EX-13

EXHIBIT 13

2000 Annual Report to Stockholders

TABLE OF CONTENTS

Consolidated Financial Statements:

	Page
Letter to Stockholders	1
Business of the Company and the Bank	2
Common Stock	2
Selected Consolidated Financial Condition,Operating and Other Data	3-4
Management's Discussion and Analysis of Financial Condition              and Results of Operations	5-15
Independent Auditors' Report	16
Consolidated Statements of Financial Condition as of June 30, 2000 and 1999	17
Consolidated Statements of Income for the years ended June 30, 2000,             1999 and 1998	18
Consolidated Statements of Stockholders' Equityfor the years ended June 30,              2000, 1999 and 1998	19
Consolidated Statements of Cash Flows for the years ended June 30, 2000,              1999 and 1998	20-21
Notes to Consolidated Financial Statements	22-42
Directors and Officers	43
Corporate Information	44

September 1, 2000

To Our Fellow Stockholders:

On behalf of the Board of Directors, Management, and Staff of Southern Missouri Bancorp, Inc. and its wholly owned subsidiary, Southern Missouri Bank and Trust, we are pleased to present the results of the Company's performance for the year ended June 30, 2000 and discuss some of our strategic plans and initiatives for a prosperous and exciting year ahead.

During the past year, our company has continued on its path of change. Initiatives have been enacted which we believe will generate long-term shareholder value. We invested in ourselves as we upgraded our operating infrastructure to handle growth as well as a rapidly changing world. Initiatives undertaken included the centralization of loan processing and administration, the employment of several seasoned commercial loan officers, evaluations of the profitability of our branch network, which resulted in the announced sale of two under performing branches in Malden and Ellington, Missouri, and the conversion to a new data processing system. Our Company understands the need to prudently invest in technology to improve the efficiency and delivery of our products and services as we continue to evolve as a society into a new technological era. As a company, we will strive to provide financial services to meet our customers needs including internet banking, brokerage services and PC banking.

Financially, fiscal 2000 was a challenging year for Southern Missouri as interest rates increased substantially, resources were deployed for our data conversion, our pending branch acquisition and the now forgotten "Y2K bug". Despite these challenges, our earnings per share totaled $1.03 per share, as compared to the core results of $0.96 for the prior fiscal year.

Southern Missouri Bancorp had total assets of $184.4 million at June 30, 2000 which reflects growth of $19.4 million since the end of our last fiscal year. The 11.8% increase was consistent with our strategic plan for asset growth, since it was comprised almost entirely of growth in the loan portfolio. We believe our current "team" and product lines will allow us the opportunity to continue on this path of growth, which in turn will allow us to continue to leverage our capital base and increase our financial returns. For the year ended June 30, 2000, we earned a return on average equity of 5.98% and a return on average assets of .77%, both of which need improvement.

As we turn our attention toward the future, we intend to focus on successfully integrating our purchase of two full service branches in Kennett and Qulin, Missouri, continuing to generate asset growth through loan originations, expanding our market presence through strategic acquisitions, attracting new deposits in our local markets and prudently managing our stockholders' equity. It is our pledge to remain committed to the growth and performance goals of the Company and to generate value and opportunity for the main groups that hold the keys to our success: our customers, our staff, our shareholders, and our communities.

Thank you for your investment in Southern Missouri Bancorp, and for the confidence you have placed in our team here at Southern Missouri as we continue to implement change. Change, which we believe, will bring about one of the more important goals - a higher stock price and an improvement in our return on stockholders' equity. We look forward to a prosperous and bright future together.

Thadis R. Seifert	Greg A. Steffens
Chairman and President	Chief Financial Officer
Southern Missouri Bancorp, Inc.	Southern Missouri Bancorp, Inc.

1

BUSINESS OF THE COMPANY AND THE BANK

Southern Missouri Bancorp, Inc. (Southern Missouri or Company) is a Missouri Corporation and owns all outstanding stock of Southern Missouri Bank and Trust Co. (SMBT or the Bank). The Company's earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank.

The Bank was originally chartered by the State of Missouri in 1887 and converted from a state-chartered stock savings and loan association to a Federally-chartered stock savings bank effective June 20, 1995. Then, effective February 17, 1998, the Bank converted its charter to a state-chartered stock savings bank. The Bank's deposit accounts are insured up to a maximum of $100,000 by the Savings Association Insurance Fund (SAIF), which is administered by the Federal Deposit Insurance Corporation (FDIC).

The Bank's primary business is the origination of mortgage loans secured by one- to four-family residences. The Bank currently conducts its business through its home office located in Poplar Bluff and seven full service branch facilities in Poplar Bluff, Van Buren, Dexter, Malden, Kennett, Doniphan, and Ellington, Missouri. Also, the Bank has entered into an agreement to purchase two full service banking facilities in Kennett and Qulin, Missouri. In addition, the Bank has entered into an agreement to sell the full service banking facilities in Malden and Ellington, Missouri. Both of these transactions are expected to close in the first quarter of the next fiscal year. Lending activities are funded through the attraction of deposit accounts, consisting of certificate accounts with terms of 60 months or less, passbook accounts and money-market deposit accounts and advances from the Federal Home Loan Bank of Des Moines. The Bank also originates mortgage loans on commercial real estate, construction loans on single-family residences and commercial properties, consumer loans, and loans secured by deposit accounts.

COMMON STOCK

The common stock of the Company is listed on the Nasdaq Stock Market under the symbol "SMBC".

The following table sets forth per share market price and dividend information for the Company's common stock. As of August 1, 2000, there were approximately 350 stockholders of record. This does not reflect the number of persons or entities who hold stock in nominee or "street name."

Fiscal 2000	High	Low	Dividend Paid
First Quarter	$14.25	$12.00	$.125
Second Quarter	13.625	10.875	.125
Third Quarter	13.125	10.875	.125
Fourth Quarter	13.125	10.594	.125
Fiscal 1999	High	Low	Dividend Paid
First Quarter	$ 21.875	$15.75	$.125
Second Quarter	17.50	14.50	.125
Third Quarter	15.25	11.875	.125
Fourth Quarter	14.625	13.00	.125

Any future dividend declarations and payments are subject to the discretion of the Board of Directors of the Company. The ability of the Company to pay dividends depends primarily on the ability of the Bank to pay dividends to the Company. For a discussion of the restrictions on the Bank's ability to pay dividends, see Note 12 of Notes to Consolidated Financial Statements included elsewhere in this report.


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SELECTED CONSOLIDATED FINANCIAL CONDITION, OPERATING AND OTHER DATA

	At June 30,
	(In thousands)
FINANCIAL CONDITION DATA:	2000	1999	1998	1997	1996
Total assets	$184,391	$164,972	$155,947	$160,393	$159,848
Loans receivable, net	138,425	118,249	119,083	107,783	95,535
Mortgage-backed securities	12,956	16,900	14,154	26,236	35,037
Cash, interest-bearing deposits and investment securities	26,425	25,048	18,324	21,638	24,459
Deposits	123,920	120,155	109,410	118,705	120,138
Borrowings	37,000	20,550	21,069	13,535	11,550
Stockholders' equity	21,457	22,629	24,112	26,400	26,227

	Year Ending June 30,
	(In thousands)
OPERATING DATA:	2000	1999	1998	1997	1996
Interest income	$12,290	$11,414	$11,444	$11,408	$11,010
Interest expense	6,919	6,247	6,212	6,318	6,308
Net interest income	5,371	5,167	5,232	5,090	4,702
Provision for loan losses	215	235	783	241	60
Net interest income after        provision for loan losses	5,156	4,932	4,449	4,849	4,642
Noninterest income	568	1,255	797	618	639
Noninterest expense	3,714	3,682	3,660	3,972	3,161
Income before income taxes	2,010	2,505	1,586	1,495	2,120
Income tax expense	690	860	522	440	653
Net income	1,320 =========	$  1,645 =========	$  1,064 =========	$  1,055 =========	$  1,467 =========
Basic earnings per common share	$ 1.03	1.23	.69	.68	.89
Diluted earnings per common        share	1.02	1.20	.67	.67	.87
Dividends per share	.50	.50	.50	.50	.50

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	At June 30,
	(In thousands)
OTHER DATA:	2000	1999	1998	1997	1996
Number of:
Real estate loans	2,811	2,920	3,035	3,040	3,053
Deposit accounts	12,887	13,189	12,762	12,542	12,626
Full service offices	8	8	8	8	8

KEY OPERATING RATIOS:	At or For the Year Ended June 30,
	(In thousands)
	2000	1999	1998	1997	1996
Return on assets (net income divided by    average assets)	.77%	1.02%	.67%	.65%	.93%
Return on average equity (net income    divided by average equity)	5.98	7.30	4.06	4.09	5.48
Average equity to average assets	12.84	14.01	16.40	16.01	17.05
Interest rate spread (spread between   weighted average rate on all interest-   earning assets and all interest-   bearing liabilities)	2.69	2.76	2.67	2.51	2.29
Net interest margin (net interest   income as a percentage of average   interest-earning assets)	3.22	3.32	3.39	3.25	3.09
Noninterest expense to average    assets	2.16	2.29	2.29	2.46	2.01
Average interest-earning assets to   interest-bearing liabilities	112.78	114.15	117.76	118.32	119.42
Allowance for loan losses to total   loans at end of period	.91	.99	1.07	.64	.63
Allowance for loan losses to   nonperforming loans	237.79	658.09	243.01	51.19	114.94
Net charge offs to average out-   standing loans during the period	.10	.29	.17	.16	.01
Ratio of nonperforming assets   to total assets	.59	.64	.98	.89	.38
Dividend payout ratio	48.53	39.95	72.29	73.06	52.17

4

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

Southern Missouri Bancorp, Inc. is a Missouri corporation originally organized for the principal purpose of becoming the holding company of Southern Missouri Savings Bank. The Bank converted from a Federally-chartered stock savings bank to a state-chartered stock savings bank effective February 17, 1998 and subsequently changed its name to Southern Missouri Bank and Trust Co. The Company's state of incorporation changed from Delaware to Missouri effective April 1, 1999. The principal business of SMBT consists primarily of attracting deposits from the general public and using such deposits along with wholesale funding from the Federal Home Loan Bank of Des Moines (FHLB) to finance mortgage loans secured by one-to four-family residences and, to a lesser extent, consumer loans, commercial real estate loans, and commercial business loans. These funds have also been used to purchase investment securities, mortgage-backed securities (MBS), U.S. government and federal agency obligations and other permissible securities.

The revenues of Southern Missouri are derived principally from interest earned on loans and, to a lesser extent, from interest earned on investment securities and MBS. Southern Missouri's operations are significantly influenced by general economic conditions including monetary and fiscal policies of the U.S. government and Federal Reserve. Additionally, Southern Missouri is subject to policies and regulations issued by financial institution regulatory agencies, including the Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS) and the Missouri Division of Finance. Each of these factors may influence interest rates, loan demand, prepayment rates and deposit flows. Interest rates available on competing investments as well as general market interest rates influence the Bank's cost of funds. Lending activities are affected by the demand for financing real estate and other types of loans, which in turn is affected by the interest rates at which such financing may be offered. The Bank intends to continue to focus on its lending programs for one-to four-family residential real estate, commercial mortgage, business and consumer financing on loans secured by properties or collateral located in Southeastern Missouri.

FORWARD-LOOKING STATEMENTS

Except for the historical information contained herein, the matters discussed in the annual report may be deemed to be forward-looking statements, which we believe are within the meaning of the Private Securities Litigation Reform Act of 1995. These matters involve risks and uncertainties, including changes in economic conditions in Southern Missouri's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in Southern Missouri's market area and price competition for loans and deposits. Actual strategies and results in future periods may differ materially from those currently expected. These forward-looking statements represent Southern Missouri's judgment as of the date of this report. Southern Missouri disclaims, however, any intent or obligation to update these forward-looking statements.

FINANCIAL CONDITION

Southern Missouri's total assets increased $19.4 million, or 11.8%, to $184.4 million at June 30, 2000, as compared to $165.0 million at June 30, 1999. The increase was largely due to $20.2 million, or 17.1% growth in loans receivable. The increase exceeded the Company's growth targets and was comprised principally of $7.5 million in one- to four-family real estate, $2.2 million in construction loans and $10.1 million in commercial and commercial real estate loans. Loan growth was primarily attributed to changes in the staffing of the loan department with the addition of three new commercial loan officers during the year. These changes helped lead to increased loan production, as loan originations totaled $57.4 million during fiscal 2000 as compared to $50.5 million over the same period of the prior year. The loan growth was primarily funded by increased FHLB advances of $16.4 million, or 80.0%, to $37.0 million at June 30, 2000, from $20.6 million at June 30, 1999, and deposit growth of $3.8 million or 3.1%, to $123.9 million from $120.1 million.

Allowance for loan losses increased $86,000, or 7.2%, from $1.2 million at June 30, 1999 to $1.3 million at June 30, 2000. The allowance for loan losses at June 30, 2000 represented 0.9% and 42.0% of loans receivable and loans past due 90 days or more, respectively, as compared to respective balances of 1.0% and 33.2% at June 30, 1999 (see Provision for Loan Losses).




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Premises and equipment increased primarily due to the purchase of land to build two new full service facilities and extensive upgrades performed on the Bank's data processing system.

FHLB advances increased $16.4 million, or 80.0%, from $20.6 million at June 30, 1999 to $37.0 million at June 30, 2000. The outstanding advances have fixed or variable interest rates and may be subject to early redemption from the issuer. The advances have primarily been used to finance growth in loans receivable and at June 30, 2000 maintained an average cost which was 130 basis points higher than the Bank's overall cost of deposits.

The Company's stockholders' equity declined from $22.6 million at June 30, 1999 to $21.5 million at June 30, 2000. The decline was primarily due to the Company's stock repurchase plan which contributed to the $1.5 million increase in treasury stock, net of stock options exercised, $641,000 in cash dividends on common stock and mark-to-market adjustments on the investment portfolio of $379,000. The decline was partially offset by the Company's $1.3 million in net income.

Southern Missouri's assets and liabilities are expected to undergo significant change over the upcoming quarter as the acquisition of two full service banking facilities with total deposits and loans of approximately $50.0 million and $27.8 million, respectively, should be completed. In addition, Southern Missouri anticipates completing the sale of two full service banking facilities with total deposits and loans of $14.8 million and $9.5 million, respectively, during this same quarter. Finally, as stated earlier, Southern Missouri is in the process of building two additional full service facilities. Both of these facilities should be completed in the third quarter of the fiscal year. The new locations will be located in Poplar Bluff and Doniphan.

RESULTS OF OPERATIONS

Southern Missouri's results of operations are primarily dependent on the level of its net interest income, noninterest income, and the control of operating expenses. Net interest income is dependent primarily on the difference or spread between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, as well as the relative amounts of such assets and liabilities. Southern Missouri, like other financial institutions, is also subject to interest rate risk to the degree that its interest-earning assets mature or reprice at different times, or on a varying basis, from its interest-bearing liabilities.

Southern Missouri's noninterest income consists primarily of fees charged on transaction and loan accounts. Southern Missouri's operating expenses include, among other costs, employee compensation and benefits, occupancy expenses, legal and professional fees, federal deposit insurance premiums and other general and administrative expenses.

COMPARISON OF THE YEARS ENDED JUNE 30, 2000 AND 1999

Net Income. Southern Missouri's net income totaled $1.3 million, which approximated the results of the prior year, exclusive of a $526,000 pre-tax gain realized on the sale of the Bank's insurance operations during fiscal 1999.

Net Interest Income. Net interest income increased by $204,000, or 4.0%, to $5.4 million for fiscal 2000 when compared to the prior fiscal year. The increase was primarily due to the $11.2 million increase in the average balance of interest earning assets, which was largely offset by a $11.6 million increase in the average balance of interest bearing liabilities as well as a 7 basis point decline in the average interest rate spread between these assets and liabilities. The decline in average interest rate spread was primarily due to an increased ratio of short-term interest bearing liabilities to interest earning assets as well as the lagging nature of the repricing of the Bank's cost of funds loan portfolio versus its cost of deposits.

Interest Income. Interest income increased $876,000, or 7.7%, to $12.3 million for fiscal 2000 as compared to the prior fiscal year. The increase was primarily due to an $11.2 million increase in the average balance of interest earning assets and a 3 basis point increase in the average yield on these assets.



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Interest income on loans receivable increased $607,000, or 6.5%, to $9.9 million for fiscal 2000 as compared to $9.3 million for the prior fiscal year. The increase was primarily due to a $9.6 million increase in average loans receivable, partially offset by a 12 basis point decline in the average yield on these loans. Interest income on the investment and mortgage-backed security portfolio increased $382,000, or 19.7%, to $2.3 million for fiscal 2000 as compared to $1.9 million for the prior fiscal year. The increase was primarily due to a $4.0 million increase in average investments and a 41 basis point increase in the average yield on these investments. Other interest income decreased $114,000 in fiscal 2000 as compared to fiscal 1999 due to lower average balances and yields earned on these assets.

Interest Expense. Interest expense increased $672,000, or 10.8%, to $6.9 million for fiscal 2000 as compared to the prior fiscal year. The increase was primarily due to an $11.6 million increase in the average balance of interest-bearing liabilities and a 10 basis point increase in the average rate paid on these liabilities, to 4.68% during fiscal 2000 from 4.58% during fiscal 1999.

Provision for Loan Losses. Provisions for loan losses are charged to earnings to bring the total allowance for loan losses to a level considered adequate by management to provide for loan losses based on prior loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral and current economic conditions. Management also considers other factors relating to the collectibility of the Bank's loan portfolio.

Provision for loan losses decreased $20,000 to $215,000 for the year ended June 30, 2000 as compared to $235,000 for the year ended June 30, 1999. The decline was primarily due to a reduction in classified assets from $5.1 million at June 30, 1999 to $4.0 million at June 30, 2000. The largest classified commercial real estate relationship as of June 30, 2000 totaled $2.6 million and was current at that date and performing in accordance with its terms.

The above provisions were made based on management's analysis of the various factors which affect the loan portfolio and management's desire to maintain the allowance at a level considered adequate. Management performed a detailed analysis of the Bank's loan portfolio, including types of loans, the Bank's historical charge-off history and an analysis of the Bank's allowance for loan losses. Management also considered the Bank's continued origination of loans secured by commercial real estate. Such loans bear an inherently higher level of credit risk than one-to four-family residential real estate loans. While management believes the allowance for losses at June 30, 2000 is adequate to cover all losses inherent in the Bank's portfolio, there can be no assurance that, in the future, the Bank's regulators will not require further increases in the allowance or actual losses will not exceed the allowance.

Noninterest Income. Noninterest income declined $687,000, or 54.8%, to $568,000 for fiscal 2000 as compared to the $1.3 million earned during fiscal 1999. The decline was primarily due to a $526,000 one-time gain realized during fiscal 1999 from the sale of the Bank's insurance operations which resulted in a $292,000 reduction in insurance commissions, partially offset by a $107,000 increase in banking service charges.

Noninterest Expense. Noninterest expense increased $31,000, or 0.9% to $3.7 million for fiscal 2000 as compared to the prior fiscal year. The change was primarily due to higher occupancy expense of $73,000, professional fees of $40,000 and postage and office supplies of $23,000, partially offset by reductions in compensation expense of $31,000, advertising expense of $36,000 and deposit insurance premiums of $37,000.

The reduction in compensation and benefits was primarily due to the sale of the Bank's insurance operations in the fourth quarter of fiscal 1999 partially offset by hiring additional personnel in the loan department during this fiscal year. Occupancy and equipment expense increased due to higher depreciation and maintenance. SAIF deposit insurance premiums decreased as a result of a full year benefit of the Bank's supervisory risk classification being upgraded during fiscal 1999. Professional fees increased primarily due to outside data processing consulting and legal fees.

Provision for Income Taxes. Provision for income taxes declined $170,000 to $690,000 for fiscal 2000 as compared to $860,000 for the prior fiscal year. The decrease was due to a reduction in pre-tax income.



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COMPARISON OF THE YEARS ENDED JUNE 30, 1999 AND 1998

Net Income. Southern Missouri's net income increased $580,000, or 54.5%, from $1.1 million for the year ended June 30, 1998 to $1.6 million for the year ended June 30, 1999. Fiscal 1999's results included a $526,000 pre-tax gain realized on the sale of the Bank's subsidiary's insurance operation. Exclusive of the sale, net income for fiscal 1999 would have approximated $1.3 million, which would have exceeded fiscal 1998's net income by $250,000, or 23.4%. The improvement was primarily due to reduced provisions for loan losses, partially offset by increased noninterest expense and a slight decline in net interest income.

Net Interest Income. Net interest income, before provision for loan losses, declined by $65,000, or 1.3%, to $5.2 million for the year ended June 30, 1999 as compared to the year ended June 30, 1998. The decline was primarily due to the ratio of average interest-earning assets to interest-bearing liabilities declining to 114.2% during fiscal 1999 as compared to 117.8% during fiscal 1998, which was primarily due to the Company's stock repurchase program. This was partially offset by a .09% increase in the average interest rate spread.

Interest Income. Interest income declined $29,000, or .3%, to $11.4 million for the year ended June 30, 1999 as compared to the year ended June 30, 1998. The decline was primarily due to a .06% decline in the average yield earned on interest-earning assets, which was partly offset by a $1.0 million, or 0.7%, increase in average interest-earning assets.

Interest income on loans receivable increased $111,000, or 1.2%, to $9.3 million for the year ended June 30, 1999 as compared to $9.2 million for the year ended June 30, 1998. The increase was due to a $1.5 million increase in average loans receivable and stable portfolio yields during fiscal 1999. Interest income on the investment and mortgage-backed security portfolio declined $179,000, or 8.4%, to $1.9 million for the year ended June 30, 1999 as compared to $2.1 million for the year ended June 30, 1998. The decline was due to prepayments on higher yielding MBS and the early redemption of higher yielding callable bonds resulting in lower average balances and lower average yields for fiscal 1999 as compared to fiscal 1998. Other interest income increased $38,000 in fiscal 1999 as compared to 1998 primarily due to higher average balances outstanding.

Interest Expense. Interest expense increased $36,000, or 0.6%, to $6.2 million for the year ended June 30, 1999 as compared to the year ended June 30, 1998. The increase was primarily due to the average balance of interest-bearing liabilities increasing $5.0 million, or 3.8%, which was partly offset by the .15% decline in the average rate paid on these same interest-bearing liabilities, to 4.58% during fiscal 1999 from 4.73% during fiscal 1998.

Provision for Loan Losses. For the year ended June 30, 1999, the Bank established a provision for loan losses of $235,000 compared with $783,000 for the year ended June 30, 1998. Substandard assets identified under the Bank's internal classified assets policy decreased from $5.6 million as of June 30, 1998 to $5.1 million at June 30, 1999. During fiscal 1998, adversely classified assets increased significantly, primarily commercial real estate, which contributed to increased provisions in that year. The largest classified commercial real estate relationship as of June 30, 1999 totaled $2.6 million and was current at that date and performing in accordance with its terms. In addition, the Bank had two other lending relationships with balances of $382,000 and $971,000 which were secured primarily by commercial real estate that were also classified due to the related businesses experiencing cash flow difficulties.

Noninterest Income. Noninterest income increased $458,000, or 57.4%, to $1.3 million for the year ended June 30, 1999 as compared to $797,000 earned during the year ended June 30, 1998. Contributing to the increase was a $526,000 one-time gain from the sale of the Company's insurance operation. In addition, the Company experienced increased income from banking service charges, late charges, foreclosed real estate, and insurance commissions, which were partially offset by reductions in gains on the sale of securities and in other income, in which during fiscal 1998 the Company realized a $150,000 one-time gain on the termination of a defined benefit plan.





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Noninterest Expense. Noninterest expense increased $22,000, or 0.6% to $3.7 million for the year ended June 30, 1999 when compared to the year ended June 30, 1998. Compensation and benefits decreased from $2.5 million for 1998 to $2.2 million in 1999. The decrease was primarily due to a reduction in stock benefit plan expense, partially offset by salary increases. Effective July 1, 1998, the Employee Stock Ownership Plan (ESOP) loan terms were modified and principal payments were extended an additional four years, resulting in fewer shares being released. Due to less shares being released and a decline in the Company's average stock price, ESOP related expenses declined $264,000. ESOP expense will continue to fluctuate in the future based on changes in the market price of the Company's stock. Occupancy and equipment expense increased from $401,000 for 1998 to $497,000 during 1999 as a result of increased expenses for depreciation, repairs and maintenance, and data processing upgrades. SAIF deposit insurance premiums decreased from $110,000 in 1998 to $85,000 in 1999 as a result of the Bank's supervisory risk classification being upgraded. Professional fees decreased from $192,000 in 1998 to $136,000 in 1999 due to lower supervisory examination fees and legal fees. Other expenses increased $148,000 to $450,000 in 1999 from $302,000 in 1998 primarily due to increased costs associated with the Bank's fee-based checking club promotion, higher correspondent banking charges, and increased repossession expenses.

Provision for Income Taxes. Provision for income taxes increased $338,000 to $860,000 for the year ended June 30, 1999 as compared to $522,000 for the year ended June 30, 1998. The increase was primarily due to Southern Missouri's effective tax rate increasing from 32.9% for fiscal 1998 to 34.3% for fiscal 1999 and increased operating income. The increase in the effective tax rate for fiscal 1999 is primarily due to an increase in taxable state income.

ASSET/LIABILITY MANAGEMENT

The goal of Southern Missouri's asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning assets and interest-bearing liabilities in order to maximize net interest income without exposing the Bank's Net Portfolio Value (NPV) to an excessive level of interest-rate risk. The Bank has employed various strategies intended to manage the potential effect that changing interest rates have on future operating results. Historically, the primary asset/liability management strategy had been to focus on matching the repricing intervals of interest-earning assets and interest-bearing liabilities. This strategy has resulted in a manageable exposure to interest-rate risk with modest asset and loan growth rates.

The primary elements of Southern Missouri's current asset/liability strategy include (i) increasing loans receivable through the origination of both fixed and adjustable-rate residential loans, (ii) growth in loans secured by commercial real estate, which typically provide higher yields and shorter repricing periods, but tend to carry higher credit risk, (iii) expanding the consumer loan portfolio, (iv) active solicitation of less rate-sensitive deposits, (v) offering competitively priced short-term certificates of deposit, and (vi) the use of FHLB advances to help manage exposure to interest-rate risk. The degree to which each segment of the strategy is achieved will affect Southern Missouri's overall profitability and exposure to interest-rate risk.

During the last two years, Southern Missouri expanded its loan products to include fixed rate loans for residential financing based on an amortization schedule of up to 30 years. This, as well as more competitive pricing and an increase in customer preferences for fixed-rate residential financing led to fixed rate originations of $12.2 million during fiscal 2000 and $19.1 million in fiscal 1999. At June 30, 2000, fixed rate loans with remaining maturities in excess of 10 years totaled $34.1 million, or 24.7% of loans receivable.









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AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES

The following table sets forth certain information relating to the Company's average interest-earning assets and interest-bearing liabilities and reflects the average yield on assets and the average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average month-end balance of assets or liabilities, respectively, for the periods indicated. During the periods indicated, nonaccrual loans are included in the net loan category.

The table also presents information for the periods indicated with respect to the difference between the weighted-average yield earned on interest-earning assets and the weighted-average rate paid on interest-bearing liabilities, or "interest rate spread," which financial institutions have traditionally used as an indicator of profitability. Another indicator of an institution's net interest income is its "net yield on interest-earning assets," which is its net interest income divided by the average balance of interest-earning assets. Net interest income is affected by the interest rate spread and by the relative amounts of interest-earning assets and interest-bearing liabilities. When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income.





























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	Year Ended June 30,
	2000			1999			1998
	Average Balance	Interest and Dividends	Yield/   Cost	Average Balance	Interest and Dividends	Yield/   Cost	Average Balance	Interest and Dividends	Yield/   Cost
	(Dollars in thousands)
Interest-earning assets:
Mortgage loans (1)	$ 114,109	$ 8,784	7.70%	$ 106,117	$ 8,315	7.84%	$ 104,417	$ 8,172	7.83%
Other loans (1)	12,139	1,109	9.14	10,510	971	9.24	10,691	1,003	9.38
Total net loans	126,248	9,893	7.84	116,627	9,286	7.96	115,108	9,175	7.97
Mortgage-backed securities	14,180	867	6.11	17,074	973	5.70	19,344	1,172	6.06
Investment securities (2)	23,546	1,455	6.18	16,693	967	5.79	16,078	947	5.89
Other interest-earning assets	2,869	75	2.61	5,200	188	3.62	4,049	150	3.70
Total interest-earning       assets (1)	166,843	12,290	7.37	155,594	11,414	7.34	154,579	11,444	7.40
Other noninterest-earning assets	5,158	-		5,292	-		5,405	-
Total assets	$ 172,001 =======	$ 12,290 ======		$ 160,886 =======	$ 11,414 ======		$ 159,984 =======	$11,444 ======
Interest-bearing liabilities:
Passbook accounts	$     6,920	$      175	2.53	$     7,190	$      182	2.53	$     7,487	$      202	2.70
NOW accounts	12,266	240	1.96	10,672	210	1.97	9,605	186	1.94
Money market accounts	15,703	606	3.86	11,265	414	3.68	7,856	241	3.07
Certificates of deposit	86,346	4,402	5.10	87,189	4,457	5.11	86,705	4,522	5.21
Total deposits	121,235	5,423	4.47	116,316	5,263	4.52	111,653	5,151	4.61
FHLB advances	26,705	1,496	5.60	19,990	984	4.92	19,617	1,061	5.41
Total interest-bearing liabilities	147,940	6,919	4.68	136,306	6,247	4.58	131,270	6,212	4.73
Other liabilities	1,973	-		2,045	-		2,483	-
Total liabilities	149,913	6,919		138,351	6,247		133,753	6,212
Stockholders' equity	22,088	-		22,535	-		26,231	-
Total liabilities and
stockholders' equity	$ 172,001 =======	$ 6,919 ======		$ 160,886 =======	$ 6,247 ======		$ 159,984 =======	$ 6,212 ======
Net interest income	-	$ 5,371	-	-	$ 5,167	-	-	$ 5,232	-
Interest rate spread (3)	-	-	2.69%	-	-	2.76%	-	-	2.67%
Net interest margin (4)	-	-	3.22%	-	-	3.32%	-	-	3.39%
Ratio of average        interest-earning        assets to average        interest-bearing       liabilities	112.78%	-	-	114.15%	-	-	117.76%	-	-

(1)   Calculated net of deferred loan fees, loan discounts and loans-in-process.
(2)   Includes FHLB stock and related cash dividends.
(3)   Net interest spread represents the difference between the average rate on interest-earning assets and the average cost
        of interest-bearing liabilities.
(4)   Net yield on average interest-earning assets represents net interest income divided by average interest-earning assets.

11

YIELDS EARNED AND RATES PAID

The following table sets forth for the periods and at the dates indicated, the weighted average yields earned on the Company's assets, the weighted average interest rates paid on the Company's liabilities, together with the net yield on interest-earning assets.

		At
	June 30,	Year Ended June 30,
	2000	2000	1999	1998
Weighted-average yield on loan portfolio	7.97%	7.84%	7.96%	7.97%
Weighted-average yield on mortgage-backed securities	6.23	6.11	5.70	6.06
Weighted-average yield on investment securities (1)	6.57	6.18	5.79	5.89
Weighted-average yield on other interest-earning assets	5.55	2.61	3.62	3.70
Weighted-average yield on all interest-earning assets	7.63	7.37	7.34	7.40
Weighted-average rate paid on deposits	4.79	4.47	4.52	4.61
Weighted-average rate paid on FHLB advances	6.09	5.60	4.92	5.41
Weighted-average rate paid on all interest-bearing liabilities	5.09	4.68	4.58	4.73
Interest rate spread (spread between weighted average rate    on all interest-earning assets and all interest-bearing liabilities)	2.54	2.69	2.76	2.67
Net interest margin (net interest income as a percentage    of average interest-earning assets)	N/A	3.22	3.32	3.39

___________________
(1)       Includes Federal Home Loan Bank stock.




12

RATE/VOLUME ANALYSIS

The following table sets forth the effects of changing rates and volumes on net interest income of the Bank. Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate); (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) changes in rate/volume (change in rate multiplied by change in volume).

	Years Ended June 30, 2000 Compared to 1999 Increase (Decrease) Due to				Years Ended June 30, 1999 Compared to 1998 Increase (Decrease) Due to
	Rate	Rate/ Volume	Volume	Net	Rate	Rate/ Volume	Volume	Net
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)	$(140)	$  759	$  (12)	$  607	$  (12)	$  123	$      0	$  111
Mortgage-backed securities	70	(164)	(12)	(106)	(70)	(138)	9	(199)
Investment securities	65	396	27	488	(16)	36	1	21
Other interest-earning deposits	(54)	(84)	24	(114)	(3)	42	(1)	38
Total net change in income        on interest-earning assets	(59)	907	27	875	(101)	63	9	(29)
Interest-bearing liabilities:
Deposits	9	142	8	159	(50)	143	20	113
FHLB advances	136	330	46	512	(96)	21	(2)	(77)
Total net change in expense       on interest-bearing liabilities	145	472	54	671	(146)	164	18	36
Net change in net interest income	$(204) =======	$ 435  =======	$ (27) =======	$ 204   =======	$ 45  =======	$(101) =======	$(9) =======	$ (65) =======

__________________
(1)       Does not include interest on loans placed on nonaccrual status.



13

INTEREST RATE SENSITIVITY ANALYSIS

The following table sets forth as of June 30, 2000, management's estimates of the projected changes in net portfolio value and net interest income in the event of 1%, 2%, 3%, and 4% instantaneous, permanent increases or decreases in market interest rates.

	Net Portfolio			NPV as % of PV of Assets
Changein Rates	$ Amount	$ Change	% Change	NPV Ratio	Change
	(Dollars in thousands)
+400 bp	$ 7,283	$(12,502)	(63)%	4.29%	-655 bp
+300 bp	10,945	(8,840)	(45)	6.30	-454 bp
+200 bp	13,945	(5,840)	(30)	7.88	-296 bp
+100 bp	16,661	(3,124)	(16)	9.26	-158 bp
0 bp	19,785	-	-	10.84	-
-100 bp	21,295	1,510	8	11.53	69 bp
-200 bp	21,801	2,016	10	11.71	87 bp
-300 bp	22,089	2,303	12	11.80	96 bp
-400 bp	22,271	2,486	13	11.83	99 bp

Computations in the table are based on prospective effects of hypothetical changes in interest rates and are based on an internally generated model using the actual maturity and repricing schedules for SMBT's loans and deposits, adjusted by management's assumptions for prepayment rates and deposit runoff. Further, the computations do not consider any reactions that the Bank may undertake in response to changes in interest rates. These projected changes should not be relied upon as indicative of actual results in any of the aforementioned interest rate changes.

The Bank's exposure to interest rate risk has increased over the past year. The increase was partly due to the Bank's increased use of short-term borrowings from the FHLB and a general rise in interest rates. Some of these borrowings will be repaid with the proceeds of the Bank's pending branch acquisitions.

Management cannot accurately predict future interest rates or their effect on the Bank's NPV and net interest income in the future. Certain shortcomings are inherent in the method of analysis presented in the computation of NPV and net interest income. For example, although certain assets and liabilities may have similar maturities or periods of 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 of assets and liabilities may lag behind changes in market interest rates. Additionally, most of Southern Missouri's 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 foregoing table. Finally, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase.

14

LIQUIDITY AND CAPITAL RESOURCES

Southern Missouri's primary potential sources of funds include deposit growth, FHLB advances, amortization and prepayment of loan principal, investment maturities and sales, and on-going operating results. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and loan prepayment rates are significantly influenced by factors outside of the Bank's control, including general economic conditions and competition. Southern Missouri has relied on using FHLB advances as a source for funding cash or liquidity needs.

Southern Missouri uses its liquid assets as well as other funding sources to meet ongoing commitments, to fund loan commitments, to repay maturing certificates of deposit and FHLB advances, to make investments, to fund other deposit withdrawals and to meet operating expenses. At June 30, 2000, the Bank had outstanding commitments to extend credit of $14.3 million (including $5.2 million on lines of credit). Management anticipates that current funding sources will be adequate to meet foreseeable liquidity needs.

The primary sources of funding for the Company are deposits and FHLB advances. For the year ended June 30, 2000, Southern Missouri increased deposits and FHLB advances by $3.8 million and $16.4 million, respectively. During the prior year, Southern Missouri increased deposits by $10.7 million while the level of FHLB advances outstanding remained relatively stable. At June 30, 2000, the Bank had additional borrowing capacity from the FHLB of approximately $33.7 million.

Liquidity management is an ongoing responsibility of the Bank's management. The Bank adjusts its investment in liquid assets based upon a variety of factors including (i) expected loan demand and deposit flows, (ii) anticipated investment and FHLB advance maturities, (iii) the impact on profitability, and (iv) asset/liability management objectives.

At June 30, 2000, the Bank had $82.9 million in certificates of deposit maturing within one year and $33.9 million in other deposits without a specified maturity, as well as scheduled FHLB advances maturing within one year of $19.0 million. Management believes that most maturing interest-bearing liabilities will be retained or replaced by new interest-bearing liabilities.

REGULATORY CAPITAL

Federally insured savings banks are required to maintain a minimum level of regulatory capital. FDIC regulations established capital requirements, including a leverage (or core capital) requirement and a risk-based capital requirement. The FDIC is also authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis.

At June 30, 2000, SMBT exceeded regulatory capital requirements with core and risk-based capital of $21.5 million and $22.8 million, or 11.9% and 21.2% of adjusted total assets and risk-weighted assets, respectively. These capital levels exceeded minimum requirements of 4.0% and 8.0% for adjusted total assets and risk-weighted assets, by approximately $14.3 million and $14.2 million, respectively. Under regulatory guidelines, SMBT was considered well-capitalized at June 30, 2000.

IMPACT OF INFLATION

The consolidated 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 operating results in historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates generally have a more significant impact on a financial institution's performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. In the current interest rate environment, liquidity and maturity structure of the Company's assets and liabilities are critical to the maintenance of acceptable performance levels.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of Notes to Consolidated Financial Statements for a discussion of the impact of recent accounting pronouncements.
15




INDEPENDENT AUDITORS' REPORT



Board of Directors
Southern Missouri Bancorp, Inc.
Poplar Bluff, Missouri


We have audited the accompanying consolidated statements of financial condition of Southern Missouri Bancorp, Inc. and Subsidiary (Company) as of June 30, 2000 and 1999, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 2000. These consolidated financial statements are the responsibility of the Company'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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Southern Missouri Bancorp, Inc. and Subsidiary as of June 30, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2000 in conformity with generally accepted accounting principles.




Poplar Bluff, Missouri
July 19, 2000








16





SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION JUNE 30, 2000 AND 1999

ASSETS	2000	1999
Cash and cash equivalents	$ 4,470,373	4,068,674
Investment and mortgage-backed securities: (Note 2)
Available for sale - at estimated market   value (amortized cost $35,910,780 and   $38,276,905 at June 30, 2000 and 1999,   respectively)	34,910,850	37,878,685
Stock in Federal Home Loan Bank of Des Moines	1,850,000	1,091,000
Loans receivable, net (Note 3)	138,424,750	118,248,638
Accrued interest receivable (Note 4)	1,151,557	1,033,076
Foreclosed real estate, net (Note 5)	463,591	477,537
Premises and equipment (Note 6)	2,549,357	1,878,719
Prepaid expenses and other assets	570,690	296,014
Total assets	$ 184,391,168 ==========	164,972,343 ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits (Note 7)	$ 123,920,293	120,154,540
Advances from borrowers for taxes and insurance	334,841	317,954
Advances from FHLB of Des Moines (Note 8)	37,000,000	20,550,000
Accounts payable and other liabilities	723,061	591,528
Accrued interest payable	956,386	728,859
Total liabilities	162,934,581	142,342,881
Commitments and contingencies (Note 13)	-	-
Preferred stock, $.01 par value; 500,000 shares authorized;       none issued and outstanding	-	-
Common stock, $.01 par value; 3,000,000 shares        authorized; 1,803,201 shares issued	18,032	18,032
Additional paid-in capital	17,517,834	17,545,544
Retained earnings-substantially restricted	14,438,957	13,759,488
Treasury stock of 549,352 shares in 2000 and        424,991 shares in 1999, at cost	(9,451,693)	(7,911,655)
Unearned employee benefits	(436,587)	(531,068)
Accumulated other comprehensive income	(629,956)	(250,879)
Total stockholders' equity	21,456,587	22,629,462
Total liabilities and stockholders' equity	$ 184,391,168 ==========	164,972,343 ==========

See accompanying notes to consolidated financial statements

17



SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED JUNE 30, 2000, 1999 AND 1998

	2000	1999	1998
Interest income:
Loans receivable	$ 9,893,254	9,285,757	9,175,090
Investment securities	1,455,486	967,142	946,447
Mortgage-backed securities	866,792	972,770	1,172,281
Other interest-earning assets	74,631	188,834	150,030
Total interest income	12,290,163	11,414,503	11,443,848
Interest expense:
Deposits (Note 7)	5,422,703	5,263,225	5,150,691
Advances from FHLB	1,496,250	984,168	1,060,788
Total interest expense	6,918,953	6,247,393	6,211,479
Net interest income	5,371,210	5,167,110	5,232,369
Provision for loan losses (Note 3)	215,000	235,000	783,009
Net interest income after
provision for loan losses	5,156,210	4,932,110	4,449,360
Noninterest income:
Gain (loss) on sale of investment
securities, available for sale	14,500	(625)	9,205
Gain (loss) on sale of mortgage-backed
securities, available for sale	(35,705)	(27,942)	69,956
Gain on sale of mortgage-backed securities,
held to maturity	-	-	242
Insurance commissions	31,780	323,603	302,246
Banking service charges	390,949	284,058	198,981
Loan late charges	72,726	82,574	68,845
Gain on sale of insurance agency	-	526,413	-
Other	93,665	67,070	147,828
Total noninterest income	567,915	1,255,151	797,303
Noninterest expense:
General and administrative:
Compensation and benefits	2,205,770	2,237,166	2,457,458
Occupancy and equipment	570,283	496,929	401,141
SAIF deposit insurance premium	47,842	85,265	109,980
Provisions (credit) for losses on
foreclosed real estate (Note 5)	-	-	(51,550)
Professional fees	175,920	136,304	191,583
Advertising	97,887	133,925	116,349
Postage and office supplies	165,350	142,608	133,666
Other	450,904	450,300	301,573
Total noninterest expense	3,713,956	3,682,497	3,660,200
Income before income taxes	2,010,169	2,504,764	1,586,463
Income taxes (Note 10)
Current	775,300	580,300	588,000
Deferred	(85,300)	279,700	(66,000)
	690,000	860,000	522,000
Net income	$ 1,320,169 ==========	1,644,764 ==========	1,064,463 ==========
Basic earnings per common share	$1.03	1.23	.69
Diluted earnings per common share	$1.02	1.20	.67

See accompanying notes to consolidated financial statements

18



SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY YEARS ENDED JUNE 30, 2000, 1999 AND 1998

	Common Stock	Additional Paid-inCapital	Retained Earnings	Treasury Stock	Unearned EmployeeBenefits	Accumulated Other Comprehensive Income	Total Stockholders' Equity
Balance at June 30, 1997	$ 18,032	17,579,778	12,476,753	(2,680,183)	(993,528)	(609)	26,400,243
Net income			1,064,463				1,064,463
Change in unrealized            gain (loss) on available            for sale securities						(30,770)	(30,770)
Minimum pension liability            adjustment						3,575	3,575
Total comprehensive income							1,037,268
Purchase of treasury stock				(3,314,645)			(3,314,645)
Dividends paid ($.50 per share)			(769,485)				(769,485)
Release of ESOP awards		195,480			204,046		399,526
MRP expense, net		52,000			123,658		175,658
Exercise of stock options		(198,500)		381,820			183,320
Balance at June 30, 1998	18,032	17,628,758	12,771,731	(5,613,008)	(665,824)	(27,804)	24,111,885
Net income			1,644,764				1,644,764
Change in unrealized            gain (loss) on available           for sale securities						(355,788)	(355,788)
Cumulative effect of           change in accounting principle,           net of tax (Note 1)						132,713	132,713
Total comprehensive income							1,421,689
Purchase of treasury stock				(2,803,903)			(2,803,903)
Dividends paid ($.50 per share)			(657,007)				(657,007)
Release of ESOP awards		52,250			83,261		135,511
MRP expense, net		16,800			66,309		83,109
MRP shares awarded		14,814			(14,814)		-
Exercise of stock options		(167,078)		505,256			338,178
Balance at June 30, 1999	18,032	17,545,544	13,759,488	7,911,655)	(531,068)	(250,879)	22,629,462
Net income			1,320,169				1,320,169
Change in unrealized            gain (loss) on available           for sale securities						(379,077)	(379,077)
Total comprehensive income							941,092
Purchase of treasury stock					(1,762,530)		(1,762,530)
Dividends paid ($.50 per share)				(640,700)			(640,700)
Release of ESOP awards			23,023			84,021	107,044
MRP expense, net						20,210	20,210
MRP shares awarded			9,750			(9,750)	-
Exercise of stock options		(60,483)		222,492			162,009
Balance at June 30, 2000	$ 18,032 ========	17,517,834 ========	14,438,957 ========	(9,451,693) ========	(436,587) ========	(629,956) ========	21,456,587 ========

See accompanying notes to consolidated financial information

19




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2000, 1999 AND 1998

	2000	1999	1998
Cash flows from operating activities:
Net income	$ 1,320,169	1,644,764	1,064,463
Items not requiring (providing) cash:
Depreciation and amortization	263,726	265,769	217,895
MRP expense and ESOP expense	127,254	201,820	523,187
(Gain) loss on sale of investment securities,            available for sale	(14,500)	625	(9,205)
(Gain) loss on sale of mortgage-backed securities,                  available for sale	35,705	27,942	(69,956)
(Gain) on sale of mortgage-backed securities,                  held to maturity	-	-	(242)
Provision for loan losses	215,000	235,000	783,009
(Gain) on sale of insurance agency	-	(526,413)	-
Provisions (credit) for losses on foreclosed real estate	-	-	(51,550)
Net amortization of deferred income, premiums,                 and discounts	87,489	117,757	131,371
Changes in:
Accrued interest receivable	(118,481)	(125,298)	172,189
Prepaid expenses and other assets	(82,027)	189,333	(17,494)
Accounts payable and other liabilities	131,533	132,409	(123,706)
Accrued interest payable	227,527	147,269	(266,845)
Net cash provided by operating activities	2,193,395	2,310,977	2,353,116
Cash flows from investing activities:
Net (increase) decrease in loans	(20,522,582)	874,888	(12,170,696)
Proceeds from sales of investment securities,           available for sale	1,034,500	999,375	2,584,919
Proceeds from maturing investment securities,           available for sale	415,000	5,440,000	6,660,000
Proceeds from maturing investment securities,           held to maturity	-	875,000	25,000
Purchase of investment securities,           available for sale	(2,759,750)	(14,581,010)	(4,993,594)
Proceeds from sales of mortgage-backed           securities, held to maturity	-	-	50,434
Proceeds from sales of mortgage-backed           securities, available for sale	3,365,084	1,700,497	7,493,339
Proceeds from maturing mortgage-backed           securities, available for sale	2,202,514	5,659,654	5,396,806
Proceeds from maturing mortgage-backed           securities, held to maturity	-	-	80,159
Purchase of mortgage-backed            securities, available for sale	(1,976,250)	(10,330,331)	(1,107,089)
Proceeds from sales of certificates of deposit	-	-	93,825
Proceeds from reduction of FHLB stock	-	-	466,200
Purchase of FHLB stock	(759,000)	(37,500)	-
Purchase of premises and equipment	(934,364)	(282,257)	(390,511)
Proceeds from sale of repossessed assets	178,122	39,477	32,468
Net cash (used in) provided by investing activities	$ (19,756,726)	(9,642,207)	4,221,260

See accompanying notes to consolidated financial statements

20




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued YEARS ENDED JUNE 30, 2000, 1999 AND 1998

	2000	1999	1998
Cash flows from financing activities:
Net increase in demand      deposits and savings accounts	$ 1,894,048	6,331,517	771,880
Net increase (decrease) in      certificates of deposit	1,871,705	4,412,587	(10,066,045)
Net increase (decrease) in advances from      borrowers for taxes and insurance	16,887	2,831	(6,486)
Net increase (decrease) in advances from      FHLB of Des Moines	16,450,000	(518,905)	7,533,584
Dividends on common stock	(640,700)	(657,007)	(769,485)
Exercise of stock options	135,620	306,310	178,120
Payments to acquire treasury stock	(1,762,530)	(2,803,903)	(3,314,645)
Net cash provided by (used in)                financing activities	17,965,030	7,073,430	(5,673,077)
Increase (decrease) in cash and cash equivalents	401,699	(257,800)	901,299
Cash and cash equivalents at beginning of period	4,068,674	4,326,474	3,425,175
Cash and cash equivalents at end of period	$ 4,470,373 =======	4,068,674 =======	4,326,474 =======
Supplemental disclosures of cash flow information:
Noncash investing and financing activities
Conversion of loans to foreclosed real estate	$ 424,507	395,375	116,371
Conversion of foreclosed real estate to loans	$ 175,000	134,000	6,950
Transfer of investment securities from held to       maturity to available for sale	$ -	3,766,292	-
Cash paid during the period for
Interest (net of interest credited)	$ 2,677,920	1,577,100	2,062,670
Income taxes	$ 706,051	468,514	583,928

See accompanying notes to consolidated financial statements

21




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

NOTE 1: Organization and Summary of Significant Accounting Policies

Organization
Southern Missouri Bancorp, Inc., a Missouri corporation (the Company) was organized in 1994 and is the parent company of Southern Missouri Bank and Trust (the Bank) and the Bank's wholly-owned subsidiary S.M.S. Financial Services, Inc. Substantially all of the Company's consolidated revenues are derived from the operations of the Bank, and the Bank represents substantially all of the Company's consolidated assets and liabilities.

Basis of Financial Statement Presentation
The financial statements of the Company have been prepared in conformity with generally accepted accounting principles and general practices within the financial institution industry. In the normal course of business, the Company encounters two significant types of risk; economic and regulatory. Economic risk is comprised of interest rate risk, credit risk, and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities reprice on a different basis than its interest-earning assets. Credit risk is the risk of default on the Company's loan portfolio that results from the borrowers' inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the value of the Company's investment in real estate.

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare the consolidated financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. The determination of the provision for loan losses and the valuation of real estate are based on estimates that are particularly susceptible to changes in the economic environment and market conditions. These balances may be adjusted in the future based on such changes, or based on requirements of regulatory examiners of the Company's subsidiary.

Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary, the Bank, and the Bank's wholly-owned subsidiary, S.M.S. Financial Services, Inc. The insurance agency of S.M.S. Financial Services, Inc. was sold effective May 31, 1999. The operations of the agency were not material to the consolidated financial condition or operations of the Company. All significant intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash and due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less. Interest bearing deposits in other depository institutions were $3,074,277 and $2,430,037 at June 30, 2000 and 1999, respectively.

Investment and Mortgage-Backed Securities
Effective April 1, 1999, the Company adopted Statement of Financial Accounting Standards(SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and hedging activities. The statement further requires that all derivatives should be recognized as either assets or liabilities and measured at the fair value. The accounting for changes in the fair value, or gains and losses, of a derivative depends on the use of the derivative and resulting designation. Presently, management does not intend to purchase derivative instruments or enter into hedging activities.

With the adoption of SFAS No. 133, the Company transferred its remaining held to maturity investment securities into the available for sale category. All investments transferred were obligations of state and political subdivisions with an amortized cost of $3,766,292 at the date of transfer. The cumulative effect of the change in accounting principle of $132,713, net of income taxes of $77,942, is included as a credit in other comprehensive income for the year ended June 30, 1999.



22






SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


The transition provisions of SFAS No. 133 provide that at the date of initial application, any debt security categorized as held to maturity may be transferred into the available for sale category without calling into question the Company's intent to hold other debt securities to maturity in the future.

Debt securities classified as available for sale are carried at fair value. Their related unrealized gains and losses, net of tax, are reported in accumulated other comprehensive income, a component of stockholders' equity. Debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt securities that are bought and held principally for the purpose of selling in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. No securities have been classified as trading securities.

Premiums and discounts on debt securities are amortized or accreted as adjustments to income over the estimated life of the security using the level yield method. Gain or loss on the sale of securities is based on the specific identification method. The fair value of securities is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

The Company does not invest in collateralized mortgage obligations that are considered high risk.

The Bank is a member of the Federal Home Loan Bank system. As a member of this system, it is required to maintain an investment in capital stock of the Federal Home Loan Bank (FHLB) in an amount equal to the greater of 1% of its outstanding home loans, 0.3% of its total assets, or one-twentieth of its outstanding advances from FHLB.

Loans Receivable, Net
Loans receivable, net are stated at unpaid principal balances, less the allowance for loan losses, net deferred loan origination fees, deferred gain on real estate and unearned discounts.

Discounts on mortgage loans are amortized to income using the interest method over the remaining period to contractual maturity adjusted for prepayments. Discounts on consumer loans are recognized over the lives of the loans using the interest method.

The allowance for loan losses is increased by charges to income and decreased by charge-offs (net of recoveries). Management's periodic evaluation of the adequacy of the allowance is based on the Company's past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral, and current economic conditions.

Loans are placed on nonaccrual status upon becoming 90 days contractually past due as to principal or interest, and in management's opinion full collection of interest is doubtful. Interest income previously accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. Cash receipts on a nonaccrual loan are applied to principal and interest in accordance with its contractual terms unless full payment of principal is not expected, in which case cash receipts, whether designated as principal or interest, are applied as a reduction of the carrying value of the loan. A non-accrual loan is generally returned to accrual status when principal and interest payments are current, full collectibility of principal and interest is reasonably assured and a consistent record of performance has been demonstrated.

In accordance with SFAS No. 114, "Accounting by Creditor for Impairment of a Loan," as amended, the Company considers a loan falling within its scope impaired when, based upon current information and events, it is probable that it will be unable to collect all amounts due, both principal and interest, according to the contractual terms of the loan agreement. SFAS No. 114 does not apply to large groups of smaller-balance homogeneous loans that are collectively evaluated for impairment, which, for the Company, include residential real estate loans and consumer loans. Valuation allowances are established for impaired loans for the difference between the loan amount and fair value of collateral less estimated selling costs. Impaired loans are placed on nonaccrual status at the point they become contractually delinquent 90 days or more and cash receipts are applied, and interest income recognized, pursuant to the discussion above for nonaccrual loans. Impairment losses are recognized through an increase in the allowance for loan losses.


23






SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998



Loan Origination Fees
Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the interest method over the contractual life of the loans.

Foreclosed Real Estate
Real estate acquired by foreclosure or by deed in lieu of foreclosure is initially recorded at the lower of cost or fair value less estimated selling costs. Costs for development and improvement of the property are capitalized.

Valuations are periodically performed by management, and an allowance for losses is established by a charge to operations if the carrying value of a property exceeds its estimated fair value, less estimated selling costs.

Loans to facilitate the sale of real estate acquired in foreclosure are discounted if made at less than market rates. Discounts are amortized over the fixed interest period of each loan using the interest method.

Income Taxes
The Company and its subsidiary file consolidated income tax returns. Deferred income taxes are provided on temporary differences between the financial reporting bases and income tax bases of the Company's assets and liabilities.

Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation and include expenditures for major betterments and renewals. Maintenance, repairs, and minor renewals are expensed as incurred. When property is retired or sold, the retired asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss taken into income.

Depreciation is computed by use of straight-line and accelerated methods over the estimated useful lives of the assets. Estimated lives are generally twenty to forty years for premises, and five to seven years for equipment.

Earnings Per Share
Basic income per share is computed using the weighted average number of common shares outstanding during each year. Diluted income per share includes the effect of all dilutive potential common shares (primarily stock options) outstanding during each year.

Segments
Southern Missouri Bancorp, Inc., through the branch network of its subsidiary, Southern Missouri Bank and Trust, provides a broad range of financial services to individuals and companies in Southeast Missouri. These services include demand, time and savings deposits, and lending activities. While the Company's chief decision makers monitor the revenue streams of the various Company products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Company's banking operations are considered by management to be aggregated in one reportable segment.

The following paragraphs summarize the impact of new accounting pronouncements:

There are no recent accounting pronouncements that are expected to effect the financial statements of the Company.


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SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


NOTE 2: Investment and Mortgage-Backed Securities

Available for Sale - The amortized cost, gross unrealized gains, gross unrealized losses and estimated market value of securities available for sale consisted of the following:

	June 30, 2000
	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Market Value
Investment securities:
U.S. government and federal agency obligations	$ 18,339,118	-	593,386	17,745,732
Obligations of states and political subdivisions	4,146,903	62,348	789	4,208,462
Total investment securities	22,486,021	62,348	594,175	21,954,194
Mortgage-backed securities:
GNMA certificates	1,977,258	-	39,860	1,937,398
FNMA certificates	603,330	-	17,450	585,880
Collateralized mortgage         obligations	10,844,171	-	410,793	10,433,378
Total mortgage-backed securities	13,424,759	-	468,103	12,956,656
Total	$ 35,910,780 ==========	62,348 ==========	1,062,278 ==========	34,910,850 ==========
	June 30, 1999
	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Market Value
Investment securities:
U.S. government and federal agency obligations	$ 15,579,972	-	359,977	15,219,995
Obligations of states and political subdivisions	5,591,415	167,634	-	5,759,049
Total investment securities	21,171,387	167,634	359,977	20,979,044
Mortgage-backed securities:
GNMA certificates	4,971,128	18,253	8,673	4,980,708
FNMA certificates	2,124,168	4,689	21,985	2,106,872
FHLMC certificates	240,000	-	276	239,724
Collateralized mortgage obligations	9,770,222	550	198,435	9,572,337
Total mortgage-backed securities	17,105,518	23,492	229,369	16,899,641
Total	$ 38,276,905 ==========	191,126 ==========	589,346 ==========	37,878,685 ==========

The amortized cost and estimated market value of investment and mortgage-backed securities by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2000
	Available for Sale
	Amortized Cost	Estimated Market Value
Due in one year or less	$ 345,313	$ 346,597
Due after one year thru 5 years	21,200,276	20,628,760
Due after 5 years thru 10 years	940,432	978,837
Total investment securities	22,486,021	21,954,194
Mortgage-backed securities	13,424,759	12,956,656
Total	$35,910,780 ==========	$34,910,850 ==========

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SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


Proceeds from sales of investment and mortgage-backed securities and gross realized gains and losses are summarized below.

	June 30,
	2000	1999	1998
Proceeds from sales:
Investment securities	$ 1,034,500	999,375	2,584,919
Mortgage-backed securities	3,365,084	1,700,497	7,543,773
Gross realized gains:
Investment securities	14,500	-	12,427
Mortgage-backed securities	-	4,879	81,187
Gross realized losses:
Investment securities	-	(625)	(3,222)
Mortgage-backed securities	$ (35,705)	(32,821)	(10,989)

Included in the 1998 gross realized gains on mortgage-backed securities are sales of small balance pools of mortgage-backed securities held to maturity, that had an amortized cost of $50,192 which met the condition described under paragraph 11b of SFAS No. 115 and are permitted to be sold prior to maturity.

The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits amounted to $14,238,015 and $11,692,878 at June 30, 2000 and 1999, respectively.

Adjustable rate mortgage loans included in mortgage-backed securities at June 30, 2000 and 1999 amounted to $3,801,832 and $6,866,095, respectively.

NOTE 3: Loans Receivable, net

Loans receivable, net are summarized as follows:

	June 30,
	2000	1999
Real estate loans:
Conventional	$ 94,747,953	87,246,749
Construction	5,703,982	3,553,651
Commercial	23,303,047	19,047,821
Loans secured by        deposit accounts	824,899	826,981
Consumer loans	8,829,338	8,632,758
Commercial	7,349,605	1,480,800
	140,758,824	120,788,760
Loans in process	(1,021,289)	(1,296,384)
Deferred loan fees, net	(31,673)	(42,491)
Deferred gain on sale        of real estate	(4,159)	(10,100)
Allowance for loan        losses	(1,276,953)	(1,191,147)
	$ 138,424,750 ============	118,248,638 ============

Adjustable-rate loans included in the loan portfolio amounted to $82,167,478 and $77,619,448 at June 30, 2000 and 1999, respectively.

One-to four-family residential real estate loans amounted to $91,290,092 and $85,196,804 at June 30, 2000 and 1999, respectively.


26




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

Real estate construction loans are secured principally by single and multi-family dwelling units.

Commercial real estate loans are secured principally by commercial buildings, motels, medical centers, churches and fast food restaurants.

Following is a summary of activity in the allowance for loan losses:

	June 30,
Balance, beginning of period	$1,191,147	1,295,222	706,487
Loans charged-off	(240,036)	(429,998)	(326,382)
Recoveries of loans previously charged off	110,842	90,923	132,108
Net charge-offs	(129,194)	(339,075)	(194,274)
Provision charged to expense	215,000	235,000	783,009
Balance, end of period	$ 1,276,953 ============	1,191,147 ============	1,295,222 ============

The Company ceased recognition of interest income on loans with a book value of $537,000, $181,000 and $533,000 at June 30, 2000, 1999 and 1998, respectively. The average balance of nonaccrual loans for the year ended June 30, 2000 was approximately $217,000. Allowance for losses on nonaccrual loans amounted to approximately $146,000 at June 30, 2000. Interest income of approximately $23,000, $13,000 and $15,000 was recognized on these loans for the years ended June 30, 2000, 1999 and 1998, respectively. Gross interest income would have been approximately $51,000, $17,000 and $46,000 for the years ended June 30, 2000, 1999 and 1998, respectively, if the interest payments had been received in accordance with the original terms. The Bank is not committed to lend additional funds to customers whose loans have been placed on nonaccrual.

Of the above nonaccrual loans at June 30, 2000, 1999 and 1998 $0, $0, and $0, respectively, were considered to be impaired. The average balance of impaired loans for the years ended June 30, 2000, 1999 and 1998 was $0, $26,000, and $297,000, respectively.

Following is a summary of loans to directors, executive officers and loans to corporations in which executive officers and directors have a substantial interest:

Balance, June 30, 1998	$ 458,436
Additions	25,737
Repayments	(49,603)
Balance, June 30, 1999	434,570
Additions	604,294
Repayments	(234,986)
Balance, June 30, 2000	$ 803,878 ============

These loans were made on substantially the same terms as those prevailing at the time for comparable transactions with unaffiliated persons.




27




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


NOTE 4: Accrued Interest Receivable

Accrued interest receivable is summarized as follows:

	June 30,
	2000	1999
Investment securities	$ 408,314	380,540
Mortgage-backed securities	72,279	92,371
Loans receivable	670,964	560,165
	$ 1,151,557 =========	1,033,076 =========

NOTE 5: Foreclosed Real Estate

Foreclosed real estate consists of the following:

	June 30,
	2000	1999
Foreclosed real estate	$ 463,591	477,537
Allowance for losses	-	-
	$ 463,591 ========	477,537 ========

Activity in the allowance for losses for foreclosed real estate is as follows:

	June 30,
	2000	1999	1998
Balance, beginning of period	$               0	0	335,297
Charge-offs and recoveries, net	0	0	(283,747)
Provisions (credit) for losses on foreclosed real estate	0	0	(51,550)
Balance, end of period	$               0 ========	0 ========	0 ========

NOTE 6: Premises and Equipment

Following is a summary of premises and equipment:

	June 30,
	2000	1999
Land	$ 650,941	342,042
Buildings and improvements	2,418,814	2,303,103
Furniture, fixtures, and equipment	1,630,995	1,124,009
Automobiles	51,696	62,821
	4,752,446	3,831,975
Less accumulated depreciation	(2,203,089)	(1,953,256)
	$ 2,549,357 ========	1,878,719 ========

Depreciation expense for the years ended June 30, 2000, 1999 and 1998 was $263,726, $247,668 and $189,522, respectively.

The Bank signed contracts to build two full service branches in July 2000. Estimated completion date of these two branches is March 2001 at an estimated cost of $1,200,000.


28





SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


NOTE 7: Deposits

Deposits are summarized as follows:

	June 30,
	2000	1999
Non-interest bearing accounts	$ 2,049,111	2,316,468
NOW accounts	11,408,738	9,112,465
Money market deposit accounts	13,572,245	13,222,131
Savings accounts	6,864,899	7,349,881
Total transaction accounts	33,894,993	32,000,945
Certificates:
4.00 - 4.99%	28,950,737	59,838,980
5.00 - 5.99%	37,008,198	28,231,135
6.00 - 6.99%	23,947,540	-
7.00 - 7.99%	52,666	25,360
8.00 - 8.99%	66,159	58,120
Total certificates, 5.47%      and 4.94%, respectively	90,025,300	88,153,595
Total deposits	$ 123,920,293 ========	120,154,540 ========
Weighted-average rates - deposits	4.79% ========	4.47% ========

The aggregate amount of certificates of deposit with a minimum denomination of $100,000 was $20,507,645 and $15,266,726 at June 30, 2000 and 1999, respectively.

Certificate maturities at June 30, 2000 are summarized as follows:

July 1, 2000 to June 30, 2001	$ 82,888,643
July 1, 2001 to June 30, 2002	4,074,382
July 1, 2002 to June 30, 2003	1,943,932
July 1, 2003 to June 30, 2004	966,090
July 1, 2004 to June 30, 2005	152,253
	$ 90,025,300 =========

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SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998



Interest expense on deposits is summarized as follows:

	Year Ended June 30,
	2000	1999	1998
NOW accounts	$ 239,815	210,180	186,254
Money market deposit accounts	606,109	414,011	240,803
Savings accounts	174,494	181,567	202,143
Certificates of deposit	4,402,285	4,457,467	4,521,491
	$ 5,422,703 =========	5,263,225 =========	5,150,691 =========

NOTE 8: Advances from Federal Home Loan Bank of Des Moines

Advances from Federal Home Loan Bank of Des Moines are summarized as follows:

Maturity	Call Date or Quarterly Thereafter	Interest Rate	2000	1999
07-06-00	-	6.60	$ 7,000,000	-
01-10-01	07-10-00	6.67	9,000,000	-
02-15-01	07-17-00	6.64	3,000,000	-
02-06-08	02-06-01	5.17	3,000,000	3,000,000
10-26-09	10-25-00	5.50	10,000,000	-
01-20-10	01-22-01	5.77	5,000,000	-
01-22-08	07-22-99	4.79	-	16,800,000
07-02-99	-	4.99	-	750,000
			$ 37,000,000 ========	20,550,000 ========
Weighted average rate			6.09% ========	4.85% ========

In addition to the above advances, the Bank had an available line of credit amounting to $33,672,000, $39,785,000 and $42,131,000 with the FHLB at June 30, 2000, 1999 and 1998, respectively.

Advances from Federal Home Loan Bank of Des Moines are secured by FHLB stock and one- to four-family mortgage loans of $46,250,000 and $26,715,000 at June 30, 2000 and 1999, respectively. Scheduled principal maturities of advances from Federal Home Loan Bank of Des Moines over the next five years are as follows:

July 1, 2000 to June 30, 2001	$ 19,000,000
July 1, 2001 to June 30, 2002	-
July 1, 2002 to June 30, 2003	-
July 1, 2003 to June 30, 2004	-
July 1, 2004 to June 30, 2005	-
Thereafter	18,000,000

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SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


NOTE 9: Employee Benefits

The Bank has adopted a 401(k) profit sharing plan that covers substantially all eligible employees. Contributions to the plan are at the discretion of the Board of Directors of the Bank. During 2000, 1999 and 1998, there were no contributions made to the plan.

The Bank established a tax-qualified employee stock ownership plan (ESOP) in April 1994. The plan covers substantially all employees who have attained the age of 21 and completed one year of service.

The Bank makes contributions to the ESOP equal to the ESOP's debt service less dividends on unallocated ESOP shares used to repay the ESOP loan. Dividends on allocated ESOP shares are paid to participants of the ESOP. The ESOP shares are pledged as collateral on the ESOP loan.

Shares are released from collateral and allocated to participants based on pro-rata compensation as the loan is repaid over seven years. Effective July 1, 1998, the loan terms were modified and principal payments were extended an additional four years. Benefits are vested over five years. Forfeitures are allocated on the same basis as other contributions. Benefits are payable upon a participant's retirement, death, disability or separation of service. The purchase of the shares of the ESOP has been recorded in the consolidated financial statements through a credit to common stock and additional paid-in capital with a corresponding charge to a contra equity account for the unreleased shares. As shares are committed to be released from collateral, the Bank reports compensation expense equal to the average fair value of the ESOP shares committed to be released. The ESOP expense for 2000, 1999 and 1998 was $107,044, $135,511, and $399,526, respectively.

The number of ESOP shares at June 30, 2000 were as follows:

Allocated shares	66,976
Unreleased shares	34,283
Total ESOP shares	101,259 ======

The fair value of unreleased ESOP shares at June 30, 2000 was $437,108.

The Bank adopted a management recognition plan (MRP) for the benefit of non-employee directors and two MRPs for officers and key employees (who may also be directors) in April 1994. Total shares in the MRP left to be issued are 4,158 at June 30, 2000. During 2000, 1999, and 1998, the Bank granted 2,700, 1,500 and 1,500 shares, respectively, to employees. The shares granted are in the form of restricted stock payable at the rate of 20% of such shares per year. Compensation expense in the amount of the fair market value of the common stock at the date of grant will be recognized pro rata over the five years during which the shares are payable.

The Board of Directors can terminate the MRPs at any time, and if it does so, any shares not allocated will revert to the Company. The MRP expense for 2000, 1999 and 1998 was $20,210, $66,309 and $123,658, respectively.

The Company sponsors a stock option plan adopted in April 1994. The purpose of the plan is to provide additional incentive to certain directors, officers and key employees of the Bank. In October 1999, the stockholders voted to increase the number of shares reserved for options by 67,932 shares. The stock options are granted at the fair market value of the common stock on the date of the grant. Through June 30, 1999, all options granted were 100% vested at the grant date. For the shares granted during the current year, the vesting period ranged from the grant date up to a five year period. All options expire ten years from the date of the grant. At June 30, 2000, there are 50,932 shares remaining available for option grants.




31



SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


Changes in options outstanding were as follows:

	Number of Shares	Weighted Average Exercise Price
Balance at June 30, 1997	111,137	$ 10.00
Granted	25,000	17.33
Exercised	(17,812)	10.00
Balance at June 30, 1998	118,325	12.08
Granted	15,000	13.50
Exercised	(30,631)	10.00
Balance at June 30, 1999	102,694	12.29
Granted	31,491	13.48
Exercised	(13,562)	10.00
Balance at June 30, 2000	120,623 ======	12.86

The Company has estimated the fair value of awards granted under its stock option plan during 2000, 1999, and 1998 utilizing the Black-Scholes pricing model.

For the options granted in 2000, 1999 and 1998, the Company has applied Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, no compensation expense has been recognized for its stock-based compensation plans. Had compensation cost for the Company's stock option plan been determined based upon the fair value at the grant date for awards under these plans consistent with the methodology prescribed under SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's net income and diluted earnings per share would have been reduced by approximately $62,000, $38,000 and $111,000, or $.05, $.03 and $.07 per share in 2000, 1999 and 1998, respectively.

Following is a summary of the fair values of options granted using the Black-Scholes pricing model.

	2000	1999	1998
Fair value at grant date	$ 93,000	$ 57,000	$ 167,900
Assumptions:
Expected dividend yield	5.00%	5.00%	5.00%
Expected volatility	22.00%	19.00%	38.00%
Risk-free interest rate	6.20%	5.64%	5.67%
Weighted-average expected life	5 years	5 years	5 years

The Bank adopted a directors' retirement plan in April 1994 for outside directors. The directors' retirement plan provides that each non-employee director (participant) shall receive, upon termination of service on the Board on or after age 60, other than termination for cause, a benefit in equal annual installments over a five year period. The benefit will be based upon the product of the participant's vesting percentage and the total Board fees paid to the participant during the calendar year preceding termination of service on the Board. The vesting percentage shall be determined based upon the participant's years of service on the Board, whether before or after the reorganization date, according to the following schedule:


32




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

Full Years of Service	Non-Employee Director's
on the Board	Vested Percentage
Less than 5	0%
5 to 9	50%
10 to 14	75%
15 or more	100%

In the event that the participant dies before collecting any or all of the benefits, the Bank shall pay the participant's beneficiary. No benefits shall be payable to anyone other than the beneficiary, and shall terminate on the death of the beneficiary.

The following items are components of net pension cost for the years ended June 30, 2000, 1999 and 1998.

	2000	1999	1998
Service cost - benefits earned during the year	$ 4,062	1,836	1,319
Interest cost on benefit obligation	11,998	11,401	2,625
Amortization of prior service cost and net obligation	0	0	33,218
Amortization of unrecognized gains	(1,148)	(1,178)	-
Net pension cost	$14,912 ======	12,059 ======	37,162 ======

The following table sets forth the directors' retirement plan's funded status and amounts recognized in the consolidated financial statements at June 30, 2000 and 1999:

	2000	1999
Vested accumulated benefits	$160,932	162,054
Non-vested accumulated benefits	8,648	5,283
Total accumulated benefits	169,580	167,337
Effect of projected future fee increases	-	-
Projected benefit obligation for service rendered to date	169,580	167,337
Unrecognized net gain	21,671	24,002
Accrued pension cost included        in other liabilities	$191,251 ========	191,339 ========

A reconciliation of the projected benefit obligation and fair value of plan assets is summarized as follows:

	2000		1999
	Projected Benefit Obligation	Plan Assets at Fair Value	Projected Benefit Obligation	Plan Assets at Fair Value
Balance, beginning of year	$ 167,337	-	188,880	-
Service cost	4,062	-	1,836	-
Interest cost	11,998	-	12,073	-
Actual return	-	-	-	-
Actuarial gain	1,183	-	(25,852)	-
Contributions	-	15,000	-	9,600
Benefits paid	(15,000)	(15,000)	(9,600)	(9,600)
Balance, end of year	$ 169,580 ======	- ======	167,337 ======	- ======

33




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

	2000	1999	1998
Weighted average assumptions as of June 30:
Discount rate	7%	7%	7%
Rate of directors fees increase	0%	0%	0%

NOTE 10: Income Taxes

SFAS No. 109 requires the Bank to establish a deferred tax liability for the tax bad debt reserves over the base year amounts. The Bank's base year tax bad debt reserves are $1,798,626. The estimated deferred tax liability on such amount is approximately $611,000, which has not been recorded in the accompanying consolidated financial statements. If these tax bad debt reserves are used for other than loan losses, the amount will be subject to Federal income taxes at the then prevailing corporate rate.

The components of net deferred tax assets are summarized as follows:

	2000	1999
Deferred tax assets:
Provision for losses on loans and foreclosed real estate	$408,664	356,139
Accrued compensation and benefits	119,704	94,631
Base year tax bad debt reserve at 12/31/87 in excess of current tax bad debt reserve	-	30,484
Unrealized loss on available for sale securities	369,974	147,342
Gross deferred tax assets	898,342	628,596
Valuation allowance	-	30,484)
Total deferred tax assets	898,342	598,112
Deferred tax liabilities:
FHLB stock dividends	166,566	166,566
Purchase accounting adjustments	51,327	55,327
Premises and equipment, tax vs book accumulated depreciation	75,975	66,683
Installment sale	181,977	194,971
Total deferred tax liabilities	475,845	483,547
Net deferred tax assets	$422,497 =======	114,565 =======

The valuation allowance decreased by $30,484 during the year ended June 30, 2000.

Income taxes are summarized as follows:

	Year Ended June 30,
	2000	1999	1998
Current:
Federal	$661,700	482,000	548,500
State	113,600	98,300	39,500
	775,300	580,300	588,000
Deferred:
Federal	(76,800)	258,700	(65,000)
State	(8,500)	21,000	(1,000)
	(85,300)	279,700	(66,000)
	$690,000 =======	860,000 =======	522,000 =======

34





SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


The provision for income taxes varies from the amount of income tax determined by applying the statutory Federal income tax rate to income before income taxes as a result of the following differences:

	Year Ended June 30,
	2000	1999	1998
Tax at statutory Federal rate	$683,457	851,620	539,397
Increase (reduction) in taxes resulting from:
Nontaxable municipal income	(66,493)	(94,951)	(98,135)
State tax, net of Federal benefit	69,300	83,592	26,070
Nondeductible ESOP expenses	7,827	15,894	66,463
Other, net	(4,091)	3,845	(11,795)
Actual provision	$690,000 =======	860,000 =======	522,000 =======

Deferred income tax expense represents the tax effects of reporting income and expense in different periods for financial reporting purposes than tax purposes as follows:

	Year Ended June 30,
	2000	1999	1998
Accrued income and expense	$ (25,073)	19,203	(30,199)
Purchase accounting adjustments	(4,000)	(2,897)	(3,926)
Provision for losses on loans and foreclosed real estate	(52,525)	52,175	(54,090)
Premises and equipment, tax vs book accumulated depreciation	9,292	16,248	22,215
Installment sale	(12,994)	194,971	-
	$ (85,300) =======	279,700 =======	(66,000) =======

NOTE 11: Comprehensive Income

SFAS No. 130 "Reporting Comprehensive Income" requires the reporting of comprehensive income and its components. Comprehensive income is defined as the change in equity from transactions and other events and circumstances from non-owner sources, and excludes investments by and distributions to owners. Comprehensive income includes net income and other items of comprehensive income meeting the above criteria. Components of other comprehensive income are as follows:

	Year Ended June 30,
	2000	1999	1998
Unrealized gains (losses) on available for sale securities:
Unrealized holding gains (losses) arising during period	$ (612,555)	(593,309)	28,876
Less: reclassification adjustments for (gains) losses    realized in net income	21,205	28,567	(79,161)
Total unrealized gains (losses) on securities	(591,350)	(564,742)	(50,285)
Income tax expense (benefit)	(212,273)	(208,954)	(19,515)
Net unrealized gains (losses) on securities	(379,077)	(355,788)	(30,770)
Minimum pension liability adjustment	-	-	3,575
Cumulative effect of change in accounting principle, net of    income taxes of $77,942 (See Note 1)	-	132,713	-
Other comprehensive income (loss)	$ (379,077) =======	(223,075) =======	(27,195) =======

35





SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

At June 30, 2000, 1999, and 1998, accumulated other comprehensive income in the statement of financial condition consisted entirely of unrealized gains (losses) on available for sale investment and mortgage-backed securities.

NOTE 12: Stockholders' Equity and Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory -- and possibly additional discretionary -- actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank'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 Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital and Tier I risk-based capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average total assets (as defined). Management believes, as of June 30, 2000, that the Bank meets all capital adequacy requirements to which it is subject.

As of June 30, 2000, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank's category.

The following table summarizes the Bank's actual and required regulatory capital as of June 30, 2000 and 1999:

	Actual		For CapitalAdequacyPurposes (1)		To Be Well CapitalizedUnder Prompt CorrectiveAction Provisions (1)
	Amount	Ratio	Amount	Ratio	Amount	Ratio
	(Dollars in Thousands)
As of June 30, 2000:
Total Capital (to Risk-Weighted Assets)	$22,759	21.2%	$8,593	8.0%	$10,741	10.0%
Tier I Capital (to Risk-Weighted Assets)	21,482	20.0%	4,296	4.0%	6,445	6.0%
Tier I Capital (to Average Assets)	21,482	11.9%	7,229	4.0 %	9,037	5.0%
As of June 30, 1999:
Total Capital (to Risk-Weighted Assets)	21,908	24.5%	7,142	8.0%	8,927	10.0%
Tier I Capital (to Risk-Weighted Assets)	20,792	23.3%	3,541	4.0%	5,356	6.0%
Tier I Capital (to Average Assets)	20,792	12.7%	6,565	4.0%	8,206	5.0%

____________________

(1) For capital adequacy purposes and to be well capitalized under the prompt corrective action provisions, the amount must be greater than or equal to the ratio.

The Bank's ability to pay dividends on its common stock to the Company is restricted to maintain adequate capital as shown in the above table.

NOTE 13: Commitments and Contingencies

In the ordinary course of business, the Bank has various outstanding commitments and contingent liabilities that are not reflected in the accompanying consolidated financial statements. The Bank is involved in litigation of a routine nature which is being defended and handled in the ordinary course of business. These matters are not considered significant to the Company's financial condition.


36




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

NOTE 14: Off-Balance-Sheet and Credit Risk

The Company's consolidated financial statements do not reflect various financial instruments to extend credit to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the statements of financial condition. A summary of the Company's commitments to extend credit and standby letters of credit is as follows:

	Contract or Notional Amount
	June 30,
	2000	1999
Commitments to extend credit	$14,297,519	6,520,072
Standby letters of credit	$116,010	102,170

At June 30, 2000, total commitments to originate fixed rate loans with terms in excess of one year were $1.5 million at interest rates ranging from 7.9% to 9.9%. Commitments to extend credit and standby letters of credit include exposure to some credit loss in the event of nonperformance of the customer. The Company's policies for credit commitments and financial guarantees are the same as those for extension of credit that are recorded in the statements of financial condition. The commitments extend over varying periods of time with the majority being disbursed within a thirty-day period.

The Company grants collateralized commercial, real estate, and consumer loans to customers in southeast Missouri. Although the Company has a diversified portfolio, loans aggregating $94,386,040 at June 30, 2000, are secured by single and multi-family residential real estate in the Company's primary lending area.

NOTE 15: Earnings Per Share

The following table sets forth the computations of basic and diluted earnings per common share for the year ended June 30:

	2000	1999	1998
Numerator - net income	$ 1,320,169 ========	1,644,764 ========	1,064,463 ========
Denominators:
Denominator for basic earnings per share -
Weighted average shares outstanding	1,277,562	1,334,244	1,532,910
Common equivalent shares due to stock options under treasury stock method	13,496	31,793	51,563
Denominator for diluted earnings per share	1,291,058 ========	1,366,037 ========	1,584,473 ========
Basic earnings per common share	$ 1.03	1.23	.69
Diluted earnings per common share	$ 1.02	1.20	.67

37





SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

NOTE 16: Fair Value of Financial Instruments

The carrying amounts and estimated fair values of the Company's financial instruments at June 30, 2000 and 1999, are summarized as follows:

	2000		1999
	Carrying Amount	FairValue	Carrying Amount	FairValue
Non-trading instruments and nonderivatives:
Cash and cash equivalents	$ 4,470,373	4,470,373	4,068,674	4,068,674
Investment and mortgage-             backed securities available for sale	34,910,850	34,910,850	37,878,685	37,878,685
Stock in FHLB of Des Moines	1,850,000	1,850,000	1,091,000	1,091,000
Loans receivable, net	138,424,750	136,002,792	118,248,638	118,890,008
Deposits	123,920,293	123,794,141	120,154,540	118,914,387
Advances from FHLB of Des Moines	$ 37,000,000	36,940,000	20,550,000	19,864,000

The following methods and assumptions were used in estimating the fair values of financial instruments:

Cash and cash equivalents are valued at their carrying amounts due to the relatively short period to maturity of the instruments.

Fair values of securities and mortgage-backed securities are based on quoted market prices or, if unavailable, quoted market prices of similar securities.

Stock in FHLB of Des Moines is valued at cost, which represents redemption value and approximates fair value.

Fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics are aggregated for purposes of the calculations.

Deposits with no defined maturities, such as NOW accounts, savings accounts and money market deposit accounts, are valued at the amount payable on demand at the reporting date.

The fair value of certificates of deposit is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Fair value of advances from the FHLB of Des Moines is estimated by discounting maturities using an estimate of the current market for similar instruments.

NOTE 17: Pending Branch Purchases and Sales

The Bank has an agreement to purchase two full service banking facilities with total deposits and loans of approximately $50.0 million and $27.8 million, respectively. In addition, the Bank has an agreement to sell two of its full service banking facilities with total deposits and loans of $14.8 million and $9.5 million, respectively. Both transactions have been approved by the Bank's regulators and are expected to be completed in the first quarter of the fiscal year ending June 30, 200l.


38





SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

NOTE 18: Condensed Parent Company Only Financial Statements

The following condensed statements of financial condition and condensed statements of income and cash flows for Southern Missouri Bancorp, Inc. should be read in conjunction with the consolidated financial statements and the notes thereto.


STATEMENTS OF FINANCIAL CONDITION

	At June 30,
Assets	2000	1999
Cash	$ 167,503	508,585
Investment securities - available for sale	-	1,048,701
ESOP note receivable	362,060	437,241
Accrued interest receivable	16	28,787
Other assets	111,404	121,063
Equity in net assets of the Bank	20,852,378	20,523,068
Total assets	$21,493,361 ========	22,667,445 =========
Liabilities and Stockholders' Equity
Accrued expenses and other liabilities	$ 36,774	37,983
Total liabilities	36,774	37,983
Stockholders' equity	21,456,587	22,629,462
Total liabilities and stockholders' equity	$21,493,361 =======	22,667,445 =======

39






SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


STATEMENTS OF INCOME

	Year Ended June 30,
	2000	1999	1998
Interest income	$ 90,226	116,423	279,740
Dividend from Bank	800,000	2,300,000	1,447,206
Other income	22,376	-	-
	912,602	2,416,423	1,726,946
Operating expenses	189,963	193,937	202,714
Income before income taxes and equity in    undistributed income of the Bank	722,639	2,222,486	1,524,232
Income taxes	(34,037)	(44,017)	7,500
Income before equity in undistributed    income of the Bank	756,676	2,266,503	1,516,732
Equity in undistributed income of the Bank	563,493	(621,739)	(452,269)
Net income	$ 1,320,169 ========	1,644,764 ========	1,064,463 ========

40




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998


STATEMENTS OF CASH FLOWS

	Year Ended June 30,
	2000	1999	1998
Cash flows from operating activities:
Net income	$ 1,320,169	1,644,764	1,064,463
Adjustments to reconcile net income    to net cash provided by operating    activities:
Equity in undistributed income    of the Bank	(563,493)	621,739	452,269
Other adjustments, net	60,171	57,835	41,320
Net cash provided by      operating activities	816,847	2,324,338	1,558,052
Cash flows from investing activities:
Principal collected on loan to ESOP	75,181	72,873	204,046
Proceeds from sales and maturities          of investment securities, available          for sale	1,034,500	999,375	1,625,000
Net cash provided by      investing activities	1,109,681	1,072,248	1,829,046
Cash flows from financing activities:
Dividends on common stock	(640,700)	(657,007)	(769,485)
Exercise of stock options	135,620	306,310	178,120
Payments to acquire treasury stock	(1,762,530)	(2,803,903)	(3,314,645)
Net cash used in      financing activities	(2,267,610)	(3,154,600)	(3,906,010)
Net increase (decrease) in cash and    cash equivalents	(341,082)	241,986	(518,912)
Cash and cash equivalents at beginning of period	508,585	266,599	785,511
Cash and cash equivalents at end of period	$ 167,503 ========	508,585 ========	266,599 ========

41




SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000, 1999 AND 1998

NOTE 19: Quarterly Financial Data (Unaudited)

Quarterly operating data for the years ended June 30 is summarized as follows (in thousands):

2000:	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Interest income	$ 2,923	2,955	3,133	3,279
Interest expense	1,570	1,621	1,785	1,943
Net interest income	1,353	1,334	1,348	1,336
Provision for loan losses	20	15	15	165
Noninterest income	98	128	129	213
Noninterest expense	814	910	925	1,065
Income before income taxes	617	537	537	319
Income taxes	216	177	185	112
Net income	$ 401 ======	360 ======	352 ======	207 ======
1999:	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Interest income	$ 2,827	2,837	2,783	2,967
Interest expense	1,542	1,591	1,533	1,581
Net interest income	1,285	1,246	1,250	1,386
Provision for loan losses	10	15	10	200
Noninterest income	158	195	250	652
Noninterest expense	881	912	998	891
Income before income taxes	552	514	492	947
Income taxes	195	176	163	326
Net income	$ 357 ======	338 ======	329 ======	621 ======

42




DIRECTORS AND OFFICERS

SOUTHERN MISSOURI BANCORP, INC.	SOUTHERN MISSOURI BANK AND TRUST
DIRECTORS:	DIRECTORS:
Thadis R. Seifert	Samuel H. Smith
Chairman of the Board	Chairman of the Board
President	Engineer and majority owner of
Retired former executive vice president	S.H. Smith and Company, Inc.
of Bank
	James W. Tatum
Leonard M. Ehlers	Vice-Chairman
Vice-Chairman	Retired certified public accountant
Retired court reporter of the 36th
Judicial Circuit	Thadis R. Seifert
	Retired former executive vice president
Donald R. Crandell	of Bank
Retired former president and
chief executive officer of Bank
	Ronnie D. Black
Samuel H. Smith	Executive Director General Association
Engineer and majority owner of	of General Baptists
S.H. Smith and Company, Inc.
	L. Douglas Bagby
James W. Tatum	General Manager Municipal Utilities of
Retired certified public accountant	City of Poplar Bluff
Ronnie D. Black	Sammy A. Schalk
Executive Director General Association	President of Gamblin Lumber Company
of General Baptist
	Greg A. Steffens
L. Douglas Bagby	President
General Manager Municipal Utilities of	Chief Executive Officer
City of Poplar Bluff	Chief Financial Officer
EXECUTIVE OFFICERS:	EXECUTIVE OFFICERS:
Thadis R. Seifert	Greg A. Steffens
President	President
	Chief Executive Officer
Greg A. Steffens	Chief Financial Officer
Chief Financial Officer
	James D. Duncan
James W. Tatum	Executive Vice President
Vice President	Chairman Loan Department

43




CORPORATE INFORMATION

CORPORATE HEADQUARTERS	TRANSFER AGENT
531 Vine Street	Registrar and Transfer Company
Poplar Bluff, Missouri 63901	10 Commerce Drive
	Cranford, New Jersey 07016
INDEPENDENT AUDITORS	COMMON STOCK
Kraft, Miles & Tatum, LLC	Nasdaq Stock Market
Poplar Bluff, Missouri 63901	Nasdaq Symbol: SMBC
SPECIAL COUNSEL
Silver, Freedman & Taff, L.L.P.
Washington, D.C.

ANNUAL MEETING

The Annual Meeting of Stockholders will be held Monday, October 16, 2000, at 9:00 a.m., Central Time, at the Greater Poplar Bluff Area Chamber of Commerce Building, 1111 West Pine, Poplar Bluff, Missouri 63901.


ANNUAL REPORT ON FORM 10-KSB AND OTHER REPORTS

A copy of the Company's annual report on Form 10-KSB, including financial statement schedules and our quarterly reports as filed with the Securities and Exchange Commission, will be furnished without charge to stockholders as of the record date upon written request to the Secretary, Southern Missouri Bancorp, Inc., 531 Vine Street, Poplar Bluff, Missouri 63901. These documents also may be accessed through the SEC's website at "www.sec.gov".













44

EX-21

EXHIBIT 21

Subsidiaries of the Registrant

Parent
Southern Missouri Bancorp, Inc.
Subsidiaries (a)	Percentage of Ownership	Jurisdiction or State of Incorporation
Southern Missouri Bank and Trust Co.	100%	Missouri
SMS Financial Services, Inc. (b)	100%	Missouri

___________________________
(a)   The operation of the Company's wholly owned subsidiaries are included
        in the Company's Financial Statements contained in Item 7 hereof.

(b)   Wholly-owned subsidiary of Southern Missouri Bank and Trust Co.

EX-23

EXHIBIT 23

Consent of Auditors

KRAFT, MILES & TATUM, LLC
CERTIFIED PUBLIC ACCOUNTANTS
________________________________________________________________ 1630 WEST HARPER, POPLAR BLUFF, MISSOURI 63901-4196 (573) 785-6438 FAX (573) 785-0114

Consent of Independent Accountants

We have issued our report dated July 19, 2000, accompanying the Consolidated Financial Statements incorporated by reference in the Annual Report of Southern Missouri Bancorp, Inc. on Form 10-KSB for the year ending June 30, 2000. We hereby consent to the incorporation of reference of said reports in the Registration Statement of Southern Missouri Bancorp, Inc. on the Form S-8 (File No. 333-2320, effective March 13, 1996.)


/s/ Kraft, Miles & Tatum, LLC
Kraft, Miles & Tatum, LLC
Poplar Bluff, Missouri
September 27, 2000

EX-11

EXHIBIT 11

Statement Regarding Computation of Per Share Earnings

SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS

	Year Ended June 30,
	2000	1999	1998
	(Dollars in thousands)
Basic
Average shares outstanding	1,277,562 ========	1,334,299 ========	1,532,910 ========
Net income	$1,320,169 ========	$1,644,764 ========	$1,064,463 ========
Basic earnings per share	$         1.03 ========	$         1.23 ========	$         0.69 ========
Diluted
Average shares outstanding	1,277,562	1,334,299	1,532,910
Net effect of dilutive stock options -       based on the treasury stock method using the       period end market price, if greater than       average market price	13,496	31,793	51,563
Total	1,291,058	1,366,092	1,584,473
Net income	$1,320,169 ========	$1,644,764 ========	$1,064,463 ========
Diluted earnings per share	$         1.02 ========	$         1.20 ========	$         0.67 ========

10KSB

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________

FORM 10-KSB

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2000 OR

[    ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934

Commission File Number: 0-23406


SOUTHERN MISSOURI BANCORP, INC. (Exact name of registrant as specified in its charter)

      Missouri                                                                                                                            43-1665523
(State or other jurisdiction of incorporation                                                                          (I.R.S. Employer
      or organization)                                                                                                               Identification No.)


531 Vine Street, Poplar Bluff, Missouri                                                              63901 (Address of principal executive offices)                                                              (Zip Code)

Registrant's telephone number, including area code:       (573) 785-1421

Securities registered pursuant to Section 12(b) of the Act:	None
Securities registered pursuant to Section 12(g)of the Act:	Common Stock, par value $0.01 per share
	(Title of Class)

       Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES    x         NO      

       Indicate by check mark whether disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or other information statements incorporated by reference in Part III of this Form 10-KSB or any amendments to this Form 10-KSB. ____

       The registrant's revenues for the fiscal year ended June 30, 2000 were $12.9 million.

       As of September 15, 2000, there were issued and outstanding 1,261,003 shares of the registrant's common stock. The aggregate market value of the voting stock held by non-affiliates of the registrant on this date, computed by reference to the average of the bid and asked price of such stock, was $13.8 million (1,072,154 shares at $12.875). (The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the registrant that such person is an affiliate of the registrant.)

DOCUMENTS INCORPORATED BY REFERENCE
       Part II of Form 10-KSB- Annual Report to Stockholders for the fiscal year ended June 30, 2000.

       Part III of Form 10-KSB - Portions of the Proxy Statement for the 2000 Annual Meeting of Stockholders.

       Transitional Small Business Disclosure Format (check one) Yes ____ No     X   




PART I

Item 1. Description of Business
General

             Southern Missouri Bancorp, Inc. ("Company"), which changed its state of incorporation to Missouri on April 1, 1999, was originally incorporated in Delaware on December 30, 1993 for the purpose of becoming the holding company for Southern Missouri Savings Bank ("SMSB") upon completion of its conversion from a state chartered mutual to a state chartered stock savings bank ("Conversion"). The Company completed the Conversion on April 13, 1994 through the sale and issuance of 1,803,201 shares of common stock. The Company's Common Stock is quoted on the National Association of Securities Dealers Automated Quotations ("NASDAQ") National Market System under the symbol "SMBC".

             SMSB was chartered as a mutual Missouri savings and loan association in 1887 and became a stock company in April, 1994. On June 20, 1995, it converted to a federally chartered stock savings bank and took the name Southern Missouri Savings Bank, FSB. On February 17, 1998, SMSB converted from a federally chartered stock savings bank to a Missouri chartered stock savings bank and changed its name to Southern Missouri Bank and Trust Co. ("Bank") and ("Charter Conversion").

             As a result of the Charter Conversion, the primary regulator of the Bank changed from the Office of Thrift Supervision ("OTS") to the Missouri Division of Finance ("Division"). The Bank's deposits continue to be insured up to applicable limits by the Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"). Notwithstanding the Bank's conversion to a state savings bank, the Company did not become a bank holding company regulated by the Federal Reserve Board ("FRB"), but remained an OTS-regulated savings and loan holding company as a result of the Bank's election (under Section 10(l) of the Home Owners Loan Act, as amended ("HOLA")) to be treated as an OTS-regulated savings association for purposes of regulation of the Company ("10(l) Election").

             The principal business of the Bank consists primarily of attracting retail deposits from the general public and using such deposits along with wholesale funding from the Federal Home Loan Bank of Des Moines ("FHLB") to invest primarily in one- to four-family residential mortgage loans. To a lesser extent, the Bank also finances mortgage loans secured by commercial real estate, and originates commercial business loans and consumer loans. These funds are also used to purchase mortgage-backed and related securities ("MBS"), obligations of state and political subdivisions, U.S. Government Agency obligations and other permissible investments.

             During fiscal 2000, the Bank entered into an agreement to purchase two full service banking facilities with total deposits and loans of approximately $50.0 million and $27.8 million, respectively. The Bank also entered into an agreement to sell two of its full service banking facilities with total deposits and loans of $14.8 million and $9.5 million, respectively. Both transactions were approved by the Bank's regulators and will be completed during the first quarter of fiscal 200l.

             At June 30, 2000, the Company had total assets of $184.4 million, total deposits of $123.9 million and stockholders' equity of $21.5 million. The Company has not engaged in any significant activity other than holding the stock of the Bank. Accordingly, the information set forth in this report, including financial statements and related data, relates primarily to the Bank and its subsidiaries. Additionally, the Company's revenues are derived principally from interest earned on loans, investment securities and MBS and, to a lesser extent, banking service charges, loan late charges and other fee income.

Forward Looking Statements

             When used in this Form 10-KSB or future filings by the Company with the Securities and Exchange Commission, in the Company's press releases or other public or shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "would be", "will allow", "intends to", "will likely result", "are expected to", "will continue", "is anticipated", "estimate", "project", or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.



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             The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and to advise readers that various factors, including regional and national economic conditions, substantial changes in levels of market interest rates, credit and other risks of lending and investment activities and competitive and regulatory factors, could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from those anticipated or projected.

             The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

Market Area

             The Bank provides its customers with a full array of community banking services and conducts its business from its headquarters in Poplar Bluff and seven additional full service offices located in Poplar Bluff, Van Buren, Dexter, Malden, Kennett, Doniphan and Ellington, Missouri. The Bank's primary market area includes all or portions of Butler, Carter, Dunklin, Ripley, Stoddard, and Wayne Counties, with Poplar Bluff being the economic center of the area. The Bank's market area has a population of approximately 175,000. The largest employer in the Bank's primary market area is Briggs & Stratton, who operates a small engine manufacturing facility and employs approximately 1,000 persons. Other major employers include Gates Rubber, Rowe Furniture, Lucy Lee Hospital, John Pershing VA Hospital, Doctors Regional Hospital, Poplar Bluff School District, and Arvin. The Bank's market area is primarily rural in nature and relies heavily on agriculture, with products including livestock, rice, timber, soybeans, wheat, melons, corn and cotton.

Selected Consolidated Financial Information

             This information is incorporated by reference from pages 3 and 4 of the 2000 Annual Report to Stockholders attached hereto as Exhibit 13 ("Annual Report") .

Yields Earned and Rates Paid

             This information contained under the section captioned "Yields Earned and Rates Paid" is incorporated herein by reference from page 12 of the Annual Report.

Rate/Volume Analysis

             This information is incorporated by reference from page 13 of the Annual Report.

Average Balance, Interest and Average Yields and Rates

             This information contained under the section captioned "Average Balance, Interest and Average Yields and Rates" is incorporated herein by reference from page 10 and 11 of the Annual Report.

Lending Activities

            General. The Bank's primary focus in lending activities is on the origination of loans secured by mortgages on one- to four-family residences. To a lesser extent, the Bank also originates mortgage loans on commercial real estate, construction loans on residential and commercial properties, commercial business loans and consumer loans. The Bank has also occasionally purchased a limited amount of loan participation interests originated by other lenders within the Bank's market area and secured by properties generally located in the Bank's primary market area.


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             Supervision of the loan portfolio is the responsibility of James W. Duncan, Executive Vice President and Chairman of the Loan Department. Loan officers have varying amounts of lending authority depending upon experience and types of loans. Loans beyond their authority are presented to the Officers Loan Committee, comprised of President Steffens and Loan Chairman Duncan, along with various appointed loan officers. All loans are subject to ratification by the full Board of Directors. Loans to a borrower, in aggregate, in excess of $250,000 require the approval of a majority of the Discount Committee, prior to the closing of the loan. The Loan and Discount Committees consist of all of the directors of the Bank. In addition, foreclosure actions or the acceptance of deeds in lieu of foreclosure are subject to prior approval by the Board of Directors.

             The aggregate amount of loans that the Bank is permitted to make under applicable federal regulations to any one borrower, including related entities, or the aggregate amount that the Bank could have invested in any one real estate project, is based on the Bank's capital levels. See "Regulation - Loans to One Borrower." At June 30, 2000, the maximum amount which the Bank could lend to any one borrower and the borrower's related entities was approximately $4.4 million. At June 30, 2000, the Bank's two largest extensions of credit to one entity were $4.3 million and $4.0 million, respectively. Both of these credits were secured primarily by commercial real estate and were performing according to their terms.





























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Loan Portfolio Analysis.The following table sets forth the composition of the Bank's loan portfolio by type of loan and type of security as of the dates indicated.

	At June 30,
	2000		1999		1998
	Amount	Percent	Amount	Percent	Amount	Percent
	(Dollars in thousands)
Type of Loan:
Mortgage Loans:
One-to four-family	$ 94,748	68.45%	$ 87,247	73.78%	$83,399	70.03%
Commercial real estate	23,303	16.83	19,048	16.11	22,530	18.92
Construction	5,704	4.12	3,553	3.00	2,708	2.27
Total mortgage loans	$123,755	89.40	$109,848	92.89	$108,637	91.22
Other Loans:
Automobile loans	6,263	4.52	5,808	4.91	7,319	6.15
Second mortgage	1,279	0.92	1,109	0.94	1,081	0.91
Mobile home	335	0.24	548	0.47	784	0.65
Loans secured by deposits	825	0.60	826	0.70	671	0.57
Commercial business	7,350	5.31	1,481	1.25	1,127	0.95
Other	952	0.69	1,169	0.99	1,480	1.24
Total other loans	17,004	12.28	10,941	9.26	12,462	10.47
Total loans	$140,759	101.68	$120,789	102.15	$121,099	101.69
Less:
Undisbursed loans in process	$ 1,021	(0.73)	$ 1,296	(1.10)	$ 653	(0.54)
Deferred fees and discounts	36	(0.03)	53	(0.04)	68	(0.06)
Allowance for loan losses	1,277	(0.92)	1,191	(1.01)	1,295	(1.09)
Net loans receivable	$138,425 ======	100.00% ======	$118,249 ======	100.00% ======	$119,083 ======	100.00% ======
Type of Security:
Residential real estate
One-to four-family	$ 94,761	68.45%	$ 88,726	75.03%	$ 82,874	69.59%
Multi-family	3,100	2.24	2,076	1.76	3,134	2.63
Commercial real estate	22,237	16.06	17,753	15.01	20,865	17.52
Land	3,657	2.64	1,294	1.09	1,764	1.48
Savings accounts	825	0.60	826	0.70	671	0.57
Commercial	7,350	5.31	1,481	1.26	1,127	0.95
Consumer and other	8,829	6.38	8,633	7.30	10,664	8.95
Total loans	$140,759	101.68	$120,789	102.15	$121,099	101.69
Less:
Undisbursed loans in process	$1,021	(0.73)	$ 1,296	(1.10)	$ 653	(0.54)
Deferred fees and discounts	36	(0.03)	53	(0.04)	68	(0.06)
Allowance for loan losses	1,277	(0.92)	1,191	(1.01)	1,295	(1.09)
Net loans receivable	$138,425 ======	100.00% ======	$118,249 ======	100.00% ======	$119,083 ======	100.00% ======

             One- to Four-Family Residential Mortgage Lending. The Bank focuses its lending efforts primarily on originating loans for the acquisition or refinance of one- to four-family residences. These loans are originated as a result of customer and real estate agent referrals, existing and walk-in customers and from responses to the Bank's marketing campaigns. At June 30, 2000, net mortgage loans secured by one- to four-family residences totaled $94.7 million, or 68.5% of net loans receivable.


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             The Bank currently offers both fixed-rate and adjustable-rate mortgage ("ARM") loans. During the year ended June 30, 2000, the Bank originated $8.9 million of ARM loans and $15.3 million of fixed-rate real estate loans which were secured by one- to four-family residences. Substantially all of the one- to four-family residential mortgage originations in the Bank's portfolio are located within the Bank's primary market area.

             The Bank currently originates one- to four-family residential mortgage loans in amounts up to 90% of the lower of the purchase price or appraised value of residential property. Loans originated in excess of 80% do not require private mortgage insurance. The majority of new residential mortgage loans originated by the Bank conform to secondary market standards. The interest rates charged on these loans are competitively priced based on local market conditions, the availability of funding, and anticipated profit margins. Fixed and ARM loans originated by the Bank are amortized over periods as long as 30 years.

             The Bank currently originates ARM loans, which adjust annually, after an initial period of one, three or five years. Typically, originated ARM loans are secured by owner occupied properties which reprice at a margin of 2.75% over the monthly average yield on United States Treasury securities adjusted to a constant maturity of one year ("CMT"). Generally, ARM loans secured by non-owner occupied residential properties reprice at a margin of 3.00% to 3.75% over the CMT index. Current residential ARM loan originations are subject to annual and lifetime interest rate caps. Additionally, in order to entice customers into an ARM, or better meet customer needs, the Bank offers ARMs with initial rates below those which would prevail under the foregoing computations, based on market factors, funding costs and the rates and terms for similar loans offered by the Bank's competitors. As a consequence of using interest rate caps, discounted initial rates and a "CMT" or "lagging" loan index, the interest earned on the Bank's ARMs will react differently to changing interest rates than the Bank's cost of funds.

             Historically, most of the owner occupied residential loans originated by the Bank repriced annually at a margin of 2.50% or 2.75% over the 11th district cost of funds index or the Bank's internal cost of funds, while non-owner occupied residential loans typically repriced at a margin of 3.00% to 3.75% over these same indices. The maximum annual interest rate adjustment on these ARMs was typically limited to a 1.00% to 2.00% adjustment, while the maximum lifetime adjustment was generally limited to 5.00% to 6.00%. Generally, each of these indices are considered a "lagging" index because they adjust more slowly to changes in market interest rates than most other indices. At June 30, 2000, loans tied to these indices totaled $41.8 million.

             In underwriting one- to four-family residential real estate loans, the Bank evaluates the borrower's ability to meet debt service requirements at current as well as fully indexed rates for ARM loans, as well as the value of the property securing the loan. During 2000, most properties securing real estate loans made by the Bank had appraisals performed on them by independent fee appraisers approved and qualified by the Board of Directors. The Bank generally requires borrowers to obtain title insurance and fire, property and flood insurance (if indicated) in an amount not less than the amount of the loan. Real estate loans originated by the Bank generally contain a "due on sale" clause allowing the Bank to declare the unpaid principal balance due and payable upon the sale of the security property.

             Commercial Real Estate Lending. The Bank actively originates loans secured by commercial real estate ("CRE") including multi-family dwellings, land (improved and unimproved), strip shopping centers, retail establishments and other businesses generally located in the Bank's primary market area. At June 30, 2000, the Bank had $23.3 million in CRE, which represented 16.8% of net loans receivable.

             CRE loans originated by the Bank generally are based on amortization schedules of up to 25 years with monthly principal and interest payments. Generally, the interest rate received on these loans adjusts annually based upon the New York prime rate, the one year CMT, the 11^th district cost of funds or the Bank's adjustment caps. Current CRE originations typically adjust based on the New York prime rate. Generally, CRE loans do not exceed 75% of the lower of the appraised value or purchase price of the secured property. Before credit is extended, the Bank analyzes the financial condition of the borrower, the borrower's credit history, and the reliability and predictability of the cash flow generated by the property and the value of the property itself. Currently, personal guaranties are required from the borrower in addition to the secured property as collateral for such loans as well as the submission of updated financial information on the subject property and the guarantor on at least an annual basis. The Bank also generally requires appraisals on properties securing CRE to be performed by a Board-approved independent certified fee appraiser.


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             Generally, loans secured by CRE involve a greater degree of credit risk than one- to four-family residential mortgage loans. These loans typically involve large balances to single borrowers or groups of related borrowers. Because payments on loans secured by CRE are often dependent on the successful operation or management of the secured property, repayment of such loans may be subject to adverse conditions in the real estate market or the economy. If the cash flow from the project securing the Bank's loan is reduced (for example, if leases are not obtained or renewed), the borrower's ability to repay the loan may be impaired. See "Asset Quality."

             Construction Lending. The Bank originates real estate loans secured by property or land that is under construction or development. At June 30, 2000, the Bank had $5.7 million, or 4.1% of net loans receivable in construction loans outstanding.

             Construction loans originated by the Bank are generally secured by permanent mortgage loans for the construction of owner occupied residential real estate or to finance speculative construction secured by residential real estate, land development or owner-operated commercial real estate. At June 30, 2000, the Bank had $3.1 million in outstanding construction loans secured by residential real estate and $2.6 million in other speculative construction loans secured by land or commercial real estate. During construction, these loans typically require monthly interest-only payments and have maturities ranging from 6 to 12 months. Once construction is completed, permanent construction loans are converted to monthly payments using amortization schedules of up to 30 years on residential and 15-20 years on commercial real estate.

             Speculative construction and land development lending generally affords the Bank an opportunity to receive higher interest rates and fees with shorter terms to maturity than those obtainable from residential lending. Nevertheless, construction and land development lending is generally considered to involve a higher level of credit risk than one- to four-family residential lending due to (i) the concentration of principal among relatively few borrowers and development projects, (ii) the increased difficulty at the time the loan is made of accurately estimating building or development costs and the selling price of the finished product, (iii) the increased difficulty and costs of monitoring and disbursing funds for the loan, (iv) the higher degree of sensitivity to increases in market rates of interest and changes in local economic conditions, and (v) the increased difficulty of working out problem loans. Due in part to these risk factors, the Bank may be required from time to time to modify or extend the terms of some of these types of loans. In an effort to reduce these risks, the application process includes a submission to the Bank of accurate plans, specifications and costs of the project to be constructed. These items are also used as a basis to determine the appraised value of the subject property. Loan amounts are limited to 85% of the lesser of current appraised value and/or the cost of construction.

             Consumer Lending. The Bank offers a variety of secured consumer loans, including automobile, second mortgages, mobile homes and loans secured by deposits. The Bank originates substantially all of its consumer loans in its primary market area. Currently, all consumer loans are originated on a direct basis, where credit is extended directly to the borrower. Usually, consumer loans are originated with fixed rates for terms of up to five years, with the exception of home equity lines of credit, which are variable, tied to prime rate and are for a period of ten years. At June 30, 2000, the Bank's consumer loan portfolio totaled $8.8 million, or 6.4% of net loans receivable.

             Automobile loans represent 64.8% of the Bank's installment loan portfolio at June 30, 2000, and totaled $6.3 million, or 4.5% of net loans receivable. Typically, automobile loans are made for terms of up to 60 months for new vehicles and up to 48 months for used vehicles. Loans secured by automobiles have fixed rates and are generally made in amounts up to 80% of the purchase price of the vehicle.

             During prior periods, the Bank financed mobile homes for customers of a local mobile home dealer. At June 30, 2000, the remaining balance of these loans totaled $335,000. Of these loans, $29,000 were past due more than 90 days while the balance of loans past due 61 to 90 days was $24,000 and 30 to 60 days was $110,000. During fiscal 2000, the Bank charged off $39,000 of mobile home loans, which equaled the recoveries of mobile home loans previously charged off.

             Consumer loan terms vary according to the type and value of collateral, length of contract and creditworthiness of the borrower. The underwriting standards employed for consumer loans include employment stability, an application, a determination of the applicant's payment history on other debts, and an assessment of ability to meet existing and


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proposed obligations. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the security, if any, in relation to the proposed loan amount.

             Consumer loans may entail greater credit risk than do residential mortgage loans, especially in the case of consumer loans, which are unsecured or are secured by rapidly depreciable or mobile assets, such as automobiles or mobile homes. In the event of repossession or default, there may be no secondary source of repayment or the underlying value of the collateral could be insufficient to repay the loan. In addition, consumer loan collections are dependent on the borrower's continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans. The Bank's delinquency levels for these type of loans are reflective of these risks. See "Asset Classification."

             Commercial Business Lending. At June 30, 2000, the Bank also had $7.4 million in commercial business loans outstanding, or 5.3% of net loans receivable. The Bank's commercial business lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory and equipment.

             Commercial business loan terms vary according to the type and value of collateral, length of contract and creditworthiness of the borrower. Generally, commercial loans secured by fixed assets are amortized over periods up to five years, while commercial operating lines of credit are generally for one year periods and mature approximately 90-120 days following the borrower's fiscal year end. The Bank's commercial business loans are evaluated based on the loan application, a determination of the applicant's payment history on other debts, business stability and an assessment of ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the security, if any, in relation to the proposed loan amount.

             Unlike residential mortgage loans, which generally are made on the basis of the borrower's ability to make repayment from his or her employment and other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans are of higher risk and typically are made on the basis of the borrower's ability to make repayment from the cash flow of the borrower's business. As a result, the availability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself. Further, the collateral securing the loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.

Loan Maturity and Repricing

             The following table sets forth certain information at June 30, 2000 regarding the dollar amount of loans maturing or repricing in the Bank's portfolio based on their contractual terms to maturity or repricing, but does not include scheduled payments or potential prepayments. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less. Mortgage loans, which have adjustable rates, are shown as maturing at their next repricing date. Listed loan balances are shown before deductions for undisbursed loan proceeds, unearned discounts, unearned income and allowance for loan losses.

	Within One Year	After One Year Through 3 Years	After 3 Years Through 5 Years	After 5 Years Through 10 Years	After 10 Years	Total
	(Dollars in thousands)
One-to four-family	$51,346	$ 4,853	$3,765	$2,485	$32,299	$ 94,748
Commercial real estate	18,335	2,910	1,161	386	511	23,303
Construction	5,704	---	---	---	---	5,704
Consumer	2,696	3,045	3,488	425	---	9,654
Commercial business	4,763	1,505	1,082	---	---	7,350
Total loan	$82,844	$12,313	$9,496	$3,296	$32,810	$140,759

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            The following table sets forth the dollar amount of all loans due one year after June 30, 2000, which have fixed interest rates and which have adjustable interest rates.

	Fixed Rates	Adjustable Rates
	(Dollars in thousands)
One-to four-family	$37,356	$ 6,547
Commercial real estate	2,354	3,521
Construction	---	---
Consumer	5,834	253
Commercial business	2,050	---
Total	$47,594 ======	$10,321 ======

             The following table sets forth scheduled contractual amortization of loans at June 30, 2000 and June 30, 1999, and the dollar amount of loans at the date which are scheduled to mature within or after one year which have fixed or adjustable interest rates. Demand loans, loans having no stated schedule of repayments and no stated maturity and overdraft loans are reported as due in one year or less.

	At June 30, 2000				At June 30, 1999
	Mortgage Loans	Consumer Loans	Commercial Business Loans	Total Loans	Mortgage Loans	Consumer Loans	Commercial Business Loans	Total Loans
	(Dollars in thousands)
Amounts due:
Within one year	$ 75,385	$2,696	$4,763	$82,844	$ 77,630	$3,323	$1,025	$81,978
After one year        through three years	7,763	3,045	1,505	12,313	4,960	2,974	204	8,138
After three years        through five years	4,926	3,488	1,082	9,496	2,938	2,970	252	6,160
After five years	35,681	425	---	36,106	24,320	193	---	24,513
Total	$123,755 =====	$9,654 =====	$7,350 =====	$140,759 =====	$109,848 =====	$9,460 =====	$1,481 =====	$120,789 =====
Interest rate terms on        amounts due after one year:
Fixed	$ 39,710	$5,834	$2,050	$47,594	$28,266	$6,097	$ 456	$34,819
Adjustable	10,068	253	---	10,321	3,952	40	---	3,992

Originations, Purchases and Servicing of Loans and Mortgage-Backed Securities

             Generally, real estate loans are originated by the Bank's staff of salaried loan officers. Loan applications are taken and processed at each of the Bank's full-service locations. The Bank has not participated in the secondary market and does not service any loans for other entities. However, the Bank is now originating loans saleable in the secondary market if the policy should change.

             While the Bank originates both adjustable-rate and fixed-rate loans, the ability to originate loans is dependent upon the relative customer demand for loans in its market. In fiscal 2000, the Bank originated $57.4 million of loans, compared to $50.5 million and $48.5 million in fiscal 1999 and 1998, respectively. Of these loans, mortgage loans originated were $39.7 million, $38.0 million and $33.0 million in fiscal 2000, 1999 and 1998, respective.


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             From time to time, the Bank has purchased loan participations consistent with its loan underwriting standards. In fiscal 2000, the Bank did not purchase any new loans. At June 30, 2000, loan participations totaled $1.7 million, or 1.2% of net loans receivable. All of these participations were secured by properties located in Missouri. At June 30, 2000, all of such participations were performing in accordance to their respective terms. The Bank will evaluate purchasing additional loan participations, based in part on local loan demand and portfolio growth.

             In addition, the Bank has purchased MBS to complement lending activities and provide balance sheet flexibility for liquidity and asset/liability management. The Board believes that the lower yield carried by MBS is somewhat offset by the lower level of credit risk and the lower level of overhead required in connection with these assets, as compared to one- to four-family, commercial real estate, multi-family and other types of loans. See "- Mortgage-Backed Securities."

             The following table shows total mortgage loans originated, purchased, sold and repaid during the periods indicated.

	Year Ended June 30,
	2000	1999	1998
	(Dollars in thousands)
Total mortgage loans at beginning of period	$109,848	$108,637	$100,010
Loans originated:
One-to four-family residential	24,191	27,839	20,687
Multi-family residential and             commercial real estate	8,441	5,878	9,736
Construction loans	7,049	4,253	2,540
Total loans originated	39,681	37,970	32,963
Loans purchased:
Total loans purchased	---	---	171
Loans sold:
Total loans sold	---	---	---
Mortgage loan principal repayments	(25,349)	(36,364)	(24,391)
Foreclosures	(425)	(395)	(116)
Net loan activity	13,907	1,211	8,627
Total mortgage loans at end of period	$123,755 ======	$109,848 ======	$108,637 ======

Asset Quality

             Delinquent Loans. Generally, when a borrower fails to make a required payment on mortgage or installment loans the Bank begins the collection process by mailing a computer generated notice to the customer. If the delinquency is not cured promptly, the customer is contacted again by notice or telephone. After an account secured by real estate becomes over 60 days past due, the Bank will send a 30-day demand notice to the customer which, if not cured or unless satisfactory arrangements have been made, will lead to foreclosure. For consumer loans, the Missouri Right-To-Cure Statute is followed, which requires issuance of specifically worded notices at specific time intervals prior to repossession or further collection efforts.


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             The following table sets forth the Bank's loan delinquencies by type and by amount at June 30, 2000.

	Loans Delinquent For:
	60-89 Days		90 Days and Over		Total Loans Delinquent 60 Days or More
	Numbers	Amounts	Numbers	Amounts	Number	Amounts
	(Dollars in thousands)
One-to four-family	6	$152	3	$ 58	9	$210
Commercial non-real estate	1	26	3	169	4	195
Commercial real estate	1	25	2	185	3	210
Mobile home	5	24	4	29	9	53
Consumer	10	76	8	81	18	157
Totals	23 ====	$303 ====	20 ====	$522 ====	43 ====	$825 ====

            Non-Performing Assets. The table below sets forth the amounts and categories of non-performing assets in the Bank's loan portfolio. Loans are placed on non-accrual status when the collection of principal and/or interest become doubtful, and as a result, previously accrued interest income on the loan is taken out of current income. The Bank has no reserves for uncollected interest and does not accrue interest on non-accrual loans. A loan may be transferred back to accrual status once a satisfactory repayment history has been restored. Foreclosed assets held for sale include assets acquired in settlement of loans and are shown net of reserves.

             At June 30, 2000, the Bank had nineteen loans totaling $537,000 on which interest was not being accrued in accordance with SFAS No. 114. The Bank would have recorded interest income of $51,000, $17,000 and $46,000 on non-accrual loans during the years ended June 30, 2000, 1999 and 1998, respectively, if such loans had been performing during such periods. Interest income of approximately $23,000, $13,000 and $15,000 was recognized on these loans for the years ending June 30, 2000, 1999 and 1998, respectively.














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             The following table sets forth information with respect to the Bank's non-performing assets as of the dates indicated. At the dates indicated, the Bank had no restructured loans within the meaning of SFAS 15.

	At June 30,
	2000	1999	1998	1997	1996
	(Dollars in thousands)
Nonaccruing loans:
One-to four-family	$ 38	$ 35	$182	$ 922	$480
Commercial real estate	185	86	344	279	---
Consumer	145	60	7	179	45
Commercial business	169	---	---	---	21
Total	$ 537	$ 181	$533	$1,380	$546
Loans 90 days past due        accruing interest:
One-to four-family	$ 26	$ 146	$661	$---	$---
Commercial real estate	13	---	3	---	---
Consumer	---	83	140	---	---
Commercial business	---	27	---	---	---
Mobile homes	---	55	---	---	---
Total	$ 39	$ 311	$ 804	$ ---	$ ---
Total nonperforming loans	$ 576	$ 492	$1,337	$1,380	$546
Foreclosed assets held for sale:
Real estate owned	$ 464	$ 478	$ 172	$ 55	$ 60
Other nonperforming assets	52	82	12	---	---
Total nonperforming assets	$1,092 =====	$1,052 =====	$1,521 =====	$1,435 =====	$606 =====
Total nonperforming loans       to net loans	0.42%	0.42%	1.12%	1.28%	0.57%
Total nonperforming loans        to net assets	0.31%	0.30%	0.86%	0.86%	0.34%
Total nonperforming assets        to total assets	0.59%	0.64%	0.98%	0.89%	0.38%

             Asset Classification. Applicable regulations require that each insured institution review and classify its assets on a regular basis. In addition, in connection with examinations of insured institutions, regulatory examiners have authority to identify problem assets and, if appropriate, require them to be classified. There are three classifications for problem assets: substandard, doubtful and loss. Substandard assets must have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. When an insured institution classifies problem assets as loss, it charges off the balance of the assets. Assets, which do not currently expose the Bank to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses, may be designated as special mention. The Bank's determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the FDIC and the Division, which can order the establishment of additional loss allowances.


12




             In connection with the filing of its periodic reports with the FDIC and in accordance with its asset classification policy, the Bank regularly reviews its loan portfolio to determine whether any loans require classification in accordance with applicable regulations. On the basis of management's review of the assets of the Company, at June 30, 2000, classified assets totaled $4.0 million, or 2.15% of total assets as compared to $5.1 million, or 3.09% of total assets at June 30, 1999.

             The largest classified commercial real estate relationship at June 30, 2000 totaled $2.6 million and was performing in accordance with its terms. In addition, the Bank had classified two other lending relationships secured primarily by commercial real estate, which in the aggregate totaled $1.3 million. The borrowing relationships were classified due to concerns over whether the property securing the Bank's loans generated sufficient cash flow to amortize the loans in accordance with their terms.

             Other Loans of Concern. In addition to the classified assets discussed above, there was also an aggregate of $1.6 million in net book value of loans five one- to four-family residential loans and 7 CRE loans) with respect to which management has doubts as to the ability of the borrowers to continue to comply with present loan repayment terms which may ultimately result in the classification of such assets.

             Real Estate Owned. Real estate properties acquired through foreclosure or by deed in lieu of foreclosure are recorded at the lower of cost or fair value, less estimated disposition costs. If fair value at the date of foreclosure is lower than the balance of the related loan, the difference will be charged-off to the allowance for loan losses at the time of transfer. Management periodically updates real estate valuations and if the value declines, a specific provision for losses on such property is established by a charge to operations. At June 30, 2000, the Company's balance of real estate owned totaled $464,000 and included thirteen properties secured primarily by real estate lots and one commercial lot. The balance on this commercial lot was $81,000. During fiscal 2000, the Bank began to take more aggressive action on collections.

             Allowance for Loan Losses. The Bank's allowance for loan losses is established through a provision for loan losses based on management's evaluation of the risk inherent in the loan portfolio and changes in the nature and volume of loan activity, including those loans which are being specifically monitored. Such evaluation, which includes a review of loans for which full collectibility may not be reasonably assured, considers among other matters, the estimated fair value of the underlying collateral, economic conditions, historical loan loss experience and other factors that warrant recognition in providing for an adequate provision for loan losses. These provisions for loan losses are charged against earnings in the year they are established. The Bank had an allowance for loan losses at June 30, 2000, of $1.3 million, which represented 117% of nonperforming assets as compared to $1.2 million or 113% of nonperforming assets at June 30, 1999. See Note 3 of Notes to Consolidated Financial Statements contained in the Annual Report, included as Exhibit 13.

             Although management believes that it uses the best information available to determine the allowance, unforeseen market conditions could result in adjustments and net earnings could be significantly affected if circumstances differ substantially from assumptions used in making the final determination. Future additions to the allowance will likely be the result of periodic loan, property and collateral reviews and thus cannot be predicted with certainty in advance.









13





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

	Year Ended June 30,
	2000	1999	1998	1997	1996
		(Dollars in thousands)
Allowance at beginning of period	$1,191	$1,295	$ 706	$627	$572
Recoveries
One-to four-family	1	2	1	---	---
Consumer	71	31	42	---	---
Mobile homes	39	58	89	---	---
Total recoveries	111	91	132	---	---
Charge offs:
One-to four-family	29	28	6	---	---
Commercial real estate	---	10	---	---	---
Consumer	172	286	116	162	5
Mobile homes	39	106	204	---	---
Total charge offs	240	430	326	162	5
Net charge offs	(129)	(339)	(194)	(162)	(5)
Provision for loan losses	215	235	783	241	60
Balance at end of period	$1,277 =====	$1,191 =====	$1,295 =====	$706 =====	$627 =====
Ratio of allowance to total loans    outstanding at the end of the    period	0.91%	0.99%	1.07%	0.64%	0.63%
Ratio of net charge offs to    average loans outstanding    during the period	0.10%	0.29%	0.17%	0.16%	0.01%

14




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

	At June 30,
	2000		1999		1998		1997		1996
	Amount	Percent of Loans In Each Category to Total Loans	Amount	Percent of Loans In Each Category to Total Loans	Amount	Percent of Loans In Each Category to Total Loans	Amount	Percent of Loans In Each Category to Total Loans	Amount	Percent of Loans In Each Category to Total Loans
	(Dollars in thousands)
One-to four-family	$307	67.31%	$ 253	72.23%	$ 372	68.87%	$ 647	70.54%	$562	69.03%
Construction	21	4.05	17	2.94	20	2.24	---	3.46	---	4.32
Commercial real estate	529	16.55	604	15.77	612	18.60	---	16.57	---	16.75
Consumer	142	6.63	123	7.38	126	8.71	59	5.11	65	5.90
Commercial business	223	5.22	33	1.23	17	0.93	---	3.12	---	2.72
Mobile homes	32	0.24	41	0.45	127	0.65	---	1.20	---	1.28
Unallocated	23	N/A	120	N/A	21	N/A	---	N/A	---	N/A
Total allowance for             loan losses	$1,277 =====	100.00% =====	$1,191 =====	100.00% =====	$1,295 =====	100.00% =====	$706 =====	100.00% =====	$627 =====	100.00% =====

15




Investment Activities

             General. Under Missouri law, the Bank is permitted to invest in various types of liquid assets, including U.S. Government and State of Missouri obligations, securities of various federal agencies, certain certificates of deposit of insured banks and savings institutions, banker's acceptances, repurchase agreements, federal funds, commercial paper, investment grade corporate debt securities and obligations of States and their political sub-divisions. Generally, the investment policy of the Company is to invest funds among various categories of investments and repricing characteristics based upon the Company's need for liquidity, to provide collateral for borrowings and public unit deposits, to help reach financial performance targets and to help maintain asset/liability management objectives.

             The Company's investment portfolio is managed in accordance with the Bank's investment policy which was adopted by the Board of Directors of the Bank and is implemented by members of the asset/liability management committee which consists of the President and three outside directors.

             Investment purchases and/or sales must be authorized by the appropriate party, depending on the aggregate size of the investment transaction, prior to any investment transaction. The Board of Directors reviews all investment transactions. Investment purchases are identified as either held-to-maturity ("HTM") or available-for-sale ("AFS") at the time of purchase. Debt securities classified as "HTM" are reported at amortized cost only if the reporting entity has the positive intent and ability to hold these securities to maturity. The Company does not have any investment securities classified as held to maturity at June 30, 2000. Securities classified as "AFS" must be reported at fair value with unrealized gains and losses recorded as a separate component of stockholders' equity. At June 30, 2000, AFS securities totaled $22.0 million (excluding FHLB stock). For information regarding the amortized cost and market values of the Company's investments, see Note 2 of Notes to Consolidated Financial Statements contained in the Annual Report.

             Effective April 1, 1999, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and hedging activities. The statement further requires that all derivatives should be recognized as either assets or liabilities and measured at the fair value. The accounting for changes in the fair value, or gains and losses of a derivative depends on the use or the derivative and resulting designation. Presently, the Company has no derivative instruments and no outstanding hedging activities. Management does not intend to purchase derivative instruments or enter into hedging activities.

             Investment and Other Securities. At June 30, 2000, the Company's investment securities portfolio totaled $23.8 million, or 12.91% of total assets as compared to $22.1 million, or 13.40% of total assets at June 30, 1999. The increase was mostly attributed to $3.5 million in security purchases exceeding $1.4 million in sales and maturities. At June 30, 2000, the investment securities portfolio included $17.7 million in agency bonds, $4.2 million in municipal bonds, $1.7 million of which is subject to early redemption at the option of the issuer, and $1.9 million in FHLB stock. Based on contractual maturities, the weighted average maturity of the investment securities portfolio at June 30, 2000, excluding FHLB stock, was 45 months.

             Mortgage-Backed Securities. At June 30, 2000, MBS totaled $13.0 million, or 7.03%, of total assets as compared to $16.9 million, or 10.25% of total assets at June 30, 1999. During fiscal 2000, the Bank had net sales of $3.4 million in MBS and maturities of $2.2 million, and had purchases of $2.0 million. At June 30, 2000, the MBS portfolio included $2.5 million in adjustable-rate MBS and $10.4 million in collateralized mortgage obligations, which passed the Federal Financial Institutions Examination Council's sensitivity test. Of the $10.4 million in collateralized mortgage obligations, $1.2 million were adjustable rate and $9.2 million were fixed rate.




16




Investment Securities Analysis

             The following table sets forth the Company's investment securities portfolio at carrying value (including securities classified as HTM and securities classified as AFS) at the dates indicated.

	At June 30,
	2000		1999		1998
	Carrying Value (1)	Percent of Portfolio	Carrying Value (1)	Percent of Portfolio	Carrying Value (1)	Percent of Portfolio
	(Dollars in thousands)
U.S. government agencies	$17,746	74.55%	$15,220	68.96%	$ 7,597	50.47%
State and political subdivisions	4,208	17.68	5,759	26.10	6,401	42.53
FHLB stock	1,850	7.77	1,091	4.94	1,054	7.00
Total	$23,804	100.00%	$22,070	100.00%	$15,052	100.00%

____________________
⁽¹⁾ The market value of the Company's investment securities portfolio amounted to $23.8 million, $22.1 million and $15.2 million at June 30, 2000, 1999 and 1998, respectively.


             The following table sets forth the maturities and weighted average yields of the debt securities (classified as AFS) in the Company's investment securities portfolio at June 30, 2000.

	Securities Available for Sale June 30, 2000
	Amortized Cost	Book/ Estimated Market Value	Weighted Average Yield
	(Dollars in thousands)
U.S. government agencies:
Due within 1 year	$ ---	$ ---	---%
Due after 1 year but within 5 years	18,339	17,746	6.25
Due after 5 years but within 10 years	---	---	---
Due after 10 years	---	---	---
State and political subdivisions:
Due within 1 year	345	347	5.07
Due after 1 year but within 5 years	2,862	2,882	5.22
Due after 5 years but within 10 years	940	979	5.88
Total Available for Sale	$22,486 =======	$21,954 =======	6.09% =======

17




       The following table sets forth certain information at June 30, 2000 regarding the dollar amount of MBS in the Bank's portfolio based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments. MBS, which have adjustable rates, are shown at amortized cost as maturing at their next repricing date.

	At June 30, 2000
	(Dollars in thousands)
Amounts due:
Within 1 year	$ 3,802
After 1 year through 3 years	---
After 3 years through 5 years	----
After 5 years	9,623
Total	$13,425

       The following table sets forth the dollar amount of all MBS at amortized cost due one year after June 30, 2000, which have fixed interest rates and have floating or adjustable rates.

	At June 30, 2000
	(Dollars in thousands)
Interest rate terms on amounts due after 1 year:
Fixed	$ 9,623
Adjustable	3,802
Pending	---
Total	$13,425 =====

       The following table sets forth certain information with respect to each security (other than U.S. Government and agency securities), which had an aggregate book value in excess of 10% of the Bank's retained earnings at the dates indicated.

	At June 30,
	2000		1999		1998
	Carrying Value	Market Value	Carrying Value	Market Value	Carrying Value	Market Value
	(Dollars in thousands)
FHLMC certificates	$ ---	$ ---	$ 240	$ 240	$ 1,426	$ 1,426
GNMA certificates	1,937	1,937	4,981	4,981	6,326	6,326
FNMA certificates	586	586	2,107	2,107	3,846	3,846
Collateralized mortgage obligations	10,434	10,434	9,572	9,572	2,556	2,556
Total	$12,957 =====	$12,957 =====	$16,900 =====	$16,900 =====	$14,154 =====	$14,154 =====

Deposit Activities and Other Sources of Funds

             General. The Company's primary sources of funds are deposits, borrowings, payment of principal and interest on loans and MBS, interest and principal received on investment securities and other short-term investments, and funds provided from operating results. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general market interest rates and overall economic conditions.


18




             Borrowings, including FHLB advances, have been used at times to provide additional liquidity. Borrowings are used on an overnight or short-term basis to compensate for periodic fluctuations in cash flows, and are used on a longer term basis to fund loan growth and to help manage the Company's sensitivity to fluctuating interest rates.

             Deposits. The Bank offers a variety of deposit accounts, which have a wide range of interest rates and terms as set forth in the following table. Deposit account terms vary according to the minimum balance required, the time periods funds must remain on deposit and the interest rate, among other factors. Deposits are solicited from the Bank's primary market area and are attracted and retained through competitive pricing, cross-selling, advertisement and providing quality customer service.

             The Bank will periodically promote a particular deposit product as part of the Bank's overall marketing plan. Deposit products have been promoted through various mediums, which include TV, radio, and newspaper advertisements. The emphasis of these campaigns is to increase consumer awareness and market share of the Bank.
























19




The flow of deposits is influenced significantly by general economic conditions, changes in prevailing interest rates, and competition. The Bank has become more susceptible to short-term fluctuations in deposit flows, as customers have become more interest rate conscious. Based on its experience, the Bank believes that its deposits are relatively stable sources of funds. However, the ability of the Bank to attract and maintain certificates of deposit, and the rates paid on these deposits, has been and will continue to be significantly affected by market conditions.

Weighted Average Interest			Minimum		Percentage of Total
Rate	Term	Category	Amount	Balance	Deposits
			(Dollars in thousands)
0.00%	None	Non-interest Bearing	$100	$2,049	1.65%
2.43	None	Now Accounts	100	11,409	9.21
2.50	None	Savings Accounts	25	6,865	5.54
4.19	None	Money Market Deposit Accounts	1,000	13,572	10.95
		Certificate of Deposit
5.20	91-day	Fixed-term/Fixed-rate	500	766	0.62
4.93	91-day	IRA Fixed-term/Fixed-rate	500	3	----
6.00	5 month	Fixed-term/Fixed-rate	500	2,203	1.78
6.21	5 month	IRA Fixed-term/Fixed rate	500	375	0.30
5.11	6 month	Fixed-term/Fixed-rate	500	10,337	8.34
4.90	6 month	IRA Fixed-term/Fixed-rate	500	119	0.10
5.24	9 month	Fixed-term/Fixed-rate	500	8,401	6.78
4.87	9 month	IRA Fixed-term/Fixed-rate	500	3,188	2.57
6.00	11 month	Fixed-term/Fixed-rate	500	20,690	16.70
6.05	11 month	IRA Fixed-term/Fixed-rate	500	2,730	2.20
5.39	12 month	Fixed-term/Fixed-rate	500	19,164	15.47
4.94	12 month	IRA Fixed-term/Fixed-rate	500	739	0.60
5.29	15 month	Fixed-term/Fixed-rate	500	6,164	4.97
5.21	15 month	IRA Fixed-term/Fixed-rate	500	1,695	1.37
5.07	24 month	Fixed-term/Fixed-rate	500	2,540	2.05
5.13	24 month	IRA Fixed-term/Fixed-rate	500	89	0.07
5.57	29 month	Fixed-term/Fixed-rate	500	1,758	1.42
5.30	29 month	IRA Fixed-term/Fixed-rate	500	415	0.33
6.08	30 month	IRA Fixed-term/Fixed-rate	500	345	0.28
5.16	36 month	Fixed-term/Fixed-rate	500	2,004	1.62
5.19	36 month	IRA Fixed-term/Fixed-rate	500	3,598	2.90
5.20	48 month	Fixed-term/Fixed-rate	500	397	0.32
5.15	48 month	IRA Fixed-term/Fixed-rate	500	32	0.03
5.34	60 month	Fixed-term/Fixed-rate	500	2,118	1.71
5.15	60 month	IRA Fixed-term/Fixed-rate	500	89	0.07
8.01	96 month	Fixed-term/Fixed-rate	500	66	0.05
				$123,920 ======	100.00% ======

20




       The following table indicates the amount of the Bank's jumbo certificates of deposit by time remaining until maturity as of June 30, 2000. Jumbo certificates of deposit require minimum deposits of $100,000 and rates paid on such accounts are negotiable.

Maturity Period	Amount
	(Dollars in thousands)
Three months or less	$ 4,754
Over three through six months	7,970
Over six through twelve months	7,157
Over 12 months	627
Total	$20,508 ========

Time Deposits by Rates

             The following table sets forth the time deposits in the Bank classified by rates at the dates indicated.

	At June 30,
	2000	1999	1998
	(Dollars in thousands)
4.00 - 4.99%	$28,951	$59,839	$ 8,850
5.00 - 5.99%	37,008	28,231	74,667
6.00 - 6.99%	23,948	--	120
7.00 - 7.99%	52	26	26
8.00 - 8.99%	66	58	59
9.00 - 9.99%	---	---	19
Total	$90,025 ========	$88,154 ========	$83,741 ========

       The following table sets forth the amount and maturities of all time deposits at June 30, 2000.

	Amount Due
	Less Than One Year	1-2 Years	2-3 Years	3-4 Years	After 4 Years	Total	Percent of Total Certificate Accounts
	(Dollars in thousands)
4.00 - 4.99%	$28,187	$ 764	$ ---	$ ---	$ ---	$28,951	32.16%
5.00 - 5.99%	31,470	3,096	1,339	957	146	37,008	41.11
6.00 - 6.99%	23,190	214	544	---	---	23,948	26.60
7.00 - 7.99%	42	---	4	---	6	52	0.06
8.00 - 8.99%	---	---	57	9	---	66	0.07
Total	$82,889 =======	$4,074 =======	$1,944 =======	$966 =======	$ 152 =======	$90,025 =======	100.00% =======

21



Deposit Flow

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

	At June 30,
	2000			1999			1998
	Amount	Percent of Total	Increase (Decrease)	Amount	Percent of Total	Increase (Decrease)	Amount	Percent of Total	Increase (Decrease)
	(Dollars in thousands)
Noninterest bearing	$ 2,049	1.65%	$ (267)	$ 2,316	1.93%	$ (274)	$ 2,590	2.37%	$1,420
NOW checking	11,409	9.21	2,297	9,112	7.58	1,602	7,510	6.86	(277)
Regular savings accounts	6,865	5.54	(485)	7,350	6.12	31	7,319	6.69	(321)
Money market deposit	13,572	10.95	350	13,222	11.00	4,972	8,250	7.54	(51)
Fixed-rate certificates     which mature(1):
Within one year	82,889	66.89	6,271	76,618	63.77	2,711	73,907	67.55	(11,242)
Within three years	6,018	4.86	(3,752)	9,770	8.13	6,632	3,138	2.87	(4,410)
After three years	1,118	.90	(648)	1,766	1.47	(4,930)	6,696	6.12	5,586
Total	$123,920 ======	100.00% ======	$3,766 ======	$120,154 ======	100.00% ======	$10,744 ======	$109,410 ======	100.00% ======	$(9,295) ======

___________________________
⁽¹⁾ At June 30, 2000, 1999 and 1998, certificates in excess of $100,000 totaled $20.5 million, $15.3 million and $12.0 million, respectively.




22





             The following table sets forth the savings activities of the Bank for the periods indicated.

	At June 30,
	2000	1999	1998
	(Dollars in thousands)
Beginning Balance	$120,154	$109,410	$118,705
Net increase (decrease) before interest credited	(412)	7,058	(12,383)
Interest credited	4,178	3,686	3,088
Net increase (decrease) in savings deposits	3,766	10,744	(9,295)
Ending balance	$123,920 ========	$120,154 ========	$109,410 ========

             In the unlikely event the Bank is liquidated, depositors will be entitled to payment of their deposit accounts prior to any payment being made to the Company as the sole stockholder of the Bank. Substantially all of the Bank's depositors are residents of the State of Missouri.

             Borrowings. As a member of the FHLB of Des Moines, the Bank has the ability to apply for FHLB advances. These advances are available under various credit programs, each of which has its own maturity, interest rate and repricing characteristics. Additionally, FHLB advances have prepayment penalties as well as limitations on size or term. In order to utilize FHLB advances, the Bank must be a member of the FHLB system, have sufficient collateral to secure the requested advance and own stock in the FHLB equal to 5% of the amount borrowed. See "REGULATION - The Bank -- Federal Home Loan Bank System."

             Although deposits are the Bank's primary and preferred source of funds, the Bank actively uses FHLB advances. The Bank's general policy has been to utilize borrowings to meet short-term liquidity needs, or to provide a longer-term source of funding loan growth when other cheaper funding sources are unavailable or to aide in asset/liability management. As of June 30, 2000, $18.0 million of the Bank's $37.0 million in FHLB advances were for original terms of ten years, subject to early redemption by the FHLB after an initial period of one to three years. In order for the Bank to borrow from the FHLB, it has pledged $46.3 million of its residential loans to the FHLB and has purchased $1.9 million in FHLB stock.

             The following table sets forth certain information regarding borrowings by the Bank at the end of and during the periods indicated:

	Year Ended June 30,
	2000	1999	1998
	(Dollars in thousands)
Amount outstanding at year end	$37,000	20,550	21,069
Weighted average rate at year end	6.09%	4.92%	4.97%
Maximum amount of borrowings outstanding     at any month end:
FHLB advances	37,000	21,067	24,576
Approximate average short-term borrowings     outstanding with respect to:
FHLB advances	8,869	126	2,700
Other FHLB long term borrowings	17,836	19,864	16,917
Weighted average rate paid on FHLB advances	5.60%	4.92%	5.41%

23




Subsidiary Activities

             The Bank has one subsidiary, SMS Financial Services, Inc., which has two notes receivable totaling $537,000 from the sale of the insurance agency in May 1999. The activities of the subsidiary are not significant to the financial condition or results of the Bank's operations.

Competition

            The Bank faces strong competition, both in originating loans and in attracting deposits, from a variety of entities which include some companies which are subject to less regulatory oversight or regulation. Major competitors of the Bank include other banks and thrifts, credit unions, pension funds, mortgage bankers and insurance companies. The competitive nature of the industry is unlikely to change as larger percentages of both available deposits and loans are shifted into debt and equity markets. The Bank is one of fifteen financial institution groups located in the Bank's primary market area.

             The Bank attracts its deposits through its branch network, primarily from the communities in which those offices are located; therefore, competition for those deposits is principally from other financial entities located within those same communities. The Bank competes for these deposits by offering a variety of competitively priced products, providing friendly service, offering convenient business hours, and by being an active participant in the success of each of these communities.

REGULATION

The Bank

             General.As a state-chartered, federally insured savings bank, the Bank is subject to extensive regulation. Lending activities and other investments must comply with various statutory and regulatory requirements, including prescribed minimum capital standards. The Bank is regularly examined by the FDIC and the Division and files periodic reports concerning the Bank's activities and financial condition with its regulators. The Bank's relationship with depositors and borrowers also is regulated to a great extent by both federal law and the laws of Missouri, especially in such matters as the ownership of savings accounts and the form and content of mortgage documents.

             Federal and state banking laws and regulations govern all areas of the operation of the Bank, including reserves, loans, mortgages, capital, issuance of securities, payment of dividends and establishment of branches. Federal and state bank regulatory agencies also have the general authority to limit the dividends paid by insured banks and bank holding companies if such payments should be deemed to constitute an unsafe and unsound practice. The respective primary federal regulators of the Company and the Bank have authority to impose penalties, initiate civil and administrative actions and take other steps intended to prevent banks from engaging in unsafe or unsound practices.

             State Regulation and Supervision. As a state-chartered savings bank, the Bank is subject to applicable provisions of Missouri law and the regulations of the Division adopted thereunder. Missouri law and regulations govern the Bank's ability to take deposits and pay interest thereon, to make loans on or invest in residential and other real estate, to make consumer loans, to invest in securities, to offer various banking services to its customers, and to establish branch offices. Under state law, savings banks in Missouri also generally have all of the powers that federal mutual savings banks have under federal laws and regulations. The Bank is subject to periodic examination and reporting requirements by and of the Division.

             Federal Securities Law. The stock of the Company is registered with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, the Company is subject to the information, proxy solicitation, insider trading restrictions and other requirements of the SEC under the Exchange Act.

             The Company's stock held by persons who are affiliates (generally officers, directors and principal stockholders) of the Company may not be resold without registration or unless sold in accordance with certain resale restrictions. If the Company meets specified current public information requirements, each affiliate of the Company is able to sell in the public market, without registration, a limited number of shares in any three-month period.


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             Federal Reserve System. The Federal Reserve Board ("FRB") requires all depository institutions to maintain non-interest bearing reserves at specified levels against their transaction accounts (checking, NOW and Super NOW checking accounts). At June 30, 2000, the Bank was in compliance with these reserve requirements.

             Savings Banks are authorized to borrow from the Federal Reserve Bank "discount window," but FRB regulations require associations to exhaust other reasonable alternative sources of funds, including FHLB borrowings, before borrowing from the FRB.

             Federal Home Loan Bank System. The Bank is a member of the FHLB of Des Moines, which is one of 12 regional FHLBs that administers the home financing credit function of savings associations. Each FHLB serves as a reserve or central bank for its members within its assigned region. It is funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB System. It makes loans to members (i.e., advances) in accordance with policies and procedures established by the board of directors of the FHLB, which are subject to the oversight of the Federal Housing Finance Board. All advances from the FHLB are required to be fully secured by sufficient collateral as determined by the FHLB. In addition, all long-term advances are required to provide funds for residential home financing. As a member, the Bank is required to purchase and maintain stock in the FHLB of Des Moines. At June 30, 2000, the Bank had $1.9 million in FHLB stock, which was in compliance with this requirement. The Bank is paid a quarterly dividend on this stock which averaged 6.57% in 2000.

             Under federal law, the FHLBs are required to provide funds for the resolution of troubled savings associations and to contribute to low- and moderately priced housing programs through direct loans or interest subsidies on advances targeted for community investment and low- and moderate-income housing projects. These contributions have adversely affected the level of FHLB dividends paid and could continue to do so in the future. These contributions could also have an adverse effect on the value of FHLB stock in the future. A reduction in value of the Bank's FHLB stock may result in a corresponding reduction in the Bank's capital.

             Deposit Insurance. The FDIC is an independent federal agency that insures the deposits, up to prescribed statutory limits, of depository institutions. The FDIC currently maintains two separate insurance funds: the Bank Insurance Fund ("BIF") and the SAIF. As insurer of the Bank's deposits, the FDIC has examination, supervisory and enforcement authority over the Bank.

             The Bank's accounts are insured by the SAIF to the maximum extent permitted by law. The Bank pays deposit insurance premiums based on a risk-based assessment system established by the FDIC. Under applicable regulations, institutions are assigned to one of three capital groups that are based solely on the level of an institution's capital -- "well capitalized," "adequately capitalized," and "undercapitalized" -- which are defined in the same manner as the regulations establishing the prompt corrective action system, as discussed below. These three groups are then divided into three subgroups, which reflect varying levels of supervisory concern, from those which are considered to be healthy to those which are considered to be of substantial supervisory concern. The matrix so created results in nine assessment risk classifications, with rates that until September 30, 1996 ranged from 0.23% for well capitalized, financially sound institutions with only a few minor weaknesses to 0.31% for undercapitalized institutions that pose a substantial risk of loss to the SAIF unless effective corrective action is taken.

             Pursuant to the Deposit Insurance Funds Act ("DIF Act"), which was enacted on September 30, 1996, the FDIC imposed a special assessment on each depository institution with SAIF-assessable deposits, which resulted in the SAIF achieving its designated reserve ratio. In connection therewith, the FDIC reduced the assessment schedule for SAIF members, effective January 1, 1997, to a range of 0% to 0.27%, with most institutions, including the Bank, paying 0%. This assessment schedule is the same as that for the BIF, which reached its designated reserve ratio in 1995. In addition, since January 1, 1997, SAIF members are charged an assessment of .065% of SAIF-assessable deposits for the purpose of paying interest on the obligations issued by the Financing Corporation ("FICO") in the 1980s to help fund the thrift industry cleanup. BIF-assessable deposits will be charged an assessment to help pay interest on the FICO bonds at a rate of approximately .013% until the earlier of December 31, 1999 or the date upon which the last savings association ceases to exist, after which time the assessment will be the same for all insured deposits.



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             The DIF Act provides for the merger of the BIF and the SAIF into the Deposit Insurance Fund on January 1, 1999, but only if no insured depository institution is a savings association on that date. The DIF Act contemplates the development of a common charter for all federally chartered depository institutions and the abolition of separate charters for national banks and federal savings associations. It is not known what form the common charter may take and what effect, if any, the adoption of a new charter would have on the operation of the Bank.

             The FDIC may terminate the deposit insurance of any insured depository institution if it determines after a hearing that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order or any condition imposed by an agreement with the FDIC. It also may suspend deposit insurance temporarily during the hearing process for the permanent termination of insurance, if the institution has no tangible capital. If insurance of accounts is terminated, the accounts at the institution at the time of termination, less subsequent withdrawals, shall continue to be insured for a period of six months to two years, as determined by the FDIC. Management is aware of no existing circumstances that could result in termination of the deposit insurance of the Bank.

            Prompt Corrective Action. Under the FDIA, each federal banking agency is required to implement a system of prompt corrective action for institutions that it regulates. The federal banking agencies have promulgated substantially similar regulations to implement this system of prompt corrective action. Under the regulations, an institution shall be deemed to be (i) "well capitalized" if it has a total risk-based capital ratio of 10.0% or more, has a Tier I risk-based capital ratio of 6.0% or more, has a leverage ratio of 5.0% or more and is not subject to specified requirements to meet and maintain a specific capital level for any capital measure; (ii) "adequately capitalized" if it has a total risk-based capital ratio of 8.0% or more, has a Tier I risk-based capital ratio of 4.0% or more, has a leverage ratio of 4.0% or more (3.0% under certain circumstances) and does not meet the definition of "well capitalized;" (iii) "undercapitalized" if it has a total risk-based capital ratio that is less than 8.0%, has a Tier I risk-based capital ratio that is less than 4.0% or has a leverage ratio that is less than 4.0% (3.0% under certain circumstances); (iv) "significantly undercapitalized" if it has a total risk-based capital ratio that is less than 6.0%, has a Tier I risk-based capital ratio that is less than 3.0% or has a leverage ratio that is less than 3.0%; and (v) "critically undercapitalized" if it has a ratio of tangible equity to total assets that is equal to or less than 2.0%.

             A federal banking agency may, after notice and an opportunity for a hearing, reclassify a well capitalized institution as adequately capitalized and may require an adequately capitalized institution or an undercapitalized institution to comply with supervisory actions as if it were in the next lower category if the institution is in an unsafe or unsound condition or has received in its most recent examination, and has not corrected, a less than satisfactory rating for asset quality, management, earnings or liquidity. (The FDIC may not, however, reclassify a significantly undercapitalized institution as critically undercapitalized.)

             An institution generally must file a written capital restoration plan that meets specified requirements, as well as a performance guaranty by each company that controls the institution, with the appropriate federal banking agency within 45 days of the date that the institution receives notice or is deemed to have notice that it is undercapitalized, significantly undercapitalized or critically undercapitalized. Immediately upon becoming undercapitalized, an institution shall become subject to various mandatory and discretionary restrictions on its operations.

             At June 30, 2000, the Bank was categorized as "well capitalized" under the prompt corrective action regulations of the FDIC.

             Standards for Safety and Soundness. The federal banking regulatory agencies have prescribed, by regulation, standards for all insured depository institutions relating to: (i) internal controls, information systems and internal audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure; (v) asset growth; (vi) asset quality; (vii) earnings; and (viii) compensation, fees and benefits ("Guidelines"). The Guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. If the FDIC determines that the Bank fails to meet any standard prescribed by the Guidelines, the agency may require the Bank to submit to the agency an acceptable plan to achieve compliance with the standard. FDIC regulations establish deadlines for the submission and review of such safety and soundness compliance plans.


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             Capital Requirements. The FDIC's minimum capital standards applicable to FDIC-regulated banks and savings banks require the most highly-rated institutions to meet a "Tier 1" leverage capital ratio of at least 3% of total assets. Tier 1 (or "core capital") consists of common stockholders' equity, noncumulative perpetual preferred stock and minority interests in consolidated subsidiaries minus all intangible assets other than limited amounts of purchased mortgage servicing rights and certain other accounting adjustments. All other banks must have a Tier 1 leverage ratio of at least 100-200 basis points above the 3% minimum. The FDIC capital regulations establish a minimum leverage ratio of not less than 4% for banks that are not the most highly rated or are anticipating or experiencing significant growth.

             The FDIC's capital regulations require higher capital levels for banks which exhibit more than a moderate degree of risk or exhibit other characteristics which necessitate that higher than minimum levels of capital be maintained. Any insured bank with a Tier 1 capital to total assets ratio of less than 2% is deemed to be operating in an unsafe and unsound condition pursuant to Section 8(a) of the FDIA unless the insured bank enters into a written agreement, to which the FDIC is a party, to correct its capital deficiency. Insured banks operating with Tier 1 capital levels below 2% (and which have not entered into a written agreement) are subject to an insurance removal action. Insured banks operating with lower than the prescribed minimum capital levels generally will not receive approval of applications submitted to the FDIC. Also, inadequately capitalized state nonmember banks will be subject to such administrative action as the FDIC deems necessary.

             FDIC regulations also require that banks meet a risk-based capital standard. The risk-based capital standard requires the maintenance of total capital (which is defined as Tier 1 capital and Tier 2 or supplementary capital) to risk weighted assets of 8% and Tier 1 capital to risk-weighted assets of 4%. In determining the amount of risk-weighted assets, all assets, plus certain off balance sheet items, are multiplied by a risk-weight of 0% to 100%, based on the risks the FDIC believes are inherent in the type of asset or item. The components of Tier 1 capital are equivalent to those discussed above under the 3% leverage requirement. The components of supplementary capital currently include cumulative perpetual preferred stock, adjustable-rate perpetual preferred stock, mandatory convertible securities, term subordinated debt, intermediate-term preferred stock and allowance for possible loan and lease losses. Allowance for possible loan and lease losses includable in supplementary capital is limited to a maximum of 1.25% of risk-weighted assets. Overall, the amount of capital counted toward supplementary capital cannot exceed 100% of Tier 1 capital. The FDIC includes in its evaluation of a bank's capital adequacy an assessment of the exposure to declines in the economic value of the bank's capital due to changes in interest rates. However, no measurement framework for assessing the level of a bank's interest rate risk exposure has been codified. In the future, the FDIC will issue a proposed rule that would establish an explicit minimum capital charge for interest rate risk, based on the level of a bank's measured interest rate risk exposure.

             An undercapitalized, significantly undercapitalized, or critically undercapitalized institution is required to submit an acceptable capital restoration plan to its appropriate federal banking agency. The plan must specify (i) the steps the institution will take to become adequately capitalized, (ii) the capital levels to be attained each year, (iii) how the institution will comply with any regulatory sanctions then in effect against the institution and (iv) the types and levels of activities in which the institution will engage. The banking agency may not accept a capital restoration plan unless the agency determines, among other things, that the plan "is based on realistic assumptions, and is likely to succeed in restoring the institution's capital" and "would not appreciably increase the risk...to which the institution is exposed."

             The FDIA provides that the appropriate federal regulatory agency must require an insured depository institution that is significantly undercapitalized or is undercapitalized and either fails to submit an acceptable capital restoration plan within the time period allowed or fails in any material respect to implement a capital restoration plan accepted by the appropriate federal banking agency to take one or more of the following actions: (i) sell enough shares, including voting shares, to become adequately capitalized; (ii) merge with (or be sold to) another institution (or holding company), but only if grounds exist for appointing a conservator or receiver; (iii) restrict certain transactions with banking affiliates as if the "sister bank" requirements of Section 23A of the Federal Reserve Act ("FRA") did not exist; (iv) otherwise restrict transactions with bank or non-bank affiliates; (v) restrict interest rates that the institution pays on deposits to "prevailing rates" in the institution's region; (vi) restrict asset growth or reduce total assets; (vii) alter, reduce or terminate activities; (viii) hold a new election of directors; (ix) dismiss any director or senior executive officer who held office for more than 180 days immediately before the institution became undercapitalized; (x) employ "qualified" senior executive officers; (xi) cease accepting deposits from correspondent depository institutions; (xii) divest certain




27




non-depository affiliates which pose a danger to the institution; (xiii) be divested by a parent holding company; and (xiv) take any other action which the agency determines would better carry out the purposes of the Prompt Corrective Action provisions. See "-- Prompt Corrective Action."

             The FDIC has adopted the Federal Financial Institutions Examination Council's recommendation regarding the adoption of Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Specifically, the agencies determined that net unrealized holding gains or losses on available for sale debt and equity securities should not be included when calculating core and risk-based capital ratios.

             FDIC capital requirements are designated as the minimum acceptable standards for banks whose overall financial condition is fundamentally sound, which are well-managed and have no material or significant financial weaknesses. The FDIC capital regulations state that, where the FDIC determines that the financial history or condition, including off-balance sheet risk, managerial resources and/or the future earnings prospects of a bank are not adequate and/or a bank has a significant volume of assets classified substandard, doubtful or loss or otherwise criticized, the FDIC may determine that the minimum adequate amount of capital for that bank is greater than the minimum standards established in the regulation.

             The Bank's management believes that, under the current regulations, the Bank will continue to meet its minimum capital requirements in the foreseeable future. However, events beyond the control of the Bank, such as a downturn in the economy in areas where the Bank has most of its loans, could adversely affect future earnings and, consequently, the ability of the Bank to meet its capital requirements.

             The table below sets forth the Bank's capital position relative to its FDIC capital requirements at June 30, 2000. The definitions of the terms used in the table are those provided in the capital regulations issued by the FDIC.

	At June 30, 2000
	Amount	Percent of Adjusted Total Assets(1)
	(Dollars in thousands)
Tier 1 (leverage) capital	$21,482	11.9%
Tier 1 (leverage) capital requirement(2)	7,229	4.0
Excess	$14,253 ======	7.9% ======
Tier 1 risk adjusted capital	$21,482	20.0%
Tier 1 risk adjusted capital requirement	4,296	4.0
Excess	$17,186 ======	16.0% ======
Total risk-based capital	$22,759	21.2%
Total risk-based capital requirement	8,593	8.0
Excess	$14,166 ======	13.2% ======

___________________________

(1)

For the Tier 1 (leverage) capital and Missouri regulatory capital calculations, percent of total average assets of $180.7 million. For the Tier 1 risk-based capital and total risk-based capital calculations, percent of total risk-weighted assets of $107.4 million.

(2)

As a Missouri-chartered savings bank, the Bank is subject to the capital requirements of the FDIC and the Division. The FDIC requires state-chartered savings banks, including the Bank, to have a minimum leverage ratio of Tier 1 capital to total assets of at least 3%, provided, however, that all institutions, other than those (i) receiving the highest rating during the examination process and (ii) not anticipating any significant growth, are required to maintain a ratio of 1% to 2% above the stated minimum, with an absolute total capital to risk-weighted assets of at least 8%. The Bank has not been notified by the FDIC of any leverage capital requirement specifically applicable to it.

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             Loans to One Borrower. As a result of the 10(1) Election made by the Bank in connection with the Charter Conversion (see "Item 1. Description of Business - General," the Bank remains subject to the loans to one borrower regulations applicable to federal savings associations).

             Activities and Investments of Insured State-Chartered Banks. The FDIA generally limits the activities and equity investments of FDIC-insured, state-chartered banks to those that are permissible for national banks. Under regulations dealing with equity investments, an insured state bank generally may not directly or indirectly acquire or retain any equity investment of a type, or in an amount, that is not permissible for a national bank. An insured state bank is not prohibited from, among other things, (i) acquiring or retaining a majority interest in a subsidiary, (ii) investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation or new construction of a qualified housing project, provided that such limited partnership investments may not exceed 2% of the bank's total assets, (iii) acquiring up to 10% of the voting stock of a company that solely provides or reinsures directors', trustees' and officers' liability insurance coverage or bankers' blanket bond group insurance coverage for insured depository institutions, and (iv) acquiring or retaining the voting shares of a depository institution if certain requirements are met.

             Subject to certain regulatory exceptions, FDIC regulations provide that an insured state-chartered bank may not, directly, or indirectly through a subsidiary, engage as "principal" in any activity that is not permissible for a national bank unless the FDIC has determined that such activities would pose no risk to the insurance fund of which it is a member and the bank is in compliance with applicable regulatory capital requirements. Any insured state-chartered bank directly or indirectly engaged in any activity that is not permitted for a national bank or for which the FDIC has granted and exception must cease the impermissible activity.

            Affiliate Transactions. The Company and the Bank are legal entities separate and distinct. Various legal limitations restrict the Bank from lending or otherwise supplying funds to the Company (an "affiliate"), generally limiting such transactions with the affiliate to 10% of the bank's capital and surplus and limiting all such transactions to 20% of the bank's capital and surplus. Such transactions, including extensions of credit, sales of securities or assets and provision of services, also must be on terms and conditions consistent with safe and sound banking practices, including credit standards, that are substantially the same or at least as favorable to the bank as those prevailing at the time for transactions with unaffiliated companies.

             Federally insured banks are subject, with certain exceptions, to certain restrictions on extensions of credit to their parent holding companies or other affiliates, on investments in the stock or other securities of affiliates and on the taking of such stock or securities as collateral from any borrower. In addition, such banks are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or the providing of any property or service.

            QualifiedThrift Lender Test. As a result of the 10(l) Election made by the Bank in connection with its conversion to a state savings bank (see Item 1. Description of Business -- General"), the Bank remains subject to the qualified thrift lender ("QTL") test applicable to federal savings associations.

             All savings associations are required to meet a QTL test to avoid certain restrictions on their operations. A savings institution that fails to become or remain a QTL shall either convert to a national bank charter or be subject to the following restrictions on its operations: (i) the Bank may not make any new investment or engage in activities that would not be permissible for national banks; (ii) the Bank may not establish any new branch office where a national bank located in the savings institution's home state would not be able to establish a branch office; (iii) the Bank shall be ineligible to obtain new advances from any FHLB; and (iv) the payment of dividends by the Bank shall be subject to the rules regarding the statutory and regulatory dividend restrictions applicable to national banks. Also, beginning three years after the date on which the savings institution ceases to be a QTL, the savings institution would be prohibited from retaining any investment or engaging in any activity not permissible for a national bank and would be required to repay any outstanding advances to any FHLB. In addition, within one year of the date on which a savings association controlled by a company ceases to be a QTL, the company must register as a bank holding company and become subject to the rules applicable to such companies. A savings institution may requalify as a QTL if it thereafter complies with the QTL test.


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             Currently, the QTL test requires that either an institution qualify as a domestic building and loan association under the Internal Revenue Code or that 65% of an institution's "portfolio assets" (as defined) consist of certain housing and consumer-related assets on a monthly average basis in nine out of every 12 months. Assets that qualify without limit for inclusion as part of the 65% requirement are loans made to purchase, refinance, construct, improve or repair domestic residential housing and manufactured housing; home equity loans; mortgage-backed securities (where the mortgages are secured by domestic residential housing or manufactured housing); FHLB stock; direct or indirect obligations of the FDIC; and loans for educational purposes, loans to small businesses and loans made through credit cards. In addition, the following assets, among others, may be included in meeting the test subject to an overall limit of 20% of the savings institution's portfolio assets: 50% of residential mortgage loans originated and sold within 90 days of origination; 100% of consumer loans; and stock issued by FHLMC or FNMA. Portfolio assets consist of total assets minus the sum of (i) goodwill and other intangible assets, (ii) property used by the savings institution to conduct its business, and (iii) liquid assets up to 20% of the institution's total assets. At June 30, 2000, the Bank was in compliance with the QTL test.

             Community Reinvestment Act.Banks are also subject to the provisions of the Community Reinvestment Act of 1977 ("CRA"), which requires the appropriate federal bank regulatory agency, in connection with its regular examination of a bank, to assess the bank's record in meeting the credit needs of the community serviced by the bank, including low and moderate income neighborhoods. The regulatory agency's assessment of the bank's record is made available to the public. Further, such assessment is required of any bank which has applied, among other things, to establish a new branch office that will accept deposits, relocate an existing office or merge or consolidate with, or acquire the assets or assume the liabilities of, a federally regulated financial institution. The Bank received a "satisfactory" rating during its most recent CRA examination.

             Dividends. Dividends from the Bank constitute the major source of funds for dividends, which may be paid by the Company. The amount of dividends payable by the Bank to the Company depends upon the Bank's earnings and capital position, and is limited by federal and state laws, regulations and policies.

             The amount of dividends actually paid during any one period will be strongly affected by the Bank's management policy of maintaining a strong capital position. Federal law further provides that no insured depository institution may make any capital distribution (which would include a cash dividend) if, after making the distribution, the institution would be "undercapitalized," as defined in the prompt corrective action regulations. Moreover, the federal bank regulatory agencies also have the general authority to limit the dividends paid by insured banks if such payments should be deemed to constitute an unsafe and unsound practice.

The Company

            General. As a result of the 10(l) Election made by the Bank, in connection with the charter conversion, the Company is a savings and loan holding company regulated by the OTS (for as long as the Bank satisfies the QTL test) rather than a bank holding company regulated by the FRB. Accordingly, the Company is subject to OTS regulations and filing requirements.

             Holding Company Acquisitions. The HOLA and OTS regulations issued thereunder generally prohibit a savings and loan holding company, without prior OTS approval, from acquiring more than 5% of the voting stock of any other savings association or savings and loan holding company or controlling the assets thereof. They also prohibit, among other things, any director or officer of a savings and loan holding company, or any individual who owns or controls more than 25% of the voting shares of such holding company, from acquiring control of any savings association not a subsidiary of such savings and loan holding company, unless the acquisition is approved by the OTS.

             Holding Company Activities. As a unitary savings and loan holding company, the Company generally is not subject to activity restrictions under the HOLA. If the Company acquires control of another savings association as a separate subsidiary other than in a supervisory acquisition, it would become a multiple savings and loan holding company. There generally are more restrictions on the activities of a multiple savings and loan holding company than on those of a unitary savings and loan holding company. The HOLA provides that, among other things, no multiple savings and loan holding company or subsidiary thereof which is not an insured association shall commence or continue for more than two years after becoming a multiple savings and loan association holding company or subsidiary thereof,



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any business activity other than: (i) furnishing or performing management services for a subsidiary insured institution, (ii) conducting an insurance agency or escrow business, (iii) holding, managing, or liquidating assets owned by or acquired from a subsidiary insured institution, (iv) holding or managing properties used or occupied by a subsidiary insured institution, (v) acting as trustee under deeds of trust, (vi) those activities previously directly authorized by regulation as of March 5, 1987 to be engaged in by multiple holding companies or (vii) those activities authorized by the Federal Reserve Board as permissible for bank holding companies, unless the OTS by regulation, prohibits or limits such activities for savings and loan holding companies. Those activities described in (vii) above also must be approved by the OTS prior to being engaged in by a multiple savings and loan holding company.

             Qualified Thrift Lender Test. The HOLA provides that any savings and loan holding company that controls a savings association that fails the QTL test, as explained under "-- The Bank -- Qualified Thrift Lender Test," must, within one year after the date on which the Bank ceases to be a QTL, register as and be deemed a bank holding company subject to all applicable laws and regulations.

TAXATION
Federal Taxation

             General. The Company and the Bank report their income on a fiscal year basis using the accrual method of accounting and are subject to federal income taxation in the same manner as other corporations with some exceptions, including particularly the Bank's reserve for bad debts discussed below. The following discussion of tax matters is intended only as a summary and does not purport to be a comprehensive description of the tax rules applicable to the Bank or the Company.

             Bad Debt Reserve. Historically, savings institutions, such as the Bank used to be, which met certain definitional tests primarily related to their assets and the nature of their business ("qualifying thrift"), were permitted to establish a reserve for bad debts and to make annual additions thereto, which may have been deducted in arriving at their taxable income. The Bank's deductions with respect to "qualifying real property loans," which are generally loans secured by certain interest in real property, were computed using an amount based on the Bank's actual loss experience, or a percentage equal to 8% of the Bank's taxable income, computed with certain modifications and reduced by the amount of any permitted additions to the non-qualifying reserve. Due to the Bank's loss experience, the Bank generally recognized a bad debt deduction equal to 8% of taxable income.

             The thrift bad debt rules were revised by Congress in 1996. The new rules eliminated the 8% of taxable income method for deducting additions to the tax bad debt reserves for all thrifts for tax years beginning after December 31, 1995. These rules also required that all institutions recapture all or a portion of their bad debt reserves added since the base year (last taxable year beginning before January 1, 1988). The Bank has no post-1987 reserves subject to recapture. For taxable years beginning after December 31, 1995, the Bank's bad debt deduction is determined under the experience method using a formula based on actual bad debt experience over a period of years. The unrecaptured base year reserves will not be subject to recapture as long as the institution continues to carry on the business of banking. In addition, the balance of the pre-1988 bad debt reserves continue to be subject to provisions of present law referred to below that require recapture in the case of certain excess distributions to shareholders.

             Distributions. To the extent that the Bank makes "nondividend distributions" to the Company, such distributions will be considered to result in distributions from the balance of its bad debt reserve as of December 31, 1987 (or a lesser amount if the Bank's loan portfolio decreased since December 31, 1987) and then from the supplemental reserve for losses on loans ("Excess Distributions"), and an amount based on the Excess Distributions will be included in the Bank's taxable income. Nondividend distributions include distributions in excess of the Bank's current and accumulated earnings and profits, distributions in redemption of stock and distributions in partial or complete liquidation. However, dividends paid out of the Bank's current or accumulated earnings and profits, as calculated for federal income tax purposes, will not be considered to result in a distribution from the Bank's bad debt reserve. The amount of additional taxable income created from an Excess Distribution is an amount that, when reduced by the tax attributable to the income, is equal to the amount of the distribution. Thus, if the Bank makes a "nondividend distribution," then approximately one and one-half times the Excess Distribution would be includable in gross income for federal income tax purposes, assuming a 34% corporate income tax rate (exclusive of state and local taxes). See



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"REGULATION" for limits on the payment of dividends by the Bank. The Bank does not intend to pay dividends that would result in a recapture of any portion of its tax bad debt reserve.

            Corporate Alternative Minimum Tax. The Internal Revenue Code imposes a tax on alternative minimum taxable income ("AMTI") at a rate of 20%. The excess of the tax bad debt reserve deduction using the percentage of taxable income method over the deduction that would have been allowable under the experience method is treated as a preference item for purposes of computing the AMTI. In addition, only 90% of AMTI can be offset by net operating loss carry-overs. AMTI is increased by an amount equal to 75% of the amount by which the Bank's adjusted current earnings exceeds its AMTI (determined without regard to this preference and prior to reduction for net operating losses). For taxable years beginning after December 31, 1986, and before January 1, 1996, an environmental tax of 0.12% of the excess of AMTI (with certain modification) over $2.0 million is imposed on corporations, including the Bank, whether or not an Alternative Minimum Tax is paid.

             Dividends-Received Deduction. The Company may exclude from its income 100% of dividends received from the Bank as a member of the same affiliated group of corporations. The corporate dividends-received deduction is generally 70% in the case of dividends received from unaffiliated corporations with which the Company and the Bank will not file a consolidated tax return, except that if the Company or the Bank owns more than 20% of the stock of a corporation distributing a dividend, then 80% of any dividends received may be deducted.

Missouri Taxation

             Missouri-based savings banks, such as the Bank, are subject to a special financial institutions tax, based on net income without regard to net operating loss carryforwards, at the rate of 7% of net income. This tax is in lieu of certain other state taxes on thrift institutions, on their property, capital or income, except taxes on tangible personal property owned by the Bank and held for lease or rental to others and on real estate, contributions paid pursuant to the Unemployment Compensation Law of Missouri, social security taxes, sales taxes and use taxes. In addition, the Company is entitled to credit against this tax all taxes paid to the State of Missouri or any political subdivision except taxes on tangible personal property owned by the Bank and held for lease or rental to others and on real estate, contributions paid pursuant to the Unemployment Compensation Law of Missouri, social security taxes, sales and use taxes, and taxes imposed by the Missouri Financial Institutions Tax Law. Missouri savings banks are not subject to the regular state corporate income tax.

Audits

            There have not been any IRS audits of the Company's Federal income tax returns or audits of the Bank's state income tax returns during the past five years.

             For additional information regarding taxation, see Note 10 of Notes to Consolidated Financial Statements contained in the Annual Report.









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Personnel

             As of June 30, 2000, the Company had 63 full-time employees and 9 part-time employees. The Company believes that employees play a vital role in the success of a service company and that the Company's relationship with its employees is good. The employees are not represented by a collective bargaining unit.

Item 2. Description of Properties

             The following table sets forth certain information regarding the Bank's offices as of June 30, 2000.

Location	Year Opened	Building Net Book Value as of June 30, 2000	Land Owned/ Leased	Building Owned/ Leased
	(Dollars in thousands)
Main Office
531 Vine Street Poplar Bluff, Missouri	1966	$480	Owned	Owned
Branch Offices
Highway 60 Van Buren, Missouri	1982	137	Owned	Owned
1330 Highway 67 Poplar Bluff, Missouri	1976	---	Leased(1)	Owned
Business 60 West Dexter, Missouri	1979	241	Owned	Owned
100 South Madison Malden, Missouri	1974	---	Leased(2)	Leased
308 First Street Kennett, Missouri	1982	159	Owned	Owned
116 Washington Doniphan, Missouri	1976	---	Leased(3)	Leased
Highway 106 & 2nd Street Ellington, Missouri	1987	---	Leased(4)	Leased

______________________

(1)	Lease expired on September 3, 1999 and was renewed for its final 5 year period.
(2)	Month-to-month lease.
(3)	Leased for $400 per month. Lease expires November 1, 2002.
(4)	Month-to-month lease.

Item 3.      Legal Proceedings

             In the opinion of management, the Bank is not a party to any pending claims or lawsuits that are expected to have a material effect on the Bank's financial condition or operations. Periodically, there have been various claims and lawsuits involving the Bank mainly as a defendant, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of real property loans and other issues incident to



33




the Bank's business. Aside from such pending claims and lawsuits, which are incident to the conduct of the Bank's ordinary business, the Bank is not a party to any material pending legal proceedings that would have a material effect on the financial condition or operations of the Bank.

Item 4.      Submission of Matters to a Vote of Security Holders
             No matters were submitted to a vote of security holders during the quarter ended June 30, 2000.


PART II

Item 5.      Market for the Registrant's Common Equity and Related Stockholder Matters

             The information contained in the section captioned "Common Stock" in the Annual Report is incorporated herein by reference.

Item 6.      Management's Discussion and Analysis or Plan of Operation

            The information contained in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report is incorporated herein by reference.

Item 7.      Financial Statements

      Independent Auditors' Report*

            (a)      Consolidated Statements of Financial Condition as of June 30, 2000 and 1999*
            (b)      Consolidated Statements of Income for the Years Ended June 30, 2000, 1999 and 1998*
            (c)      Consolidated Statements of Stockholders' Equity For the Years Ended June 30, 2000, 1999 and 1998*
            (d)      Consolidated Statements of Cash Flows For the Years Ended June 30, 2000, 1999 and 1998*
            (e)      Notes to Consolidated Financial Statements*

* Contained in the Annual Report filed as an exhibit hereto and incorporated herein by reference. All schedules have been omitted as the required information is either inapplicable or contained in the Consolidated Financial Statements or related Notes contained in the Annual Report.

Item 8.      Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

             No disagreement with the Company's independent accountants on accounting and financial disclosure has occurred during the two most recent fiscal years.

PART III

Item 9.      Directors, Executive Officers, Promoters and Control Persons; Compliance with
             Section 16(a) of the Exchange Act

             Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's directors and executive officers, and persons who own more than 10% of the Company's Common Stock, file with the SEC initial reports of ownership and reports of changes in ownership of the Company's Common Stock. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

             To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required during the fiscal year ended June 30, 2000, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with except for the inadvertent failure to timely report on Form 4 one transaction by each of L. Douglas Bagby and Ronald D. Black, directors of the Company.



34




             The following table sets forth certain information with respect to the executive officers of the Company and the Bank.

		Position
Name	Age at June 30, 2000	Company	Bank
Thadis R. Seifert	81	Chairman of the Board and President	Director
Samuel H. Smith	62	Secretary/Treasurer	Chairman of the Board
Greg A. Steffens	33	Chief Financial Officer	President, Chief Executive Officer and Chief Finanical Officer

             In addition to the above, the Bank's executive officer group includes:

Name	Age at June 30, 2000	Position
James W. Tatum	74	Vice Chairman
James D. Duncan	43	Executive Vice President and Chairman Loan Department

             The principal occupation of each executive officer of the Company is set forth below. All of the officers listed above have held positions with or been employed by the Company for five years unless otherwise stated. All executive officers reside in Poplar Bluff, Missouri. There are no family relationships among or between the executive officers, unless otherwise stated.

             Thadis R. Seifert served as Executive Vice President of the Bank from 1970 his retirement in until 1985. He has been a director of the Bank since 1971. In 1997, Mr. Seifert was elected as Chairman of the Company and in 1999, he was appointed as President. Mr. Seifert also serves as an advisory Board Member for the Poplar Bluff Municipal Utilities. He is active in a variety of organizations, including the Kiwanis Club.

             Samuel H. Smith is President, Chief Executive Office and a majority stockholder of S H Smith and Company, Inc., an engineering consulting firm in Poplar Bluff, Missouri. He is a member of the Poplar Bluff Chamber of Commerce, the American Society of Civil Engineers, Missouri Society of Professional Engineers, and a member of the board of Directors of the Poplar Bluff Museum.

             Greg A. Steffens joined the Bank in 1998 and serves as the Chief Financial Officer of the Company and as President, Chief Executive Officer and Chief Financial Officer of the Bank. From 1993 to 1998, Mr. Steffens served as Chief Financial Officer of 1^st Savings Bank and Sho-Me Financial Corp. in Mount Vernon, Missouri. From 1989 to 1993, Mr. Steffens was employed by the OTS as a thrift examiner. Mr. Steffens is a member of the Rotary Club.

             James W. Tatum is the Vice President of the Company. Mr. Tatum was a member and a Partner of Kraft, Miles & Tatum, CPA's, an accounting firm, for over 40 years until his retirement in 1989. He is a past member of the Kiwanis Club and the Poplar Bluff Chamber of Commerce, the American Institute of CPA's and the Missouri Society of CPA's.

             James D. Duncan joined the Bank in August, 1999 and serves as Executive Vice President and Chairman of the loan department of the Bank. From 1996 to 1999, Mr. Duncan served as Senior Vice President of the Bank of Sullivan, Missouri. Since 1979, Mr. Duncan has held various lending positions primarily in commercial lending. He is a member of the Rotary Club.



35




Item 10. Executive Compensation

            The information contained under the section captioned "Proposal I -- Election of Directors" in the Proxy Statement is incorporated herein by reference.

Item 11.      Security Ownership of Certain Beneficial Owners and Management

(a)	Security Ownership of Certain Beneficial Owners
	Information required by this item is incorporated herein by reference to the section captioned "Voting Securities and Security Ownership of Certain Beneficial Owners and Management" of the Proxy Statement.
(b)	Security Ownership of Management
	Information required by this item is incorporated herein by reference to the sections captioned "Voting Securities and Security Ownership of Certain Beneficial Owners and Management" and "Proposal I - Election of Directors" of the Proxy Statement.
(c)	Changes in Control
	The Company is not aware of any arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

Item 12. Certain Relationships and Related Transactions

             The information required by this item is incorporated herein by reference to the section captioned "Proposal I -- Election of Directors -- Certain Transactions."

Item 13. Exhibits, List and Reports on Form 8-K

      (a)      Exhibits

                  See Index to Exhibits.

      (b)      Report on Form 8-K

                  No reports on Form 8-K were filed during the quarter ended June 30, 2000.











36





SIGNATURES

             Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SOUTHERN MISSOURI BANCORP, INC.
Date:       September 28, 2000	By:	/s/ Thadis R. Seifert Thadis R. Seifert President (Duly Authorized Representative)

             Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Thadis R. Seifert Thadis R. Seifert President (Principal Executive Officer)	September 28, 2000
By:	Donald R. Crandell Director	September 28, 2000
By:	/s/ Greg A. Steffens Greg A. Steffens Chief Financial Officer (Principal Financial and Accounting Officer)	September 28, 2000
By:	/s/ Leonard W. Ehlers Leonard W. Ehlers Director	September 28, 2000
By:	/s/ Samuel H. Smith Samuel H. Smith Director	September 28, 2000
By:	/s/ James W. Tatum James W. Tatum Vice President and Director	September 28, 2000
By:	/s/ Ronnie D. Black Ronnie D. Black Director	September 28, 2000
By:	/s/ L. Douglas Bagby L. Douglas Bagby Director	September 28, 2000

Index to Exhibits

Regulation S-B Exhibit Number	Document	Reference to Prior Filing or Exhibit Number Attached Hereto
3(i)	Certificate of Incorporation of the Registrant	3(i)
3(ii)	Bylaws of the Registrant	3(ii)
10	Material contracts:
	(a)      Registrant's 1994 Stock Option Plan	*
	(b)      Southern Missouri Savings Bank, FSB           Management Recognition and Development Plans	*
	(c)      Employment Agreement with Greg A. Steffens	**
	(d)      Director's Retirement Agreements          (i)      Robert A. Seifert          (ii)      Thadis R. Seifert          (iv)      Leonard W. Ehlers          (v)      James W. Tatum          (vi)      Samuel H. Smith	***
	(e)      Tax Sharing Agreement	***
11	Statement Regarding Computation of Per Share Earnings	11
13	2000 Annual Report to Stockholders	13
21	Subsidiaries of the Registrant	21
23	Consent of Auditors	23
27	Financial Data Schedule	27

_______________________

*	Incorporated by reference to the Registrant's 1994 annual meeting proxy statement dated October 21, 1994.
**	Incorporated by reference to the Registrant's Annual Report on Form 10-KSB for the year ended June 30, 1999.
***	Incorporated by reference to the Registrant's Annual Report on Form 10-KSB for the year ended June 30, 1995.