan portfolio has decreased during this period of declining interest rates as customers seek to lock in lower long-term fixed rates.

         Deposits increased $4.6 million from $103.6 million at September 30, 2001, to $108.2 million at September 30, 2002. The increase was primarily the result of a $2.9 million increase in certificate of deposit accounts due to customers depositing funds into the "Millennium" twelve month certificate account. To a lesser extent, the increase was due to new account growth at the Coffeyville, Kansas branch office. The "Millennium" twelve month certificate provides customers with a fixed interest rate throughout the term of the certificate along with the option to make additions of $1,000 or more during the certificates term. Due to the Millennium certificate interest rates being fixed at rates higher than current market rates, customers have continued to add to their certificate balances.

         Advances from the Federal Home Loan Bank decreased $1.0 million from $33.0 million at September 30, 2001 to $32.0 million at September 30, 2002. The decrease was primarily due to the repayment of scheduled principal payments using deposit funds obtained at an average rate less than the average rate currently being paid on advances. Most of the advances obtained from the Federal Home Loan Bank ofTopeka were used by the Company to fund loans originated at a positive spread over the term of the advances.

         Total stockholders equity increased $402,000 from $14.2 million at September 30, 2001 to $14.6 million at September 30, 2002. The increase was primarily due to net earnings of $2,032,000, common stock option exercises of $150,000, repayment ofemployee stock ownership debt of $20,000 and a fair value adjustment of $12,000 on ESOP shares committed for release. These increases were partially offset by the use of $1,341,000 to repurchase 88,579 shares of common stock, by dividends of $463,000 paid to stockholders and a decrease in unrealized gains on securities available for sale of $8,000.

TOTAL ASSETS GRAPH	LOANS GRAPH	STOCKHOLDERS' EQUITY TO TOTAL ASSETS GRAPH
2002 - $156,050 2001 - $152,730 2000 - $149,130 1999 - $138,131 1998 - $124,337	1-4 Family - 69.06% Multi-family - 0.87% Non-Residential - 7.88% Construction - 18.18% Home Equity - 1.12% Other Consumer - 2.89%	2002 - 9.34% 2001 - 9.28% 2000 - 9.23% 1999 - 9.49% 1998 - 9.73%

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Management's Discussion and Analysis of Financial Condition and Results of Operations

Comparison of Fiscal Years Ended September 30, 2002 and September 30, 2001

         General. Net earnings for the fiscal year ended September 30, 2002 were $2,032,000 as compared to $1,541,000 for the fiscal year ended September 30, 2001, an increase of $491,000, or 31.9%. The increase in net earnings was primarily due to the recognition of a $682,000 gain resulting from the cumulative effect of a change in accounting principle and, to a lesser extent, an increase in net interest income of $293,000 and a decrease in income tax expense of $37,000. These increases to net earnings were partially offset by increases in non-interest expense of $377,000 and the provision for loan losses of $43,000, and a decrease in non-interest income of $101,000. Excluding the cumulative effect of a change in accounting principle, net earnings for the fiscal year ended September 30, 2002, would have been $1,350,000 or a decrease of $191,000 from the fiscal year ended September 30, 2001.

         Net Interest Income. Net interest income increased $293,000, or 5.9%, for the fiscal year ended September 30, 2002 as compared to the fiscal year ended September 30, 2001. This increase was due primarily to a decrease in interest expense of $1,447,000, or 20.8%, offset partially by a decrease in interest income of $1,154,000, or 9.7%. Interest expense decreased primarily due to a 109 basis point decrease in the average rate paid on interest-bearing liabilities offset partially by a $1.0 million increase in the average balance of interest-bearing liabilities. Interest income decreased primarily due to an 80 basis point decrease in the average yield on interest-earning assets offset partially by a $531,000 increase in the average balance of interest-earning assets. This increase in spread is due to our negative gap position, which results in a greater amount of interest-bearing liabilities repricing more often than interest-earning assets. As our balance sheet becomes less interest rate sensitive in the future, or if we move to a positive gap position, we anticipate the benefits of a low interest rate environment to diminish. The ratio of average interest-earning assets to average interest-bearing liabilities decreased from 109.56% for the fiscal year ended September 30, 2001 to 109.15% for the fiscal year ended September 30, 2002.

         Interest Income. Interest income for the fiscal year ended September 30, 2002, decreased to $10.8 million from $11.9 million for the fiscal year ended September 30, 2001. This decrease resulted primarily from a decrease in the average yield on interest-earning assets. The average yield on interest-earning assets decreased by 80 basis points to 7.22% during fiscal year 2002, from 8.02% during fiscal year 2001. This decrease was caused primarily by the general decline in interest rates resulting in a reduction in yield on the Companys loan portfolio from 8.26% to 7.92%, mortgage-backed securities from 6.66% to 4.96%, investment securities from 6.33% to 4.21% and Federal Home Loan Bank stock from 7.53% to 5.05%. To a lesser extent, the decrease in yield was caused by a change in mix of interest-earning assets to a higher percentage of federal funds sold. This was due to decreases in the loans receivable, investment and mortgage-backed securities portfolios, all of which earn a higher rate of interest than federal funds sold. The decrease in the average yield was partially offset by a $531,000 increase in the average outstanding balance of interest-earning assets during the fiscal year ended September 30, 2002 as compared to the fiscal year ended September 30, 2001.

         Interest Expense. Interest expense for the fiscal year ended September 30, 2002, decreased by $1,447,000 to $5.5 million as compared to $7.0 million for the fiscal year ended September 30, 2001. This decrease was primarily the result of a 109 basis point decrease in the average interest rate paid on interest-bearing liabilities, caused by a decrease in interest rates on savings deposits and Federal Home Loan Bank advances. The decrease in the average interest rate paid was partially offset by a $1.0 million increase in the average outstanding balance of interest-bearing liabilities during the fiscal year ended September 30, 2002 as compared to the fiscal year ended September 30, 2001. The increase in interest-bearing liabilities was primarily due to a $10.4 million increase in the average balance of savings deposits offset partially by a $9.4 million decrease in the average balance of advances outstanding from the Federal Home Loan Bank of Topeka. The outstanding balance of advances was lower throughout the fiscal year than at year end due to a $4.0 million advance obtained during the last month of the fiscal year.

         Provision for Loan Losses. The provision for loan losses represents a charge to earnings to maintain the allowance for loan losses at a level we believe is adequate to absorb potential losses in the loan portfolio. The provision for loan losses amounted to $220,000 for the fiscal year ended September 30, 2002 as compared to $177,000 for the same period in 2001 . This increase in provision for loan losses was in recognition of managements assessment of relevant factors, including the types and amounts of non-performing loans, the continued increase in the amount of historical charge-offs and anticipated loss experience on such types of loans, and the current and projected economic conditions. We believe we use the best information available in providing for probable loan losses and we believe that the allowance is adequate at September 30, 2002. Future adjustments to the allowance could be necessary, however, and net earnings could be affected if circumstances and/or economic conditions differ substantially from the assumptions used in making the initial determinations.

NET EARNINGS GRAPH
(In Thousands)

2002 - $2,032
2001 - $1,541
2000 - $1,376
1999 - $1,143
1998 - $901

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         Noninterest Income. Noninterest income decreased $101,000 to $378,000 during the fiscal year ended September 30, 2002 as compared to $479,000 for the fiscal year ended September 30, 2001. The decrease was primarily due to a $94,000 reduction in negative goodwill amortization during the fiscal year ended September 30, 2002 as compared to the fiscal year ended September 30, 2001. The reduction in negative goodwill amortization was a result of the adoption of Statement of Financial Accounting Standards 141 and 142 as of October 1, 2001 . Recurring non-interest income generally consists of late charges and other fees associated with mortgage loans and checking and deposit account fees.

         NoninterestExpense. Total noninterest expense increased to $3.3 million for the fiscal year ended September 30, 2002 from $2.9 million for the fiscal year ended September 30, 2001, an increase of $377,000, or 12.9%. The increase was primarily due to increases in employee

         compensation and benefits of $ 190,000, foreclosed assets expense of $172,000 and occupancy and equipment of $28,000. These increases were partially offset by a decrease in other operating expense of $14,000. The increase in compensation and benefits expense was primarily the result of normal, annual cost of living increases in salaries and bonuses and, to a lesser extent, a reduction in loan originations resulting in less deferral of compensation expense. The increase in foreclosed assets expense was a result of an increase in the number of foreclosed assets, which contributed to an increase in real estate owned repairs and maintenance, taxes and insurance.

         Income Tax Expense. Income tax expense was $777,000 for the fiscal year ended September 30, 2002 compared to $814,000 for the fiscal year ended September 30, 2001, a decrease of $37,000. Our effective tax rates were 36.5% and 34.6% for the fiscal year ended September 30, 2002 and September 30, 2001, respectively, based on earnings before the cumulative effect of the change in accounting for negative goodwill. There is no income tax effect as a result of this change. However, rates were lower for the September 30, 2001 period due primarily to negative goodwill amortization which is not included in income for income tax calculation purposes, resulting in a lower effective tax rate.

         Liquidity and Capital Resources

         Our primary sources of funds are deposits, principal and interest payments on loans and mortgage-backed securities, Federal Home Loan Bank of Topeka advances and funds provided by operations. While scheduled loan and mortgage-backed security repayments and maturity of short-term investments are a relatively predictable source of funds, deposit flows are greatly influenced by general interest rates, economic conditions and competition. We use our liquid resources principally to meet ongoing commitments, to fund maturing certificates of deposit and deposit withdrawals, to invest, to fund existing and future loan commitments, to maintain liquidity, and to meet operating expenses. Current Office ofThrift Supervision regulations require First Federal to maintain adequate cash and eligible investments in order to meet our liquidity needs deemed necessary to fund deposit withdrawals and other short-term funding needs. Management believes that we have and will continue to have adequate liquidity for the foreseeable future. As of September 30, 2002, First Federals liquidity ratio was 13.04% as compared to 1.96% at September 30, 2001 . This increase in liquidity was primarily due to the reduction in the loan portfolio and reinvestment of the proceeds into liquid assets.

         Our primary investing activity is the origination of mortgage loans and the purchase of mortgage-backed and other securities. At September 30, 2002, mortgage loans and mortgage-backed securities accounted for 82.2% of total assets. We have been able to generate sufficient cash through the retail deposit market, our traditional funding source, and through short-term borrowings, to provide the cash utilized in investing activities. A line of credit has also been in place with the Federal Home Loan Bank of Topeka since 1995. Line of credit draws, as with all other credit transactions, are subject to the maximum amount of credit available under the Federal Home Loan Bank of Topekas credit policy. The line of credit is scheduled to mature on January 31, 2003, and will be renewed for another one-year term at that time. The line of credit is subject to various conditions, including the pledge of acceptable collateral. The primary purpose of the line of credit is to serve as a back-up liquidity facility, however, we may also utilize the line of credit to purchase investment securities and fund other commitments. At September 30, 2002, there was no outstanding balance on the line of credit.

         Liquidity management is both a daily and long-term responsibility of management. We adjust our investments in liquid assets based upon our assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-bearing deposits, and (iv) the objectives of our asset/liability management program. Excess liquidity is invested generally in interest-bearing overnight deposits and other short-term government and agency obligations. If we require additional funds, beyond our internal ability to generate, we have additional borrowing capacity with the Federal Home Loan Bank of Topeka of approximately $30.4 million at September 30, 2002.

         We anticipate that we will have sufficient funds available to meet current loan commitments. At September 30, 2002, we had outstanding commitments to extend credit which amounted to $2.6 million, including commitments on construction loans and unfunded lines of credit. We are not aware of any trends, events or uncertainties which will have or that are reasonably likely to have a material effect on our liquidity, capital resources or operations.

         Certificates of deposit scheduled to mature in one year or less at September 30, 2002 totaled approximately $42.4 million. We believe that a significant portion of these deposits will remain with First Federal. There can be no assurance, however, that we can retain all of these deposits. At September 30, 2002, we had $32.0 million in advances from the Federal Home Loan Bank of Topeka with $1.4 million maturing in one year or less.

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Management's Discussion and Analysis of Financial Condition and Results of Operations

         First Federal has minimum capital standards which generally require the maintenance of regulatory capital sufficient to meet each of three tests: the tangible capital requirement, the core capital requirement, and the risk-based capital requirement. The tangible capital requirement provides for minimum tangible capital (defined as retained earnings less all intangible assets) equal to 1.5% of adjusted total assets. The core capital requirement provides for minimum core capital (tangible capital plus supervisory goodwill) equal to 4.0% of assets. The risk-based capital requirement provides for the maintenance of core capital plus general loss allowances (less a specified percentage of certain equity investments) equal to 8.0% of risk-weighted assets. In computing risk-weighted assets, we multiply the book value of each asset on our balance sheet by a defined risk-weighting factor (e.g. , one- to four-family residential loans carry a risk-weighted factor of 50%). We have reviewed these capital standards and determined that we are in compliance with each of the three requirements. As of September 30, 2002, our tangible capital, core capital, and risk-based capital of $14.2 million, $14.2 million, and $15. 1 million exceeded the applicable minimum requirements by $11.9 million, $8.0 million, and $8.4 million, respectively.

         The following table sets forth our compliance with such requirements at September 30, 2002.

	Office of Thrift		First Federal's capital level
	Supervision requirement		at September 30, 2002
	% of		% of		Amount
Capital standard	Assets	Amount	Assets	Amount	of Excess
		(Dollars in Thousands)		(Dollars in Thousands)
Tangible capital	1.50%	$2,340	9.12%	$14,230	$11,890
Core capital	4.00	6,239	9.12	14,230	7,991
Risk-based capital	8.00	6,689	18.01	15,058	8,369

         See Note M of Notes to Consolidated Financial Statements for additional information.

         We have reviewed our regulatory restrictions relating to loans to one borrower, qualification as a qualified thrift lender, and other restrictions on lending and investment, and have determined that, based on our capital position and lending and investment policies, these restrictions have not had a material impact on our operations.

         Impact of lnflation and Changing Prices

         The financial statements and related data presented herein have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and results of operations in terms of historical dollars without considering changes in the relative purchasing power of money over time because of inflation. As a result, interest rates have a more significant impact on our 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.

         Effects of Recent Accounting Pronouncements

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 carries over the recognition and measurement provisions in SFAS No. 121. Accordingly, an entity must recognize an impairment loss if the carrying value of a long-lived asset or asset group (a) is not recoverable and (b) exceeds its fair value. Similar to SFAS No. 121 , SFAS No. 144 requires an entity to test an asset or asset group for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. SFAS No. 144 differs from SFAS No. 121 in that it provides guidance on estimating future cash flows to test recoverability. An entity may use either a probability-weighted approach or best-estimate approach in developing estimates of cash flows to test recoverability. SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. Management adopted SFAS No. 144 effective October 1, 2002, without material effect on the Companys financial condition or results of operations.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 provides financial accounting and reporting guidance for costs associated with exit or disposal activities, including one-time termination benefits, contract termination costs other than for a capital lease, and costs to consolidate facilities or relocate employees. SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. SFAS No. 146 is not expected to have a material effect on the Companys financial condition or results of operations.

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         In October 2002, the FASB issued SFAS No. 147, "Accounting for Certain Financial Institutions: An Amendment ofFASB Statements No. 72 and 144 and FASB Interpretation No. 9," which removes acquisitions of financial institutions from the scope of SFAS No. 72, "Accounting for Certain Acquisitions of Banking and Thrift Institutions," except for transactions between mutual enterprises. Accordingly, the excess ofthe fair value ofliabilities assumed over the fair value oftangible and intangible assets acquired in a business combination should be recognized and accounted for as goodwill in accordance with SFAS No. 141 , "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets."

         SFAS No. 147 also requires that the acquisition of a less-than-whole financial institution, such as a branch, be accounted for as a business combination if the transferred assets and activities constitute a business. Otherwise, the acquisition should be accounted for as the acquisition of net assets.

         SFAS No. 147 also amends the scope of SFAS No. 144, "Accounting for the Impairment or Disposal ofLong-Lived Assets," to include long-term customer relationship assets of financial institutions (including mutual enterprises) such as depositor- and borrower-relationship intangible assets and credit cardholder intangible assets.

         The provisions of SFAS No. 147 related to unidentifiable intangible assets and the acquisition of a less-than-whole financial institution are effective for acquisitions for which the date of acquisition is on or after October 1, 2002. The provisions related to impairment of long-term customer relationship assets are effective October 1, 2002. Transition provisions for previously recognized unidentifiable intangible assets are effective on October 1, 2002, with earlier application permitted.

         Management adopted SFAS No. 147 on October 1, 2002 without material effect on the Company's financial condition or results of operations.

         The foregoing discussion of the effects of recent accounting pronouncements contains forward-looking statements that involve risks and uncertainties. Changes in economic circumstances or interest rates could cause the effects of the accounting pronouncements to differ from managements foregoing assessment.

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
First Independence Corporation and Subsidiary

We have audited the accompanying consolidated balance sheets of First Independence Corporation and Subsidiary as of September 30, 2002 and 2001, and the related consolidated statements of earnings, comprehensive income, stockholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 referred to above present fairly, in all material respects, the consolidated financial position of First Independence Corporation and Subsidiary as of September 30, 2002 and 2001, and the consolidated results of their operations and their consolidated cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note B to the consolidated financial statements, the Corporation adopted Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets effective October 1, 2001.

Wichita, Kansas
November 1, 2002

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First Independence Corporation and Subsidiary

CONSOLIDATED BALANCE SHEETS

September 30,

ASSETS

			2002	2001
Cash and due from banks			$      626,399	$      388,664
Federal funds sold			10,000,000	700,000
Other interest-bearing deposits			1,709,170	1,204,563
		Cash and cash equivalents	12,335,569	2,293,227
Investment securities available for sale			--	1,013,700
Investment securities held to maturity (estimated
	fair value of $10,548,221 in 2002 and $4,238,780
	in 2001)		10,320,618	4,194,513
Mortgage-backed securities held to maturity
	(estimated fair value of $9,578,350 in 2002
	and $7,307,557 in 2001)		9,488,370	7,280,822
Loans receivable			118,578,448	132,838,231
Loans held for sale			88,000	--
Premises and equipment			1,510,688	1,472,029
Federal Home Loan Bank stock, at cost			1,996,800	2,265,000
Accrued interest receivable			770,529	944,606
Real estate acquired through foreclosure			730,252	356,325
Deferred taxes			93,958	--
Other			137,023	71,177
		Total assets	$156,050,255	$152,729,630

The accompanying notes are an integral part of these statements.

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LIABILITIES AND STOCKHOLDERS' EQUITY

				2002	2001
Deposits				$108,221,461	$103,569,165
Advances from borrowers for taxes and
	insurance			799,937	890,795
Income taxes payable				68,721	--
Advances from Federal Home Loan Bank				32,000,000	33,000,000
Accrued expenses and other				383,242	1,094,586
			Total liabilities	141,473,361	138,554,546
Stockholders' equity
	Preferred stock, $.01 par value, 500,000 shares
		authorized; none issued		--	--
	Common stock, $.01 par value, 2,500,000 shares
		authorized; 1,649,288 shares issued		16,493	16,493
	Additional paid-in capital			8,163,239	8,179,514
	Retained earnings - substantially restricted			14,536,885	12,968,146
	Accumulated other comprehensive income,
		net of related taxes		--	8,207
	Required contributions for shares acquired by
		Employee Stock Ownership Plan (ESOP)		(66,010)	(86,321)
	Treasury stock 733,691 shares in 2002 and
		672,651 shares in 2001 - at cost		(8,073,713)	(6,910,955)
			Total stockholders' equity	14,576,894	14,175,084
			Total liabilities and stockholders' equity	$156,050,255	$152,729,630

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First Independence Corporation and Subsidiary

CONSOLIDATED STATEMENTS OF EARNINGS

Year ended September 30,

			2002	2001
Interest income
	Loans		$  9,966,705	$10,764,416
	Mortgage-backed securities		323,046	535,656
	Investment securities		241,364	402,714
	Interest-bearing deposits and other		245,877	227,864
		Total interest income	10,776,992	11,930,650
Interest expense
	Deposits		3,880,022	4,693,601
	Borrowed funds		1,639,495	2,272,817
		Total interest expense	5,519,517	6,966,418
Net interest income			5,257,475	4,964,232
Provision for loan losses			220,425	177,000
Net interest income after provision for loan losses			5,037,050	4,787,232
Noninterest income
	Service charges		267,889	281,195
	Other		110,003	197,345
			377,892	478,540
Noninterest expense
	Employee compensation and benefits		1,824,208	1,634,166
	Occupancy and equipment		396,714	368,852
	Data processing fees		226,675	226,113
	Foreclosed assets, net		167,055	(5,101)
	Other operating		673,104	686,870
			3,287,756	2,910,900
Earnings before income taxes and cumulative effective of
	change in accounting principle		2,127,186	2,354,872
Income tax expense			777,230	813,649
Earnings before cumulative effect of change in accounting principle			1,349,956	1,541,223
Cumulative effect of change in accounting principle			681,922	--
		NET EARNINGS	$  2,031,878	$  1,541,223
Basic earnings per share
	Earnings before cumulative effect of change in accounting principle		$1.43	$1.55
	Cumulative effect of change in accounting principle		.72	--
		Net earnings per share	$2.15	$1.55
Fully diluted earnings per share
	Earnings before cumulative effect of change in accounting principle		$1.39	$1.49
	Cumulative effect of change in accounting principle		.70	--
		Net earnings per share	$2.09	$1.49

The accompanying notes are an integral part of these statements.

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First Independence Corporation and Subsidiary

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year ended September 30,

			2002	2001
Net earnings			$2,031,878	$1,541,223
Other comprehensive income (loss), net of tax
	Unrealized gains (losses) on securities available
		for sale arising during the period, net
		of income tax benefit of $5,030 in 2002 and
		income tax expense of $7,906 in 2001	(8,207)	12,899
Comprehensive income			$2,023,671	$1,554,122

The accompanying notes are an integral part of these statements.

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First Independence Corporation and Subsidiary

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Years ended September 30, 2002 and 2001

	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss), net	Required contributions for shares acquired by ESOP	Treasury stock	Total
Balance at October 1, 2000	$16,493	$8,190,682	$11,863,034	$(4,692)	$(106,632)	$(6,194,540)	$13,764,345
Net earnings for the year	--	--	1,541,223	--	--	--	1,541,223
Cash dividends of $.4375 per share	--	--	(436,111)	--	--	--	(436,111)
Common stock options exercised	--	(17,008)	--	--	--	147,898	130,890
Appreciation of securities available
for sale	--	--	--	12,899	--	--	12,899
ESOP loan repayments	--	--	--	--	20,311	--	20,311
Fair value adjustment on ESOP
shares committed for release	--	5,840	--	--	--	--	5,840
Purchase of 66,687 shares of
treasury stock	--	--	--	--	--	(864,313)	(864,313)
Balance at September 30, 2001	16,493	8,179,514	12,968,146	8,207	(86,321)	(6,910,955)	14,175,084
Net earnings for the year	--	--	2,031,878	--	--	--	2,031,878
Cash dividends of $.4875 per share	--	--	(463,139)	--	--	--	(463,139)
Common stock options exercised	--	(28,058)	--	--	--	178,024	149,966
Depreciation of securities available
for sale	--	--	--	(8,207)	--	-	(8,207)
ESOP loan repayments	--	--	--	--	20,311	--	20,311
Fair value adjustment on ESOP
shares committed for release	--	11,783	--	--	--	--	11,783
Purchase of 88,579 shares of
treasury stock	--	--	--	--	--	(1,340,782)	(1,340,782)
Balance at September 30, 2002	$16,493	$8,163,239	$14,536,885	$--	$(66,010)	$(8,073,713)	$14,576,894

The accompanying notes are an integral part of these statements.

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First Independence Corporation and Subsidiary

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended September 30,

					2002	2001
Cash flows from operating activities
	Net earnings				$2,031,878	$1,541,223
	Adjustments to reconcile net earnings to net cash
		provided by operating activities
			Provision for loan losses		220,425	177,000
			Depreciation		155,005	143,163
			Amortization of premiums and discounts on
				investments and mortgage-backed securities	35,554	24,209
			Amortization of deferred loan origination fees		(211,813)	(246,850)
			Amortization of expense related to employee
				benefit plans	32,094	26,151
			Negative goodwill		(681,922)	(94,058)
			(Gain) loss on sale of real estate acquired
				through foreclosure, net	15,578	(42,768)
			Deferred income taxes		94,916	2,848
			Gains on sales of loans receivable held for sale		(1,541)	-
			Originations of loans receivable held for sale		(235,120)	--
			Proceeds from sales of loans receivable held for sale		148,661	-
			Increase (decrease) in cash due to changes in
				Accrued interest receivable	174,077	15,367
				Other assets	(93,667)	(9,254)
				Accrued expenses and other liabilities	(5,967)	(34,801)
				Income taxes payable	(109,404)	(26,023)
				Net cash provided by operating activities	1,568,754	1,476,207
Cash flows from investing activities
	Proceeds from maturities and repayment of securities
		Available for sale			1,000,000	1,000,000
		Held to maturity			4,915,665	9,740,084
	Purchase of securities
		Held to maturity			(13,284,410)	(5,997,188)
	Loan purchases				--	(614,731)
	Net (increase) decrease in loans				13,317,156	(7,245,857)
	Purchase of Federal Home Loan Bank stock				--	(310,000)
	Capital expenditures				(304,220)	(211,950)
	Proceeds from redemption of Federal Home Loan Bank Stock				268,200	-
	Proceeds from sale of real estate acquired through
		foreclosure			653,714	359,811
			Net cash provided by (used in) investing activities		6,566,105	(3,279,831)

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First Independence Corporation and Subsidiary

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

Year ended September 30,

			2002	2001
Cash flows from financing activities
	Net increase in deposits		$4,652,296	$9,441,628
	Net increase (decrease) in advances from borrowers
	for taxes and insurance		(90,858)	3,715
	Advances from Federal Home Loan Bank		7,200,000	28,900,000
	Repayment of Federal Home Loan Bank advances		(8,200,000)	(35,000,000)
	Cash dividends paid		(463,139)	(436,111)
	Purchase of treasury stock		(1,340,782)	(809,051)
	Stock options exercised		149,966	75,628
		Net cash provided by financing activities	1,907,483	2,175,809
Net increase in cash and cash equivalents			10,042,342	372,185
Cash and cash equivalents at beginning of year			2,293,227	1,921,042
Cash and cash equivalents at end of year			$12,335,569	$  2,293,227
Supplemental disclosures of cash flow information
	Cash paid during the year for
	Income taxes		$     819,718	$     857,218
	Interest		5,593,654	7,022,819
	Noncash investing and financing activities
	Transfer from loans to real estate acquired
	through foreclosure		1,314,425	546,537
	Issuance of loans receivable in connection with
	the sale of real estate acquired through
	foreclosure		309,054	230,350
	Common stock received in payment of stock options
	exercised		60,690	55,262

The accompanying notes are an integral part of these statements.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 and 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES

First Independence Corporation (the "Corporation") is a savings and loan holding company whose activities are primarily limited to holding the stock of First Federal Savings and Loan Association of Independence (the "Association"). Future references to the Corporation or the Association are utilized herein as the context requires. The Association conducts a general banking business in southeastern Kansas which consists of attracting deposits from the general public and applying those funds to the origination of loans for residential, consumer and nonresidential purposes and the purchase of investment and mortgage-backed securities. The Association's profitability is significantly dependent on net interest income, which is the difference between interest income generated from interest-earning assets (i.e., loans and investments) and the interest expense paid on interest-bearing liabilities (i.e., customer deposits and borrowed funds). Net interest income is affected by the relative amount of interest-earning assets and interest-bearing liabilities and the interest received or paid on these balances. The level of interest rates paid or received by the Association can be significantly influenced by a number of environmental factors, such as governmental monetary policy, that are outside of management's control.

The consolidated financial information presented herein has been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and general accounting practices within the financial services industry. In preparing consolidated financial statements in accordance with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from such estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the valuation of real estate acquired through foreclosure.

The following is a summary of the Corporation's significant accounting policies which have been consistently applied in the preparation of the accompanying consolidated financial statements.

1. Principles of consolidation

The consolidated financial statements include the accounts of First Independence Corporation and its wholly-owned subsidiary, First Federal Savings and Loan Association of Independence. All significant intercompany balances and transactions have been eliminated.

2. Cash equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash, due from banks, federal funds sold and other overnight deposits.

3. Investment securities and mortgage-backed securities

Investment securities and mortgage-backed securities are classified in three categories and accounted for as follows: (a) debt securities that the Corporation has the positive intent and ability to hold to maturity are classified as held-to-maturity securities and reported at amortized cost, (b) debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings and (c) debt and equity securities not classified as either held-to-maturity securities or trading securities are classified as available-for-sale securities and reported at fair value, with unrealized gains and losses excluded from earnings and reported as the sole component of accumulated other comprehensive income in stockholders' equity.

Premiums and discounts on investment securities are amortized to operations over the term of the security using the level yield method. Premiums and discounts on mortgage-backed securities are amortized and accreted to operations using the level yield method over the estimated life of the underlying loans collateralizing the securities. Gains and losses on the sale of securities designated as available for sale are recorded using the specific identification method.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES - Continued

4. Loans receivable

Loans receivable that management has the intent and ability to hold until maturity or pay-off are reported at their outstanding principal balance, adjusted for charge-offs, the allowance for loan losses, unearned discounts and net deferred loan origination fees.

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectibility of the loans based on historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent, net of costs of disposal.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Corporation does not separately identify individual 1-4 family residential real estate, home equity or consumer loans for impairment disclosures.

Uncollectible interest on loans that are contractually past due is charged off or an allowance is established based on management's periodic evaluation. The allowance is established by a charge to interest income equal to all interest previously accrued. Income is subsequently recognized only to the extent cash payments are received until, in management's judgment, the borrower's ability to make periodic interest and principal payments is back to normal, in which case the loan is returned to accrual status. If the collection of principal in whole or in part is in doubt, all payments received on nonaccrual loans are credited to principal until such doubt is eliminated.

5. Loan origination fees and related costs

Loan origination fees received, net of certain direct origination costs are deferred on a loan-by-loan basis and amortized to interest income over the contractual life of the loan using the interest method, giving effect to actual loan prepayments. Loan origination costs are considered to be direct costs attributable to originating a loan.

6. Loans held for sale

Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES - Continued

7. Real estate acquired through foreclosure

Real estate properties acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value at the date of foreclosure establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

8. Premises and equipment

Premises and equipment are carried at cost less accumulated depreciation. Depreciation is included in occupancy and equipment expense and is provided by the straight-line method over the following estimated useful lives:

	Years
Building	8-50
Furniture, fixtures and equipment	5-20
Automobiles	5

The costs of maintenance and repairs are charged to operations as incurred. The costs of significant additions, renewals and betterments to depreciable properties are capitalized and depreciated over the remaining or extended estimated useful lives of the properties. Gains and losses on disposition of property and equipment are included in operations.

9. Employee stock ownership plan

The Corporation sponsors a leveraged employee stock ownership plan (ESOP). The ESOP holds company stock which serves as collateral for the ESOP debt. As shares are released from collateral, the Corporation reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings-per-share ("EPS") computations. Dividends on released and allocated ESOP shares are recorded as a reduction of retained earnings; dividends on unallocated ESOP shares are recorded as compensation cost.

10. Stock-based compensation

The Corporation uses the intrinsic value based method of accounting for stock options. Under the intrinsic method, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Corporation's stock over the exercise price at the measurement date.

11. Income taxes

First Independence Corporation and its subsidiary file a consolidated federal income tax return. Deferred tax assets and liabilities are determined based on the differences between the financial accounting and tax basis of assets and liabilities. Deferred tax assets or liabilities at the end of each period are determined using the currently enacted tax rate expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be settled or realized.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES - Continued

12. Earnings per share

Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the year. Diluted earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the year plus the common share equivalents related to outstanding stock options. Weighted average common shares outstanding and diluted shares deemed outstanding are as follows:

	Year ended September 30,
	2002	2001
Weighted average common shares outstanding	945,878	991,799
Common share equivalents related to outstanding stock options	28,607	39,699
Adjusted weighted average common shares    deemed to be outstanding	974,485	1,031,498

Common shares outstanding exclude unallocated and committed shares held by the ESOP trust.

NOTE B - CHANGE IN ACCOUNTING PRINCIPLE

The Corporation elected to adopt Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets effective October 1, 2001. SFAS 141 requires that the amount of any unamortized deferred credit related to an excess of fair value of acquired net assets over cost (negative goodwill) arising from a business combination for which the acquisition date was before July 1, 2001, be written off and recognized as the effect of a change in accounting principle.

The cumulative effect of this change in accounting for negative goodwill of $681,922 is determined as of October 1, 2001 and is reported separately in the consolidated statement of earnings for the year ended September 30, 2002. There is no income tax effect as a result of this change. Prior years' financial statements have not been restated to apply the provisions of SFAS 141.

The effect on net earnings for the year ended September 30, 2002 of adopting SFAS 141 was to increase net earnings $587,864 and basic and diluted earnings per share $.62 and $.60, respectively.

The following pro forma schedule summarizes the net earnings and per share data for the year ended September 30, 2001 as if the accounting change was made retroactively.

	Year ended September 30, 2001
Net earnings - as reported	$1,541,223
Net earnings - pro forma	1,447,165
Basic earnings per share - as reported	$         1.55
Basic earnings per share - pro forma	1.46
Diluted earnings per share - as reported	1.49
Diluted earnings per share - pro forma	1.40

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE C - INVESTMENT SECURITIES

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair value of investment securities are as follows:

	September 30, 2002
Held to maturity	Amortized cost	Gross unrealized gains	Gross unrealized losses	Estimated fair value
U.S. Government and agency obligations	$10,122,133	$221,908	$         --	$10,344,041
Municipal securities	198,485	5,695	--	202,580
	$10,320,618	$227,603	$         --	$10,548,221
	September 30, 2001
Held to maturity	Amortized cost	Gross unrealized gains	Gross unrealized losses	Estimated fair value
U.S. Government and agency obligations	$3,997,262	$38,938	$         -	$4,036,200
Municipal securities	197,251	5,329	-	202,580
	$4,194,513	$44,267	$         -	$4,238,780
Available for sale
U.S. Government agency obligations	$1,000,462	$13,238	$         -	$1,013,700

The amortized cost and estimated fair value of investment securities at September 30, 2002, by term to maturity are as follows:

	Amortized cost	Estimated fair value
Held to maturity
Due in less than one year	$  1,000,000	$  1,018,400
Due in one to two years	4,074,192	4,113,900
Due in two to five years	5,246,426	5,415,921
	$10,320,618	$10,548,221

Investment securities with an estimated fair value of $6,262,260 and $5,052,550 at September 30, 2002 and 2001, respectively, are pledged to secure government deposits.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE D - MORTGAGE-BACKED SECURITIES

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair value of mortgage-backed securities are summarized as follows:

	September 30, 2002
Held to maturity	Amortized cost	Gross unrealized gains	Gross unrealized losses	Estimated fair value
GNMA certificates	$     27,135	$   3,758	$           --	$       30,893
FHLMC certificates	1,556,531	50,522	--	1,607,053
FNMA certificates	5,444,276	46,241	(3,739)	5,486,778
Collateralized mortgage obligations
FHLMC	849,920	4,250	--	854,170
FNMA	1,610,508	--	(11,052)	1,599,456
	$9,488,370	$104,771	$(14,791)	$9,578,350

	September 30, 2001
Held to maturity	Amortized cost	Gross unrealized gains	Gross unrealized losses	Estimated fair value
GNMA certificates	$     27,839	$   3,955	$          --	$     31,794
FHLMC certificates	2,305,770	64,106	--	2,369,876
FNMA certificates	1,895,740	57,699	(1,722)	1,951,717
Collateralized mortgage obligations
FHLMC	1,050,742	--	(67,639)	983,103
FNMA	2,000,731	--	(29,664)	1,971,067
	$7,280,822	$125,760	$(99,025)	$7,307,557

Mortgage-backed securities generally mature ratably over the 30-year term of the underlying loans collateralizing the securities. Expected maturities on mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Mortgage-backed securities with an estimated fair value of $5,417,093 and $7,280,004 at September 30, 2002 and 2001, respectively, are pledged to secure government and other deposits.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE E - LOANS RECEIVABLE

Loans receivable at September 30 are summarized as follows:

	2002	2001
First mortgage loans
One-to-four family residences	$86,898,362	$93,534,426
Multi-family residences	1,094,113	864,571
Nonresidential	9,924,434	12,238,965
Construction	22,900,470	32,731,094
Total first mortgage loans	120,817,379	139,369,056
Consumer and other loans
Savings	466,360	486,793
Automobile	2,337,795	2,540,700
Home equity and second mortgages	1,413,040	1,300,883
Unsecured home improvement	79,082	86,425
Other	753,868	748,886
Total consumer and other loans	5,050,145	5,163,687
Less
Allowance for loan losses	(828,335)	(722,682)
Loans in process	(6,176,305)	(10,613,506)
Unearned discounts	(5,066)	(6,453)
Deferred loan origination fees	(279,370)	(351,871)
	(7,289,076)	(11,694,512)
Net loans receivable	$118,578,448	$132,838,231

Activity in the allowance for loan losses is summarized as follows for the years ended September 30:

	2002	2001
Balance at beginning of year	$ 722,682	$ 758,333
Provision	220,425	177,000
Loans charged off	(121,569)	(212,651)
Recoveries of loans previously charged off	6,797	--
Balance at end of year	$ 828,335	$ 722,682

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE E - LOANS RECEIVABLE - Continued

The Association's lending efforts have historically focused on one-to-four family residential real estate loans, which comprise approximately 69% (2002) and 65% (2001) of the total loan portfolio. Approximately 2% (2002 and 2001) of the Association's one-to-four family residential real estate loans are collateralized by properties located outside of the primary lending area of Montgomery and surrounding Kansas counties. Generally, such loans have been underwritten on the basis of 80% to 90% loan-to-value ratio or mortgage insurance was required. The Association, as with any lending institution, is subject to the risk that real estate values could deteriorate in its primary lending area thereby impairing collateral values. Management believes, however, that real estate values in the Association's primary lending area are currently stable.

During the year ended September 30, 1998 the Association began originating construction loans at its new loan production office in Lawrence, Kansas. These construction loans generally are to builders and individuals for the construction of residences and have terms of nine months or less with permanent financing provided by other lenders. Construction loans comprise approximately 18% (2002) and 23% (2001) of the Association's total loan portfolio.

Approximately 9% (2002 and 2001) of the loan portfolio is comprised of nonresidential and multi-family real estate loans with approximately 2% (2002 and 2001) of this total collateralized by properties located outside the Association's primary lending area.

Serviced loans were $611,718 and $559,530 at September 30, 2002 and 2001, respectively.

In the normal course of business, the Association makes loans to directors, executive officers and related entities. An analysis of aggregate loan activity with this group is as follows:

Loans outstanding at October 1, 2001	$  680,886
Repayments	(114,715)
Loans outstanding at September 30, 2002	$   566,171

Loan impairment is measured by estimating the expected future cash flows and discounting them at the respective effective interest rate or by valuing the underlying collateral. The recorded investment in these loans and the valuation allowance for losses related to loan impairment at September 30, 2001 are as follows:

Principal amount of impaired loans	$  670,095
Less valuation allowance	(3,505)
	$  636,590
Average investment in impaired loans	$  428,577

There were no impaired loans at September 30, 2002 that are not collectively evaluated in large groups of smaller balance homogeneous loans.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE F - ACCRUED INTEREST RECEIVABLE

Accrued interest receivable at September 30 is summarized as follows:

	2002	2001
Loans receivable	$675,660	$860,870
Investment securities	48,156	38,678
Mortgage-backed securities	46,713	45,058
	$  770,529	$  944,606

NOTE G - PREMISES AND EQUIPMENT

Premises and equipment at September 30 are summarized as follows:

	2002	2001
Land	$  206,789	$74,958
Building	1,473,924	1,451,459
Furniture, fixtures and equipment	700,246	669,426
Automobiles	29,499	29,499
	2,410,458	2,225,342
Less accumulated depreciation	899,770	753,313
	$1,510,688	$1,472,029

NOTE H - FORECLOSED ASSETS

A summary of income (expenses) applicable to foreclosed assets is as follows for the years ended September 30:

	2002	2001
Gain (loss) on sale of real estate acquired
through foreclosure, net	$   (4,858)	$ 42,768
Operating expenses	(162,197)	(37,667)
Foreclosed asset income (expense), net	$(167,055)	$   5,101

Operating expenses on foreclosed assets consist primarily of property taxes and general maintenance expenses on the properties held.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE I - DEPOSITS

Deposits at September 30 are summarized as follows:

	Weighted average rate at September 30,		2002		2001
	2002	2001	Amount	Percent	Amount	Percent
NOW accounts	.25%	1.28%	$   5,293,229	4.89%	$   5,376,751	5.19%
First Super NOW accounts	.49	1.52	3,164,836	2.92	3,167,848	3.06
First Money Fund accounts	1.90	3.61	27,207,762	25.14	26,463,910	25.55
Total demand deposits	1.60	3.16	35,665,827	32.95	35,008,509	33.80
Passbook savings accounts	1.26	2.71	6,208,341	5.74	5,109,467	4.93
Certificates of deposit
1.00% to 1.99%	1.74	--	1,151,389	1.06	--	--
2.00% to 2.99%	2.76	--	6,771,211	6.26	--	--
3.00% to 3.99%	3.41	3.63	31,576,069	29.18	1,262,154	1.22
4.00% to 4.99%	4.58	4.70	11,891,821	10.99	12,536,691	12.11
5.00% to 5.99%	5.58	5.59	11,728,531	10.84	31,981,793	30.88
6.00% to 6.99%	6.14	6.33	3,228,272	2.98	17,670,551	17.06
Total certificates of deposit	4.04	5.58	66,347,293	61.31	63,451,189	61.27
Total savings	3.80	5.37	72,555,634	67.05	68,560,656	66.20
Total deposits	3.08	4.62	$108,221,461	100.00%	$103,569,165	100.00%

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The aggregate amount of certificates of deposit and savings with a minimum denomination of $100,000 was $10,045,337 and $7,617,501 at September 30, 2002 and 2001, respectively.

First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE I - DEPOSITS - Continued

Scheduled maturities of certificates of deposit are as follows:

September 30, 2002
	Less than one year	One to three years	Three to five years	Total
1.00% to 1.99%	$   1,151,389	$               --	$              --	$   1,151,389
2.00% to 2.99%	5,436,802	1,334,409	--	6,771,211
3.00% to 3.99%	21,409,544	10,067,062	99,453	31,576,069
4.00% to 4.99%	7,264,897	1,209,067	3,417,857	11,891,821
5.00% to 5.99%	6,967,906	3,013,711	1,746,914	11,728,531
6.00% to 6.99%	122,190	1,689,426	1,416,646	3,228,272
	$42,352,728	$17,313,685	$6,680,880	$66,347,293
September 30, 2001
	Less than one year	One to three years	Three to five years	Total
3.00% to 3.99%	$   1,252,802	$         9,352	$               -	$   1,262,154
4.00% to 4.99%	5,736,916	6,730,823	68,952	12,536,691
5.00% to 5.99%	20,455,157	9,011,860	2,514,776	31,981,793
6.00% to 6.99%	14,496,872	658,207	2,515,472	17,670,551
	$41,941,747	$16,410,242	$5,099,200	$63,451,189

Interest expense on deposits for the years ended September 30 is summarized as follows:

	2002	2001
NOW accounts	$    11,437	$    74,125
First Super NOW and First Money Fund accounts	673,961	1,152,193
Certificates of deposit and passbook savings accounts	3,194,624	3,467,283
	$  3,880,022	$  4,693,601

NOTE J - ADVANCES FROM FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank at September 30 consist of the following:

	2002		2001
	Rates	Amount	Rates	Amount
Fixed rates	4.02 - 5.65%	$  5,000,000	5.65 - 6.74%	$  6,000,000
Fixed rate convertible*	4.60 - 6.34	27,000,000	4.60 - 6.34	27,000,000
		$32,000,000		$33,000,000

*The Federal Home Loan Bank has the option to convert $16,000,000 in the year ending 2003 and $11,000,000 in the year ending 2004 to its variable short-term rate. These advances are due in 2008 through 2011 unless converted, at which time the Corporation has the option to prepay the advances.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE J - ADVANCES FROM FEDERAL HOME LOAN BANK - Continued

The Association can borrow a maximum of approximately $62,000,000 from the Federal Home Loan Bank at September 30, 2002.

Assets of the Association are subject to a blanket pledge agreement to collateralize the advances.

Aggregate maturities for the years following September 30, 2002 are as follows:

2003	$1,371,553
2004	499,800
2005	498,412
2006	379,033
2007	351,310
Thereafter	28,899,892
	$32,000,000

NOTE K - EMPLOYEE BENEFITS

The Corporation sponsors a leveraged employee stock ownership plan ("ESOP") that covers all full-time employees. All employees of the Corporation are eligible to participate in the ESOP after they attain age 21 and complete one year of service during which they work at least 1,000 hours. The Corporation makes annual contributions to the ESOP equal to at least the ESOP's debt service. All dividends received by the ESOP are credited to the employee's stock ownership account. The unallocated ESOP shares are pledged as collateral for its debt. As the debt is repaid, shares are released from collateral and allocated to active employees, based on the proportion of debt service paid in the year. Accordingly, unpaid ESOP debt is reflected as a deduction from stockholders' equity. ESOP compensation expense was $156,158 and $150,740 (including annual $120,000 cash contributions) for the years ended September 30, 2002 and 2001, respectively.

The ESOP shares as of September 30, 2002 were as follows:

Allocated shares	111,442
Unreleased shares	7,007
Total ESOP shares	118,449
Fair value of unreleased shares at September 30, 2002	$109,029

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE K - EMPLOYEE BENEFITS - Continued

The Corporation has adopted a Stock Option and Incentive Plan (SOP) for designated participants. The SOP provides for up to 145,474 shares of common stock to be issued to participants. The option price of any options granted may not be less than the market value of the common stock on the date of the grant and unless otherwise specified, the options expire ten years from the date of the grant. All options outstanding at September 30, 2002 are exercisable except 6,164 options which vest equally over five years from the date of the grant. A summary of the Corporation's stock option plan as of September 30, 2002 and 2001 and changes during the years ended as of those dates is presented below:

	Shares	Weighted average exercise price
Outstanding at October 1, 2000	99,729	$   5.74
Issued	3,000	13.28
Exercised	(24,963)	5.24
Forfeited	(900)	10.06
Outstanding at September 30, 2001	76,866	5.97
Exercised	(27,539)	5.45
Outstanding at September 30, 2002	49,327	6.27
Exercisable
September 30, 2001	68,121	$   5.28
September 30, 2002	43,163	5.52

Options outstanding at September 30, 2002 are summarized as follows:

Shares	Exercise price	Remaining life
37,168	$   5.00	1 year
1,000	14.63	5 years 1 month
8,159	10.06	6 years 4 months
3,000	13.28	8 years 10 months
49,327

The stock option plan is accounted for under APB Opinion 25 and related interpretations. The options are exercisable at not less than the market value of the Corporation's stock on the date of grant. Accordingly, no compensation cost has been recognized for the plan. Had compensation cost for the plan been determined based on the fair value of the options at the grant dates consistent with the fair value method of Statement of Financial Accounting Standards 123, Accounting for Stock-Based Compensation (SFAS 123), the Corporation's net earnings and earnings per share for the years ended September 30 would have been reduced to the pro forma amounts indicated below.

	2002	2001
Net earnings - as reported	$2,031,878	$1,541,223
Net earnings - pro forma	2,021,159	1,530,504
Earnings per share
Basic - as reported	$1.43	$1.55
Basic - pro forma	1.42	1.54
Diluted - as reported	1.39	1.49
Diluted - pro forma	1.38	1.48

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE K - EMPLOYEE BENEFITS - Continued

The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model.

The Association participates in a defined benefit multi-employer pension plan. Substantially all employees are eligible and benefits are based on the employee's salary and years of service. No contribution was made or required to be made by the Association for the years ended September 30, 2002 and 2001 due to the plan's overfunded status. Separate actuarial disclosure information is not available due to the plan being a multi-employer pension plan.

NOTE L - INCOME TAXES

Income tax expense for the years ended September 30 consists of the following:

	2002	2001
Current	$682,314	$810,801
Deferred	94,916	2,848
	$777,230	$813,649

Reconciliation of income tax expense computed at the federal statutory rate of 34% and income tax expense for the years ended September 30 is as follows:

	2002	2001
Income tax expense at statutory rate	$723,243	$800,656
Kansas privilege tax, net of federal tax benefit	59,438	66,322
Nondeductible ESOP fair value adjustment	4,356	2,159
Other	(9,807)	(55,488)
	$777,230	$813,649

The tax effects of temporary differences that give rise to deferred tax assets and liabilities at September 30 are as follows:

	2002	2001
Deferred tax assets
Allowance for loan losses	$307,333	$281,194
Accrued bonuses	18,870	15,540
Depreciation of property and equipment	80,148	85,005
Total deferred tax assets	406,351	381,739
Deferred tax liabilities
Securities available for sale	--	4,931
Federal Home Loan Bank stock dividends	286,084	348,318
Other	26,309	34,479
Total deferred tax liabilities	312,393	387,728
Net deferred tax asset (liability)	$  93,958	$  (5,989)

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE L - INCOME TAXES - Continued

Prior to 1997 the Association was allowed a special bad debt deduction, generally limited to 8% of otherwise taxable income subject to certain limitations based on aggregate loans and deposit account balances at the end of the year. If the amounts that qualified as deductions for federal income taxes are later used for purposes other than for bad debt losses, including distributions in liquidation, such distributions will be subject to federal income taxes at the then current corporate income tax rate. Retained earnings at September 30, 2002, includes approximately $2.9 million for which federal income taxes have not been provided. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction at September 30, 2002, is approximately $1,000,000.

NOTE M - STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL

The Association is subject to various regulatory capital requirements administered by the Office of Thrift Supervision (OTS). Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Association's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Association must meet specific capital guidelines that involve quantitative measures of the Association's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Association's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Association to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets and of Tier 1 (core) capital and tangible capital to adjusted total assets. Management believes, as of September 30, 2002, that the Association meets all capital adequacy requirements to which it is subject.

As of September 30, 2002, the most recent notification from the OTS categorized the Association as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Association's category. To be categorized as well capitalized the Association must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 (core) ratios as set forth in the table below.

	Actual		Minimum capital requirement		Minimum to be well capitalized under prompt corrective action provisions
	Amount	Ratio	Amount	Ratio	Amount	Ratio
	(Dollars in thousands)
As of September 30, 2002
Total capital to risk-weighted assets	$15,058	18.01%	$6,689	8.0%	$8,362	10.0%
Tier 1 capital to risk-weighted assets	14,230	17.02	N/A	N/A	4,385	6.0
Core capital to adjusted tangible assets	14,230	9.12	6,239	4.0	7,799	5.0
Tangible capital to tangible assets	14,230	9.12	2,340	1.5	N/A	N/A
As of September 30, 2001
Total capital to risk-weighted assets	$14,850	19.36%	$6,136	8.0%	$7,670	10.0%
Tier 1 capital to risk-weighted assets	14,127	18.42	N/A	N/A	4,602	6.0
Core capital to adjusted tangible assets	14,127	9.25	6,111	4.0	7,638	5.0
Tangible capital to tangible assets	14,127	9.25	2,291	1.5	N/A	N/A

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE M - STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL - Continued

Regulations of the OTS impose limitations on the payment of dividends and other capital distributions by savings associations. Under such regulations a savings association that immediately prior to and on a pro forma basis, after giving effect to a proposed capital distribution, has total capital (as defined by OTS regulation) that is equal to or greater than the amount of its fully phased-in capital requirement is generally permitted without OTS approval (but subsequent to 30 days prior notice to the OTS of the planned dividend) to make capital distributions during a calendar year in the amount of up to the greater of (1) 100% of its net earnings to date during the year plus an amount equal to one-half of the amount by which its total capital to assets ratio exceeded its fully phased-in capital to assets ratio at the beginning of the year or (2) 75% of its net income for the most recent four quarters. Pursuant to such OTS dividend regulations, the Association had the ability to pay dividends of approximately $4,100,000 to First Independence Corporation at September 30, 2002.

NOTE N - COMMITMENTS

The Association is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers including commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of the commitments reflect the extent of the Association's involvement in such financial instruments.

The Association's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Association uses the same credit policies in making commitments and conditional obligations as those utilized for on-balance sheet instruments. The Association's commitments to extend credit at September 30, 2002 include loans in process as disclosed in Note E, first mortgage loans with fixed rates ranging from 6.25% to 9.00% aggregating $1,889,520 and unfunded lines of credit aggregating $749,753. 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. The commitments may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. Collateral for loans in process and commitments are the same as for other Association loans. The commitment period is generally for forty-five days.

The Association has committed to construction of a branch facility with an estimated cost of $850,000.

NOTE O - FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instruments at September 30, 2002 and 2001.

Cash and cash equivalents: The balance sheet carrying amounts for cash and short-term instruments approximate the estimated fair values of such assets.

Investment securities and mortgage-backed securities: Fair values for investment securities and mortgage-backed securities are based on quoted market prices, if available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans receivable: For variable rate loans that reprice frequently and which entail no significant change in credit risk, fair values are based on the carrying values. The estimated fair values of fixed rate loans are estimated based on discounted cash flow analyses using prepayment assumptions and interest rates currently offered for loans with similar terms to borrowers of similar credit quality. Nonperforming loans have not been discounted. The carrying amount of accrued interest receivable approximates its fair value.

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First Independence Corporation and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 2002 and 2001

NOTE O - FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued

Commitments to extend credit: No premium or discount was ascribed to loan commitments because when funded virtually all funding will be at current market rates.

Federal Home Loan Bank stock: The balance sheet carrying amount approximates the stock's fair value.

Deposit liabilities: The fair values estimated for demand deposits, NOW accounts, savings and certain types of money market accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values of fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered to a schedule of aggregated expected monthly time deposit maturities. The carrying amount of accrued interest payable approximates its fair value.

Advances from Federal Home Loan Bank: For variable rate advances fair values are considered equal to their carrying values. The estimated fair value of fixed rate advances are estimated based on discounted cash flow analysis using interest rates currently offered for advances with similar terms.

The following table provides summary information on the fair value of financial instruments. Such information does not purport to represent the aggregate net fair value of the Corporation. Further, the fair value estimates are based on various assumptions, methodologies and subjective considerations, which vary widely among different financial institutions and which are subject to change. The carrying amounts are the amounts at which the financial instruments are reported in the consolidated financial statements.

	2002
	Carrying	Estimated
	amount of	fair value
	assets and	of assets and
	(liabilities)	(liabilities)
Cash and cash equivalents	$12,335,569	$12,335,569
Investment securities held to maturity	10,320,618	10,548,221
Mortgage-backed securities held to maturity	9,488,370	9,578,350
Loans	119,406,783	123,345,375
Federal Home Loan Bank stock	1,996,800	1,996,800
Deposits	(108,221,461)	(108,540,825)
Advances from Federal Home Loan Bank	(32,000,000)	(36,057,000)
	2001
	Carrying	Estimated
	amount of	fair value
	assets and	of assets and
	(liabilities)	(liabilities)
Cash and cash equivalents	$2,293,227	$2,293,227
Investment securities held to maturity	4,194,513	4,238,780
Investment securities available for sale	1,013,700	1,013,700
Mortgage-backed securities held to maturity	7,280,822	7,307,557
Loans	133,560,913	133,259,869
Federal Home Loan Bank stock	2,265,000	2,265,000
Deposits	(103,569,165)	(103,732,577)
Advances from Federal Home Loan Bank	(33,000,000)	(35,298,000)

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STOCKHOLDER INFORMATION

Stock Listing Information
First Federal Savings and Loan Association of Independence (the "Association") converted from a mutual to a stock savings and loan association effective October 5, 1993, and formed First Independence Corporation (the "Company") to act as its holding company. The Company's common stock (the "Common Stock") is traded on The Nasdaq SmallCap Market under the symbol "FFSL." Stock Price Information and Dividends
As of December 2, 2002, there were approximately 187 shareholders of record of the Company's Common Stock, not including those shares held in nominee or street name through various brokerage firms or banks. The following table sets forth the high and low bid prices of the Common Stock and dividends declared for each fiscal quarter since October 1, 2000. The stock price information was provided by the NASD, Inc.                                                                                                 Dividends
Quarter Ended                           High                   Low                   Declared 

December 31, 2000                  10.563                 10.000                   0.1000
March 31, 2001                       13.000                 10.375                   0.1125
June 30, 2001                         13.250                 12.750                   0.1125
September 30, 2001                 13.500                 12.500                   0.1125

December 31, 2001                  14.250                 12.520                   0.1125
March 31, 2002                       15.150                 13.810                   0.1250
June 30, 2002                         16.700                 15.050                   0.1250
September 30, 2002                 16.400                 15.400                   0.1250 The Company has paid a cash dividend on its Common Stock for each quarter since the Association's conversion to stock form. Future dividends, if any, will be dependent upon the results of operations and financial condition of the Company, tax considerations, industry standards, economic conditions, general business practices and other factors. The Company's ability to pay dividends is dependent on the dividend payments it receives from the Association, which are subject to regulations and the Association's continued compliance with all regulatory capital requirements. See Note M of the Notes to Consolidated Financial Statements for a discussion of regulations governing the Association's ability to pay dividends. Annual Report on Form 10-KSB and Investor Information
A copy of the Company's annual report on Form 10-KSB, filed with the Securities and Exchange Commission, is available without charge by writing to:    Gary L. Overfield
   Senior Vice President and Secretary
   First Independence Corporation
   Myrtle and Sixth
   Independence, Kansas 67301 Stock Transfer Agent
Inquiries regarding stock transfer, registration, lost certificates or changes in name and address should be directed to the stock transfer agent and registrar by writing to:    Registrar and Transfer Company
   10 Commerce Drive
   Cranford, New Jersey 07016
   (800) 368-5948 Investor Information
Stockholders, investors, and analysts interested in additional information may contact:    James B. Mitchell,
   Vice President and Chief Financial Officer
   E-Mail: jimm@firstfederalsl.com Corporate Office
First Independence Corporation
Myrtle and Sixth
Independence, Kansas 67301
(620) 331-1660 Special Counsel
Silver, Freedman & Taff, L.L.P.
1700 Wisconsin Avenue, NW
Washington, DC 20007 Independent Auditor
Grant Thornton, LLP
8300 Thorn Drive, Suite 300
Wichita, Kansas 67226 First Federal Savings and Loan Association of Independence
Myrtle and Sixth
Independence, Kansas 67301
(620) 331-1660

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DIRECTORS AND MANAGEMENT GROUP

BOARD OF DIRECTORS
(First Independence Corporation and
First Federal Savings and Loan Association of Independence) Lavern W. Strecker
Chairman of the Board
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence
Retired - Former Manager of Accounting and Control    ARCO Pipe Line Company William T. Newkirk II
Vice Chairman of the Board
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence
Vice President
   Newkirk, Dennis & Buckles Insurance Co. Larry G. Spencer
President and Chief Executive Officer
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence Robert A. Johnson
Human Resource Manager
   Cobalt Boats Harold L. Swearingen
Retired - Former Telecommunications Manager
   ARCO Pipe Line Company Joseph M. Smith
Retired - Former County Extension Agent
Agriculture and Coordinator
   Montgomery County Extension Council E. JoVonnah Boecker
City Clerk
   Neodesha, Kansas EXECUTIVE OFFICERS Lavern W. Strecker
Chairman of the Board
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence
Retired - Former Manager of Accounting and Control
   ARCO Pipe Line Company William T. Newkirk II
Vice Chairman of the Board
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence
Vice President
   Newkirk, Dennis & Buckles Insurance Co. Larry G. Spencer
President and Chief Executive Officer
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence Gary L. Overfield
Senior Vice President and Secretary
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence James B. Mitchell
Vice President and Chief Financial Officer
   First Independence Corporation and
   First Federal Savings and Loan Association of
    Independence Jim L. Clubine
Vice President and Asset Manager
   First Federal Savings and Loan Association of
   Independence OTHER OFFICERS Lori L. Kelley
Vice President of Retail Banking
   First Federal Savings and Loan Association of
    Independence C. Alan Hoggatt
Vice President
   First Federal Savings and Loan Association of
    Independence Dennis L. Greenhaw
Vice President
   First Federal Savings and Loan Association of
    Independence Phyllis A. Johnson
Assistant Vice President
   First Federal Savings and Loan Association of
    Independence Vicki L. Cranor
Assistant Vice President
   First Federal Savings and Loan Association of
    Independence

40END