SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  ---------
                                  FORM 10-Q


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

                      For the quarterly period ended June 30, 2000

                OR

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

                      For the transition period from ________ to _______


                            Commission File #0-21466

                         JEFFERSON SAVINGS BANCORP, INC.
 ------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                             43-1625841
-------------------------------------------------    ---------------------------
(State or other jurisdiction                         (I.R.S. Employer ID Number)
of incorporation or organization)

15435 Clayton Road, Ballwin, Missouri                              63011
-------------------------------------                         ---------------
(Address of principal executive offices)                        (Zip code)

Registrant's telephone number, including area code  (636) 227-3000
                                                     -------------


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 the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

             Class                              Outstanding at July 31, 2000
 ---------------------------------              ----------------------------
   Common Stock, Par Value $.01                      9,966,205 shares



<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                               INDEX to Form 10-Q





                                                                            PAGE
                                                                            ----
PART I        FINANCIAL INFORMATION

              Item 1.      Financial Statements

                           -   Consolidated Balance Sheets                   3

                           -   Consolidated Statements of Income             4

                           -   Consolidated Statement of Stockholders'
                                   Equity and Comprehensive Income           5

                           -   Consolidated Statements of Cash Flows         6

                           -   Notes to Consolidated Financial Statements    7

              Item 2.      Management's Discussion and Analysis of
                           Financial Condition and Results of Operations     9

              Item 3.      Quantitative and Qualitative Disclosures
                            About Market Risk                               22

PART II       OTHER INFORMATION

              Item 1.      Legal Proceedings                                24

              Item 2.      Changes in Securities and Use of Proceeds        24

              Item 3.      Defaults Upon Senior Securities                  24

              Item 4.      Submission of Matters to a Vote of Security
                           Holders                                          24

              Item 5.      Other Information                                24

              Item 6.      Exhibits and Reports on Form 8-K                 24

              SIGNATURES                                                    25




                                       2
<PAGE>


                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                           Consolidated Balance Sheets

                       June 30, 2000 and December 31, 1999

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                          June 30,              December 31,
                                         Assets                                             2000                    1999
                                         ------                                             ----                    ----
<S>                                                                                  <C>                              <C>
Cash                                                                                  $   10,768,370           $   12,141,714
Interest-bearing deposits                                                                  6,674,094                9,457,864
                                                                                      --------------           --------------
                         Cash and cash equivalents                                        17,442,464               21,599,578
Investment securities available for sale, at fair value
     (amortized cost of $107,139,391 and $106,752,636 at
     June 30, 2000 and December 31, 1999, respectively)                                  102,838,509              103,342,199
Mortgage-backed securities available for sale, at fair
     value (amortized cost of $118,629,842 and $123,405,642
     at June 30, 2000 and December 31, 1999, respectively)                               113,402,830              118,447,068
Loans receivable, net                                                                  1,294,353,680            1,238,926,455
Investment in real estate, net                                                             1,466,344                1,521,668
Stock in Federal Home Loan Bank                                                           27,403,600               24,254,100
Bank owned life insurance                                                                 25,822,523               25,178,920
Office properties and equipment, net                                                      14,759,897               14,212,864
Deferred tax asset                                                                         4,181,000                3,718,000
Excess cost over fair value of net assets acquired                                        19,192,851               20,088,429
Accrued income and other assets                                                           13,350,230               11,645,132
                                                                                      --------------           --------------
                                                                                      $1,634,213,928            1,582,934,413
                                                                                      ==============           ==============

                          Liabilities and Stockholders' Equity
                          ------------------------------------

Savings deposits                                                                      $  980,893,073              974,965,236
Borrowed money                                                                           501,758,708              468,369,843
Advance payments by borrowers for taxes and insurance                                      7,643,312                3,377,641
Accrued expenses and other liabilities                                                    13,238,207               10,140,344
                                                                                      --------------           --------------
                         Total liabilities                                             1,503,533,300            1,456,853,064
                                                                                      --------------           --------------

Commitments and contingencies

Stockholders' equity:
     Preferred stock ($.01 par value):  Authorized
        5,000,000 shares; none issued                                                         --                       --
     Common stock ($.01 par value):  Authorized 20,000,000 shares;
        issued 10,100,112 shares at June 30, 2000 and
        December 31, 1999                                                                    101,001                  101,001
     Additional paid-in capital                                                           65,182,251               64,958,775
     Retained earnings, subject to certain restrictions                                   75,936,104               71,469,492
     Accumulated other comprehensive income (loss)                                        (5,716,894)              (5,021,011)
     Unamortized restricted stock awards                                                     (60,908)                 (65,908)
     Unearned ESOP shares                                                                 (3,177,274)              (3,678,225)
     Treasury stock, at cost: 133,907 shares and 142,286 shares
        at June 30, 2000 and December 31, 1999, respectively                              (1,583,652)              (1,682,775)
                                                                                      --------------           --------------
                         Total stockholders' equity                                      130,680,628              126,081,349
                                                                                      --------------           --------------
                                                                                      $1,634,213,928            1,582,934,413
                                                                                      ==============           ==============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>


                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                        Consolidated Statements of Income

                Three and six months ended June 30, 2000 and 1999

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                    Three months                        Six months
                                                                   ended June 30,                     ended June 30,
                                                                   --------------                     --------------
                                                               2000              1999             2000              1999
                                                               ----              ----             ----              ----
<S>                                                        <C>                <C>               <C>              <C>
Interest and dividend income:
    Loans receivable                                       $ 26,686,855       22,999,539        51,888,877       44,114,052
    Mortgage-backed securities                                1,846,307        1,835,314         3,732,693        2,672,880
    Investment securities                                     1,641,774        1,739,058         3,284,484        4,008,602
    Interest-bearing deposits and federal funds sold             84,251          208,943           140,922          549,512
    Stock in Federal Home Loan Banks                            463,751          262,577           872,629          462,125
                                                           ------------     ------------       -----------      -----------
                Total interest and dividend income           30,722,938       27,045,431        59,919,605       51,807,171
                                                           ------------     ------------       -----------      -----------
Interest expense:
    Savings deposits                                         11,689,677       11,982,982        23,008,581       24,276,168
    Borrowed money                                            7,858,785        4,587,183        14,816,103        7,597,742
                                                           ------------     ------------       -----------      -----------
                Total interest expense                       19,548,462       16,570,165        37,824,684       31,873,910
                                                           ------------     ------------       -----------      -----------
                Net interest income                          11,174,476       10,475,266        22,094,921       19,933,261
Provision for losses on loans                                   325,000               -            625,000               -
                                                           ------------     ------------       -----------      -----------
                Net interest income after
                    provision for losses on loans            10,849,476       10,475,266        21,469,921       19,933,261
                                                           ------------     ------------       -----------      -----------
Noninterest income:
    Servicing and other loan fees                               300,411          172,191           694,431          335,098
    Fees for other services to customers                        493,917          333,037           921,594          578,662
    Gain (loss) on sales of investment securities, net           -                19,985           (14,688)          19,985
    Gain on sales of mortgage-backed securities, net             -                -                 -                36,990
    Gain on sales of loans receivable, net                      438,176          198,100           688,451          445,463
    Real estate operations, net                                 (26,963)         (69,555)          (72,091)        (167,495)
    Other                                                       420,091           96,766           884,557          268,531
                                                           ------------     ------------       -----------      -----------
                Total noninterest income                      1,625,632          750,524         3,102,254        1,517,234
                                                           ------------     ------------       -----------      -----------
Noninterest expense:
    General and administrative:
       Compensation and employee benefits                     3,963,210        3,409,807         7,837,418        6,493,695
       Occupancy                                              1,181,404          809,280         2,233,879        1,583,299
       Advertising                                              369,977          730,285           638,527          859,427
       Federal insurance premiums                                50,544          152,046           102,541          313,222
       Legal, examination, and other professional fees          383,302          657,632           833,938        1,093,149
       Other                                                  1,368,548        1,159,841         2,694,339        2,242,846
                                                           ------------     ------------       -----------      -----------
                Total general and administrative              7,316,985        6,918,891        14,340,642       12,585,638
    Amortization of excess cost over fair value
       of net assets acquired                                   447,789          447,789           895,578          897,224
                                                           ------------     ------------       -----------      -----------
                Total noninterest expense                     7,764,774        7,366,680        15,236,220       13,482,862
                                                           ------------     ------------       -----------      -----------
                Income before income taxes                    4,710,334        3,859,110         9,335,955        7,967,633
Income tax expense                                            1,785,000        1,567,000         3,539,000        3,247,000
                                                           ------------     ------------       -----------      -----------
                Net income                                 $  2,925,334        2,292,110         5,796,955        4,720,633
                                                           ============     ============       ===========      ===========

Earnings per share, basic                                  $ .31                  .24              .61              .50
                                                             ===                  ===              ===              ===
Earnings per share, diluted                                $ .30                  .24              .60              .49
                                                             ===                  ===              ===              ===
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

     Consolidated Statement of Stockholders' Equity and Comprehensive Income

                         Six months ended June 30, 2000

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                          Accumulated   Unamortized
                                                   Common Stock         Additional                          other        restricted
                                               --------------------       paid-in         Retained       comprehensive      stock
                                               Shares       Dollars       capital         earnings       income (loss)     awards
                                               ------       -------       -------         --------       -------------     ------

<S>                                          <C>          <C>            <C>             <C>             <C>              <C>
Balance at December 31, 1999                 10,100,112   $    101,001   $ 64,958,775    $ 71,469,492    $ (5,021,011)    $(65,908)

Comprehensive income:
    Net income                                     --             --             --         5,796,955            --            --
    Other comprehensive income (loss),
      net of reclassification adjustment           --             --             --              --          (695,883)         --

        Total comprehensive income

Dividends paid ($.14 per share)                    --             --             --        (1,330,343)           --            --

Release of ESOP shares in lieu of cash
    dividend on allocated ESOP shares              --             --           14,211            --              --            --

Stock issued in dividend reinvestment
    and stock purchase plan                        --             --           (4,326)           --              --            --

Amortization of restricted
    stock awards                                   --             --            8,500            --              --         5,000

Amortization of ESOP shares                        --             --          229,187            --              --            --

Stock options exercised                            --             --          (24,096)           --              --            --
                                           ------------   ------------   ------------    ------------    ------------    --------

Balance at June 30, 2000                     10,100,112   $    101,001   $ 65,182,251    $ 75,936,104    $ (5,716,894)   $(60,908)
                                           ============   ============   ============    ============    ============    ========


<CAPTION>

                                              Unearned         Treasury Stock             Total
                                               ESOP         ---------------------      stockholders'
                                               shares       Shares        Dollars         equity
                                              -------       -------       -------         ------

<S>                                          <C>          <C>            <C>             <C>
Balance at December 31, 1999                 $(3,678,225)  (142,286)    $(1,682,775)    $126,081,349

Comprehensive income:
    Net income                                     --          --             --           5,796,955
    Other comprehensive income (loss),
      net of reclassification adjustment           --          --             --            (695,883)
                                                                                        ------------
        Total comprehensive income                                                         5,101,072

Dividends paid ($.14 per share)                    --          --             --          (1,330,343)

Release of ESOP shares in lieu of cash
    dividend on allocated ESOP shares             69,924       --             --              84,135

Stock issued in dividend reinvestment
    and stock purchase plan                        --         4,851          57,387           53,061

Amortization of restricted
    stock awards                                   --          --             --              13,500

Amortization of ESOP shares                      431,027        --            --             660,214

Stock options exercised                            --         3,528          41,736           17,640
                                             -----------   --------     -----------     ------------

Balance at June 30, 2000                     $(3,177,274)  (133,907)    $(1,583,652)    $130,680,628
                                             ===========   =========    ===========     ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                      Consolidated Statements of Cash Flows

                     Six months ended June 30, 2000 and 1999

                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                2000                1999
                                                                                                ----                ----
<S>                                                                                       <C>                     <C>
Cash flows from operating activities:
   Net income                                                                             $    5,796,955          4,720,633
   Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                                                          2,193,888          2,684,221
        Provision for losses on loans                                                            625,000           -
        Net gain on sales of assets                                                             (644,117)          (585,247)
        Loans originated for sale                                                            (58,140,208)       (32,312,564)
        Sale of loans originated for sale                                                     50,072,780         34,251,895
        Deferred income taxes                                                                   (463,000)        (2,453,253)
        Stock dividend from Federal Home Loan Bank                                              -                   (53,100)
        Other, net                                                                             1,309,039         (1,682,451)
                                                                                          --------------      -------------
                Net cash provided by operating activities                                        750,337          4,570,134
                                                                                          --------------      -------------
Cash flows from investing activities:
   Principal repayments on:
      Loans receivable                                                                       281,165,545        288,067,152
      Mortgage-backed securities                                                               4,687,841          4,110,458
   Proceeds from maturity of investment securities                                               110,000         69,095,000
   Proceeds from sale of:
      Mortgage-backed securities available for sale                                             -                 4,676,186
      Investment securities available for sale                                                 1,985,313          5,010,938
   Proceeds from redemption of Federal Home Loan Bank stock                                     -                 3,046,900
   Cash invested in:
      Loans receivable - originated                                                         (295,123,375)      (230,184,574)
      Loans receivable - purchased                                                           (34,316,718)      (156,514,353)
      Mortgage-backed securities                                                                -              (101,591,817)
      Investment securities                                                                   (2,492,600)       (24,481,996)
      Stock in Federal Home Loan Bank                                                         (3,149,500)        (8,604,000)
   Proceeds from sale of real estate                                                           1,540,341          2,133,345
   Other, net                                                                                 (1,572,479)        (1,767,117)
                                                                                          --------------      -------------
                Net cash used in investing activities                                        (47,165,632)      (147,003,878)
                                                                                          --------------      -------------
Cash flows from financing activities:
   Increase (decrease) in savings deposits, net                                                5,863,287        (30,994,180)
   Increase in borrowed money, net                                                            33,388,865        167,703,738
   Increase in advance payments by borrowers for taxes and insurance                           4,265,671          5,082,833
   Dividends paid                                                                             (1,330,343)        (1,324,814)
   Other, net                                                                                     70,701           (313,661)
                                                                                          --------------      -------------
                Net cash provided by financing activities                                     42,258,181        140,153,916
                                                                                          --------------      -------------
                Decrease in cash and cash equivalents                                         (4,157,114)        (2,279,828)
Cash and cash equivalents at beginning of period                                              21,599,578         18,873,687
                                                                                          --------------      -------------
Cash and cash equivalents at end of period                                                $   17,442,464         16,593,859
                                                                                          ==============      =============

Supplemental disclosures of cash flow information:
   Interest paid                                                                          $   37,799,483         31,983,200
   Income taxes paid                                                                           4,388,552          3,851,585
   Noncash investing activities:
      Additions to real estate acquired in settlement
        of loans or through foreclosure                                                        1,685,292            282,263
      Loans originated to finance the sale of real estate                                       -                   126,400
   Noncash financing activity - interest credited to savings deposits                         17,869,559         18,210,730
                                                                                          ==============      =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       6
<PAGE>
                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                                 June 30, 2000

                                   (Unaudited)

(1)    BASIS OF PRESENTATION
              The accompanying  unaudited consolidated financial statements were
       prepared in accordance with instructions for Form 10-Q and, therefore, do
       not  include  all   information   and  notes  necessary  for  a  complete
       presentation  of financial  position,  results of operations,  changes in
       stockholders'  equity  and  comprehensive   income,  and  cash  flows  in
       conformity with generally accepted accounting  principles.  However,  all
       adjustments  (consisting only of normal recurring accruals) which, in the
       opinion of  management,  are  necessary  for a fair  presentation  of the
       unaudited  consolidated  financial  statements  have been included in the
       results of  operations  for the three and six months  ended June 30, 2000
       and 1999, respectively.

              Operating results for the three and six months ended June 30, 2000
       are not  necessarily  indicative  of the results that may be expected for
       the year ending December 31, 2000.

(2)    PRINCIPLES OF CONSOLIDATION
              The  accompanying   unaudited  consolidated  financial  statements
       include the accounts of Jefferson  Savings Bancorp,  Inc. ("the Company")
       and its wholly owned  subsidiary,  Jefferson  Heritage  Bank  ("Jefferson
       Heritage" or "the Bank").  Jefferson Heritage's wholly owned subsidiaries
       are Jefferson  Heritage  Mortgage  Company,  Jefferson  Financial,  Inc.,
       Jefferson Financial Corporation, and First Service Corporation,  Inc. All
       significant intercompany items have been eliminated.

(3)    EARNINGS PER SHARE
              The following table reconciles the numerators and denominators for
       basic and diluted  earnings per share for the  three-month  and six-month
       periods ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>

                                                                                       Three months ended June 30,
                                                                                           2000            1999
                                                                                           ----            ----
         <S>                                                                           <C>                <C>
          Numerator:
              Net income (basic and diluted earnings per share)                        $ 2,925,334        2,292,110
                                                                                       ===========       ==========
          Denominator:
              Average shares outstanding (basic earnings per share)                      9,554,589        9,510,394
              Effect of dilutive stock options                                             150,636          199,298
                                                                                       -----------       ----------
                 Average shares outstanding after assumed
                    conversions (diluted earnings per share)                             9,705,225        9,709,692
                                                                                       ===========       ==========
</TABLE>

                                       7
<PAGE>
                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>

                                                                                        Six months ended June 30,
                                                                                           2000            1999
                                                                                           ----            ----
          <S>                                                                          <C>                <C>
          Numerator:
              Net income (basic and diluted earnings per share)                        $ 5,796,955        4,720,633
                                                                                       ===========        =========
          Denominator:
              Average shares outstanding (basic earnings per share)                      9,535,147        9,488,791
              Effect of dilutive stock options                                             156,128          227,742
                                                                                       -----------        ---------
                 Average shares outstanding after assumed
                    conversions (diluted earnings per share)                             9,691,275        9,716,533
                                                                                       ===========        =========
</TABLE>

              Only employee stock ownership plan shares that have been allocated
       or committed to be released are considered  outstanding  for earnings per
       share calculations.

 (4)   COMPREHENSIVE INCOME
              Comprehensive  income for the  three-month  and six-month  periods
       ended June 30, 2000 and 1999 is summarized as follows:
<TABLE>
<CAPTION>

                                                                                    Three months ended June 30,
                                                                                      2000              1999
                                                                                      ----              ----

<S>                                                                                <C>                 <C>
          Net income                                                               $ 2,925,334          2,292,110
          Other comprehensive income (loss):
              Realized and unrealized holding gain (loss)
                 arising during the period, net of tax                                 134,837         (3,167,497)
              Less: reclassification adjustment for realized
                 gain included in net income, net of tax                                    -              11,991
                                                                                   -----------         ----------
                    Total other comprehensive income (loss)                            134,837         (3,179,488)
                                                                                   -----------         ----------
                    Total comprehensive income (loss)                              $ 3,060,171           (887,378)
                                                                                   ===========         ==========

</TABLE>
<TABLE>
<CAPTION>

                                                                                     Six months ended June 30,
                                                                                      2000              1999
                                                                                      ----              ----

          <S>                                                                      <C>                 <C>
          Net income                                                               $ 5,796,955          4,720,633
          Other comprehensive income (loss):
              Realized and unrealized holding loss
                 arising during the period, net of tax                                (705,577)        (3,675,238)
              Less: reclassification adjustment for realized
                 gain (loss) included in net income, net of tax                         (9,694)            34,185
                                                                                   -----------         ----------
                    Total other comprehensive income (loss)                           (695,883)        (3,709,423)
                                                                                   -----------         ----------
                    Total comprehensive income                                     $ 5,101,072          1,011,210
                                                                                   ===========         ==========

</TABLE>



                                       8
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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


The  following  discussion  reviews the  financial  condition and the results of
operations  of the Company as of and for the three and six months ended June 30,
2000.

FORWARD-LOOKING STATEMENTS

         When used in this discussion and elsewhere in this Quarterly  Report on
Form 10-Q,  the words or phrases "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. The Company cautions readers
not to place undue reliance on any such forward-looking statements,  which speak
only as of the date made, and advises  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 occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.

FINANCIAL CONDITION

         The Company's  primary strategy is to continue building its core retail
banking  business,  which is the origination of loans funded by savings deposits
and  borrowings  from the Federal  Home Loan Bank  ("FHLB").  Historically,  the
Company's  primary  loan  product  has  been   adjustable-rate,   single-family,
residential  loans.  The  Company  also  originates  and  sells   single-family,
fixed-rate,  residential loans through the Bank's subsidiary, Jefferson Heritage
Mortgage Company. The Company continues to emphasize  construction , development
and commercial real estate lending.

         The Company's total assets  increased $51.3 million,  or 3.2%, to $1.63
billion  at June 30,  2000 from  $1.58  billion  at  December  31,  1999.  Loans
receivable  increased $55.4 million,  or 4.5%, to $1.29 billion at June 30, 2000
from $1.24 billion at December 31, 1999. Loan origination  activity in the first
six months of 2000 totaled  $353.3  million  compared to $262.5  million for the
first  six  months  of  1999.  Commercial  real  estate  and  construction  loan
originations  totaled $267 million,  or approximately  75% of total  origination
activity during the six months ended June 30, 2000 compared to $188 million,  or
approximately  72% during the six months  ended June 30,  1999.  Loan  purchases
totaled $34.3 million for the first half of 2000 compared to $156.5  million for
1999.  Principal  repayments  totaled $281.2 million for the first six months of
2000 compared to $288.1 million for 1999.

         The Company  sometimes  supplements asset growth in times of lower loan
demand with the  purchase  of  investment  and  mortgage-backed  securities  and
generally  chooses  between  these two  types of  investments  depending  on the
instruments'  interest rate risk characteristics and the yields available in the
market.  The Company  de-emphasized  this type of investing  activity during the
first  six  months  of  2000  because  of the  high  level  of  lending  volume.
Mortgage-backed securities decreased $5.0 million, or 4.3%, to $113.4 million at
June 30, 2000 from $118.4  million at December 31, 1999.  Investment  securities
decreased  $504,000,  or 0.5%,  to $102.8  million at June 30,  2000 from $103.3
million at December 31, 1999.

                                       9
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

     The Company has substantial  borrowing capacity with the FHLB and generally
chooses  between savings  deposits and  borrowings,  depending on their relative
costs, when funding its investing  activities.  Beginning in 1999 and continuing
in 2000,  the Company chose to fund a large portion of its investing  activities
with  borrowings  from  the FHLB  since  such  borrowings  were  generally  less
expensive than the cost of attracting savings deposits with similar  maturities.
As a result of this strategy,  borrowed money increased $33.4 million,  or 7.1%,
to $501.8  million at June 30, 2000 from $468.4  million at December  31,  1999.
Savings deposits  increased $5.9 million,  or .6%, to $980.9 million at June 30,
2000 from $975.0  million at December  31, 1999.  The increase was  primarily in
certificates of deposit.

     Stockholders'  equity increased $4.6 million, or 3.6%, to $130.7 million at
June 30, 2000 from $126.1  million at December  31,  1999.  Contributing  to the
growth in stockholders' equity was net income of $5.8 million,  partially offset
by a $696,000  increase,  net of tax, in unrealized  holding losses on available
for sale  investments  and the  payment  of $1.3  million  in  dividends  on the
Company's common stock. The ratio of stockholders' equity to assets increased to
8.00% at June 30, 2000  compared to 7.97% at December  31, 1999 as the result of
growth in equity.  The Company's total book value per share at June 30, 2000 was
$13.65 compared to $13.28 at December 31, 1999 and tangible book value per share
was $11.64 at June 30, 2000  compared to $11.16 at December 31,  1999.  Unearned
ESOP shares of 392,111 and 458,575 were excluded in  calculating  book value per
share at June 30, 2000 and December 31, 1999, respectively. There were 9,966,205
common shares outstanding at June 30, 2000.

AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND COSTS

     The  following  table  sets  forth  certain  information  relating  to  the
Company's  average  interest-earning  assets  and  interest-bearing  liabilities
including  the  average  yield  on  such  assets  and the  average  cost of such
liabilities  for the  periods  indicated.  Such  yields and costs are derived by
dividing  annualized income or expense by the average  three-month and six-month
average  balances  of  assets  or  liabilities,  respectively,  for the  periods
indicated. During the periods indicated,  nonaccrual loans are included in loans
receivable.



                                       10
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

<TABLE>
<CAPTION>
                                                     Three month period ended June 30,
                                                    -----------------------------------
                                                  2000                             1999
                                                 ------                           ------
                                                           Average                          Average
                                         Average           Yield/        Average            Yield/
                                         Balance  Interest  Cost         Balance   Interest  Cost
                                         -------  --------  ----         -------   --------  ----
                                                          (Dollars in thousands)
<S>                                   <C>          <C>       <C>      <C>          <C>        <C>
Interest-earning assets:
   Loans receivable ................   $1,286,311  $26,687   8.30%     $1,195,771  $23,000    7.69%
   Mortgage-backed securities ......      120,128    1,846   6.15         120,895    1,835    6.07
   Investment securities ...........      106,700    1,642   6.16         110,069    1,739    6.32
   Other interest-earning assets ...       31,671      548   6.92          32,826      472    5.75
                                       ----------  -------             ----------  -------
            Total interest-earning
               assets ..............    1,544,810   30,723   7.96       1,459,561   27,046    7.41
                                                   -------                         -------
Noninterest-earning assets..........       82,209                          56,489
                                       ----------                      ----------
            Total assets ...........   $1,627,019                      $1,516,051
                                       ==========                      ==========
Interest-bearing liabilities:
   Savings deposits:
      Passbook and statement
         savings, NOW and money
         market accounts ...........   $  221,153    1,604   2.90      $  247,147    1,839    2.98
      Certificates of deposit ......      726,007   10,086   5.56         767,901   10,144    5.28
                                         --------  -------             ----------  -------
            Total savings deposits..      947,160   11,690   4.94       1,015,048   11,983    4.72
   Borrowed money...................      530,359    7,859   5.93         353,444    4,587    5.19
                                       ----------  -------             ----------  -------
            Total interest-bearing
              liabilities...........    1,477,519   19,549   5.29       1,368,492   16,570    4.84
                                                   -------                         -------

Noninterest-bearing liabilities ....       20,702                          21,782
                                       ----------                      ----------
            Total liabilities ......    1,498,221                       1,390,274
Stockholders' equity ...............      128,798                         125,777
                                       ----------                      ----------
            Total liabilities and
               stockholders' equity.   $1,627,019                      $1,516,051
                                       ==========                      ==========
Net interest income ................               $11,174                         $10,476
                                                   =======                         =======
Interest rate spread ...............                         2.67%                            2.57%
                                                             ====                             ====
Net interest margin ................                         2.89%                            2.87%
                                                             ====                             ====
Ratio of average interest-earning
   assets to average interest-
   bearing liabilities                    104.55%                        106.65%
                                          ======                         ======
<CAPTION>


                                                           Six month period ended June 30,
                                                          ---------------------------------
                                                       2000                              1999
                                                      ------                            ------
                                                                Average                           Average
                                             Average            Yield/        Average             Yield/
                                             Balance   Interest  Cost         Balance   Interest   Cost
                                             -------   --------  ----         -------   --------   ----
                                                                  (Dollars in thousands)

Interest-earning assets:
   Loans receivable ...................    $1,271,283  $51,889    8.16%    $1,154,156   $44,114    7.64%
   Mortgage-backed securities .........       121,326    3,733    6.15         88,484     2,673    6.04
   Investment securities ..............       106,720    3,284    6.15        126,531     4,009    6.34
   Other interest-earning assets ......        30,248    1,014    6.70         38,551     1,011    5.25
                                           ----------  -------             ----------   -------
            Total interest-earning
               assets .................     1,529,577   59,920    7.83      1,407,722    51,807    7.36
                                                       -------                          -------
Noninterest-earning assets.............        79,224                         555,247
                                           ----------                      ----------
            Total assets ..............    $1,608,801                      $1,462,969
                                           ==========                      ==========
Interest-bearing liabilities:
   Savings deposits:
      Passbook and statement
         savings, NOW and money
         market accounts...............    $  219,744    3,149    2.87     $  243,864     3,640    2.98%
      Certificates of deposit .........       730,861   19,860    5.43        776,735    20,636    5.31
                                           ----------  -------             ----------   -------
            Total savings deposits.....       950,605   23,009    4.84      1,020,599    24,276    4.76
   Borrowed money......................       512,346   14,816    5.78        297,790     7,598    5.10
                                           ----------  -------             ----------   -------
            Total interest-bearing
              liabilities..............     1,462,951   37,825    5.17      1,318,389    31,874    4.84
                                                       -------                          -------

Noninterest-bearing liabilities .......        18,382                          19,150
                                           ----------                      ----------
            Total liabilities ......        1,481,333                       1,337,538
Stockholders' equity ...............          127,468                         125,431
                                           ----------                      ----------
            Total liabilities and
               stockholders' equity.       $1,608,801                      $1,462,969
                                           ==========                      ==========
Net interest income ................                   $22,095                         $ 19,933
                                                       =======                          =======
Interest rate spread ...............                              2.66%                            2.53%
                                                                  ====                             ====
Net interest margin ................                              2.89%                            2.83%
                                                                  ====                             ====
Ratio of average interest-earning
   assets to average interest-
   bearing liabilities..............         104.55%                          106.78%
                                             ======                           ======
</TABLE>


                                       11
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

     The following table allocates the period-to-period changes in the Company's
various categories of interest income and expense between changes due to changes
in volume  (calculated  by  multiplying  the  change in  average  volumes of the
related  interest-earning  asset or  interest-bearing  liability category by the
prior year's rate) and changes due to changes in rate (change in rate multiplied
by the prior year's volume).  Changes due to changes in rate/volume  (changes in
rate  multiplied  by  changes  in volume)  have been  allocated  proportionately
between changes in volume and changes in rate.
<TABLE>
<CAPTION>

                                                       Three and six month periods ended June 30, 2000 and 1999
                                                      ----------------------------------------------------------
                                                   Three months of 2000  vs. 1999     Six months of 2000  vs. 1999
                                                  --------------------------------   ------------------------------
                                                     Increase (Decrease) Due to        Increase (Decrease) Due to
                                                     --------------------------        --------------------------
                                                     Volume      Rate       Total      Volume      Rate      Total
                                                     ------      ----       -----      ------      ----      -----
                                                                            (In thousands)
<S>                                                  <C>        <C>        <C>        <C>        <C>        <C>
Interest and dividend income:
   Loans receivable .............................    $ 1,801    $ 1,886    $ 3,687    $ 4,654    $ 3,121    $ 7,775
   Mortgage-backed securities ...................        (12)        23         11      1,010         50      1,060
   Investment securities ........................        (53)       (44)       (97)      (609)      (116)      (725)
   Other interest-earning assets ................        (17)        93         76       (244)       247          3
                                                     -------    -------    -------    -------    -------    -------
            Total interest and dividend income ..      1,719      1,958      3,677      4,811      3,302      8,113
                                                     -------    -------    -------    -------    -------    -------

Interest expense:
   Savings deposits:
      Passbook and statement savings,
         NOW, and money market accounts .........       (188)       (47)      (235)      (350)      (141)      (491)
      Certificates  of deposit ..................       (575)       517        (58)    (1,237)       461       (776)
                                                     -------    -------    -------    -------    -------    -------
            Total savings deposits ..............       (763)       470       (293)    (1,587)       320     (1,267)
   Borrowed money ...............................      2,546        726      3,272      6,091      1,127      7,218
                                                     -------    -------    -------    -------    -------    -------
            Total interest expense ..............      1,783      1,196      2,979      4,504      1,447      5,951
                                                     -------    -------    -------    -------    -------    -------
            Change in net interest income .......    $   (64)   $   762    $   698    $   307    $ 1,855    $ 2,162
                                                     =======    =======    =======    =======    =======    =======
</TABLE>

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED
JUNE 30, 2000 AND 1999

         NET  INCOME.  Net  income  for the  second  quarter  of 2000  increased
$633,000,  or 27.6%, to $2.9 million from $2.3 million for the second quarter of
1999.  Basic and  diluted  earnings  per  share  increased  to $0.31 and  $0.30,
respectively  for the  second  quarter  of 2000  compared  to $0.24  and  $0.24,
respectively, for the comparable period a year ago. Annualized return on average
equity and  annualized  return on average  assets for the second quarter of 2000
were 9.09% and 0.72%, respectively compared to 7.29% and 0.60%, respectively for
the second quarter of 1999.

         NET INTEREST INCOME. Net interest income for the second quarter of 2000
increased $699,000,  or 6.7%, to $11.2 million from $10.5 million for the second
quarter of 1999.  The  increase was  primarily  the result of an increase in the
Company's interest rate spread to 2.67% for the quarter ended June 30, 2000 from
2.57% for the quarter  ended June 30, 1999.  The  increase in the interest  rate
spread was the  result of a 55 basis  point  increase  in the  average  yield on
interest-earning  assets  partially  offset by a 45 basis point  increase in the
average cost of interest-bearing liabilities.

                                       12
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

         INTEREST  AND DIVIDEND  INCOME.  Total  interest  and  dividend  income
increased  $3.7 million,  or 13.6%,  to $30.7 million for the second  quarter of
2000 from $27.0 million for the second  quarter of 1999.  The increase  resulted
from an increase in the average  yield on  interest-earning  assets to 7.96% for
the second  quarter  of 2000 from  7.41% for the  second  quarter of 1999 and an
increase in the average balance of interest-earning assets to $1.54 billion from
$1.46 billion during the same periods.

         Interest income on loans receivable  increased $3.7 million,  or 16.0%,
as the  result of an  increase  in the  average  yield to 8.30%  for the  second
quarter of 2000 from 7.69% for the  second  quarter of 1999 and a $90.5  million
increase  in the average  balance of loans  receivable  between  the  comparable
periods.  Loan  originations  grew 31%, to  approximately  $179  million for the
second quarter of 2000 compared to approximately $137 million for the comparable
period in 1999.  Commercial  real estate and  construction  lending totaled $139
million,  or approximately 78% of total  origination  activity during the second
quarter of 2000 compared to $99 million,  or  approximately  73% during the 1999
quarter.  Loan  repayments  totaled  approximately  $153  million for the second
quarter of 2000 compared to approximately $145 million for the second quarter of
1999.  Loan  purchases  decreased to $23 million for the second  quarter of 2000
compared to $58 million for the second quarter of 1999.

         Combined interest income on all other interest-earning assets decreased
$10,000,  or .2%,  as the  result of a $5.3  million  decrease  in the  combined
average  balance  partially  offset by an increase in the average yield to 6.25%
for the second quarter of 2000 from 6.14% % for the second quarter of 1999.

         INTEREST EXPENSE. Interest expense increased $3.0 million, or 18.0%, to
$19.5  million for the second  quarter of 2000 from $16.6 million for the second
quarter  of 1999 due to an  increase  in  interest  expense  on  borrowed  money
partially offset by a decline in interest expense on savings deposits.  Interest
expense on  borrowed  money  increased  $3.3  million  mainly as the result of a
$176.9  million  increase in the average  balance as the Company  used  borrowed
money to fund asset  growth and deposit  outflows.  Interest  expense on savings
deposits  decreased  $293,000 as the result of a $67.9  million  decrease in the
average balance for the second quarter of 2000 compared to the second quarter of
1999 partially offset by an increase in the average cost to 4.94% from 4.72%.

         PROVISION FOR LOSSES ON LOANS.  The Bank recorded a $325,000  provision
for losses on loans during the three  months ended June 30, 2000  compared to no
provision  during the three months ended June 30, 1999. The allowance for losses
on loans is maintained at a level  considered  adequate to absorb  inherent loan
losses determined on the basis of management's  continuing review and evaluation
of the loan portfolio and its judgement as to the impact of economic  conditions
on the portfolio.  The evaluation by management  includes  consideration of past
loan  loss  experiences  and  trends,  changes  in the  composition  of the loan
portfolio,  the  current  volume  and  condition  of loans  outstanding  and the
probability  of collecting  all amounts due. At June 30, 2000, the allowance for
losses on loans was $7.3 million, which represented .57% of net loans receivable
compared to $6.9 million,  or .56% of net loans receivable at December 31, 1999.
Net loan charge-offs decreased to $8,000 for the second quarter of 2000 compared
to $17,000 for the second quarter of 1999.

                                       13
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

         At  June  30,  2000,  the  ratio  of  nonaccruing  loans  to net  loans
receivable  was .59% compared to .60% at December 31, 1999.  The decrease in the
ratio was due to a $55.4  million,  or 4.5%,  increase  in net loans  receivable
partially  offset by a $265,000  increase in nonaccruing  loans. The increase in
nonaccruing loans was primarily the result of a $498,000 increase in nonaccruing
commercial loans and a $461,000 increase in nonaccruing  residential real estate
loans,  partially  offset by an $843,000  decrease in  nonaccruing  construction
loans.

         NONINTEREST  INCOME.  Total noninterest income increased  $875,000,  or
116.6%,  to $1.6 million for the quarter  ended June 30, 2000 from  $751,000 for
the quarter  ended June 30,  1999.  The  increase  was  primarily  the result of
increases  in income from bank owned life  insurance  ("BOLI"),  gain on sale of
loans,  fees for other  services to customers and servicing and other loan fees.
Income from bank owned life  insurance,  which is included in other  noninterest
income,  increased $318,000 due to the $25 million BOLI purchase during November
1999. Gain on sale of loans increased  $240,000,  or 121.2%, to $438,000 for the
second quarter of 2000 from $198,000 for the second quarter of 1999.  Loan sales
increased to $31.1 million from $14.8 million during the same periods.  Fees for
other services to customers  increased $161,000,  or 48.3%,  primarily due to an
$80,000 increase in ATM fees, a $51,000  increase in commissions  related to the
sale of brokerage products through one of the Bank's subsidiaries, and a $26,000
increase in NOW account  service  charges.  Servicing  and other fees  increased
$128,000, or 74.5%, due primarily to the increase in loan activity and increased
construction lending in particular.

         NONINTEREST EXPENSE.  Noninterest expense increased $398,000,  or 5.4%,
to $7.8  million for the quarter  ended June 30, 2000 from $7.4  million for the
quarter  ended June 30, 1999.  The increase  was  primarily  due to increases in
compensation  and  other  employee   benefits,   occupancy   expense  and  other
noninterest  expense,  partially  offset by  decreases in  advertising  expense,
legal,  examination and other professional fees and federal insurance  premiums.
The efficiency ratio improved to 60.66% for the quarter ended June 30, 2000 from
65.62% for the quarter ended June 30, 1999.

         Compensation and employee  benefits  increased  $553,000,  or 16.2%, to
$4.0  million  for the first  quarter of 2000.  The  increase  was the result of
additional  personnel  hired to implement  the Bank's  expanded  retail  banking
products and services,  expansion into new market areas by the Bank's subsidiary
mortgage  company,  and normal salary  increases.  Occupancy  expense  increased
$372,000,  or 46.0%, to $1.2 million, due primarily to increases in depreciation
expense  as a result of  additional  equipment  and  software  purchases  and an
increase in leasehold expense associated with expansion into new market areas by
the Bank's  subsidiary  mortgage company.  Other  noninterest  expense increased
$209,000,  or 18.0%, to $1.4 million, due primarily due to increases in expenses
associated with ATMs,  which the Bank expanded  significantly  during the second
half of 1999, and expenses  associated  with the Bank's new subsidiary  mortgage
company.  Advertising expense decreased $360,000,  or 49.3%, to $370,000 for the
second quarter of 2000, due primarily to expanded  advertising during the second
quarter of 1999 associated with the Bank's name change.  Legal,  examination and
other  professional  fees  decreased  $274,000,   or  41.7%,  due  primarily  to
approximately  $200,000 of 1999  nonrecurring  expenses related to the agreement
reached with several of the Company's major shareholders  regarding the election
of directors at its June 21, 1999 annual  meeting.  Federal  insurance  premiums
decreased  $102,000,  or 66.8%,  to $51,000  due to a decrease in the balance of
savings deposits and a reduction in the FICO rate


                                       14
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

from 0.0580% to 0.0212%.  These  industry-wide  assessments are used to help pay
interest on certain obligations issued by the Financing  Corporation ("FICO"), a
federal  agency  formed to finance  takeovers  of  insolvent  thrifts.  In 1996,
Congress passed legislation assessing SAIF insured deposits for FICO payments at
a higher rate than  deposits  insured by the BIF.  This  legislation  expired on
December 31, 1999 resulting in a reduction of SAIF assessments.

     INCOME TAX EXPENSE.  The Company  provides for state and federal income tax
expense based upon earnings  before income taxes.  Under the asset and liability
method of accounting  for income  taxes,  the Company  establishes  deferred tax
assets and  liabilities  for the  temporary  differences  between the  financial
reporting  basis and the tax basis of the Company's  assets and  liabilities  at
enacted tax rates  expected to be in effect  when such  amounts are  realized or
settled.  The  effective  tax rate for the three  months ended June 30, 2000 was
37.9% compared to 40.6% for the like period in 1999. The effective tax rates for
2000 and 1999 differ from the statutory  tax rate of 35.0%  primarily due to the
nondeductibility  of the  amortization  of excess  cost over fair  values of net
assets  acquired  and the  excess  of  market  value  over  cost of ESOP  shares
amortized.  The decrease in the effective tax rate was primarily the result of a
decrease in the excess of market value over cost of ESOP shares amortized caused
by a 12.7 % decline in the average  market value of the  Company's  common stock
between the respective periods and to an increase in tax exempt income from BOLI
purchased in November 1999.

COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED
JUNE 30, 2000 AND 1999

     NET INCOME.  Net income for the six months  ended June 30,  2000  increased
22.8%, to $5.8 million from $4.7 million for the six months ended June 30, 1999.
Basic and diluted earnings per share increased to $0.61 and $0.60,  respectively
for the six months ended June 30, 2000 compared to $0.50 and $0.49, respectively
for the comparable  period a year ago.  Annualized  return on average equity and
annualized  return on average assets for the six months ended June 30, 2000 were
9.10% and 0.72%,  respectively compared to 7.53% and 0.65%, respectively for the
six months ended June 30, 1999.

     NET INTEREST INCOME.  Net interest income for the six months ended June 30,
2000 increased $2.2 million,  or 10.8%,  to $22.1 million from $19.9 million for
the six months ended June 30,  1999.  The increase was the result of an increase
in the Company's interest rate spread to 2.66% for the six months ended June 30,
2000 from 2.53% for the six months  ended June 30, 1999,  partially  offset by a
$22.7 million  decrease in the average balance of net  interest-earning  assets.
The increase in the interest  rate spread was primarily the result of a 47 basis
point increase in the average yield on interest-earning  assets partially offset
by  a  33  basis  point  increase  in  the  average  cost  of   interest-bearing
liabilities.

     INTEREST AND DIVIDEND INCOME.  Total interest and dividend income increased
$8.1 million,  or 15.7%, to $59.9 million for the six months ended June 30, 2000
from $51.8 million for the six months ended June 30, 1999. The increase resulted
from a $121.9 million increase in the average balance of interest-earning assets
to $1.53  billion for the six months ended June 30, 2000 from $1.41  billion for
the six months  ended June 30,  1999 and an  increase  in the  average  yield on
interest-earning assets to 7.83% from 7.36% during the same periods.

                                       15
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

         Interest income on loans receivable  increased $7.8 million,  or 17.6%,
as the  result of a $117.1  million  increase  in the  average  balance of loans
receivable  between the comparable  periods and an increase in the average yield
to 8.16% for the six months  ended  June 30,  2000 from 7.64% for the six months
ended June 30, 1999.

         Combined interest income on all other interest-earning assets increased
$337,000, or .1%, as the result of an increase in the average yield to 6.22% for
the six months  ended June 30, 2000  compared to 6.07% for the six months  ended
June 30, 1999 and a $4.7 million increase in the combined average balance.

         INTEREST EXPENSE. Interest expense increased $6.0 million, or 18.7%, to
$37.8  million for the six months ended June 30, 2000 from $31.9 million for the
six  months  ended  June 30,  1999 due to an  increase  in  interest  expense on
borrowed  money  partially  offset by a decline in  interest  expense on savings
deposits.  Interest  expense on borrowed  money  increased  $7.2  million as the
result of a $214.6  million  increase in the average  balance and an increase in
the average  cost to 5.78% for the six months ended June 30, 2000 from 5.10% for
the six  months  ended June 30,  1999.  Interest  expense  on  savings  deposits
decreased $1.3 million as the result of a $70.0 million  decrease in the average
balance partially offset by an increase in the average cost to 4.84% for the six
months ended June 30, 2000 from 4.76% for the six months ended June 30, 1999.

         PROVISION FOR LOSSES ON LOANS.  The Bank recorded a $625,000  provision
for losses on loans  during the six months  ended June 30,  2000  compared to no
provision during the six months ended June 30, 1999. The allowance for losses on
loans is  maintained  at a level  considered  adequate to absorb  inherent  loan
losses determined on the basis of management's  continuing review and evaluation
of the loan portfolio and its judgement as to the impact of economic  conditions
on the portfolio.  The evaluation by management  includes  consideration of past
loan  loss  experiences  and  trends,  changes  in the  composition  of the loan
portfolio,  the  current  volume  and  condition  of loans  outstanding  and the
probability  of collecting  all amounts due. Net loan  charge-offs  increased to
$237,000, or .02% of average loans, for the first six months of 2000 compared to
$22,000,  or .002% of  average  loans,  for the  first six  months of 1999.  The
increase in net loan  charge-offs was due primarily to a $199,000  charge-off on
eight single-family  residential  properties acquired through foreclosure during
the first quarter of 2000.

         NONINTEREST INCOME. Total noninterest income increased $1.6 million, or
104.5%, to $3.1 million for the six months ended June 30, 2000 from $1.5 million
for the six months ended June 30, 1999. The increase was primarily the result of
increases  in income from bank owned life  insurance,  servicing  and other loan
fees,  fees for other  services to customers,  gain on sale of loans and gain on
real estate operations. Income from bank owned life insurance, which is included
in other  noninterest  income,  increased  $633,000  due to the $25 million BOLI
purchase during November 1999.  Servicing and other fees increased $359,000,  or
107.2%,   due   primarily  to  the  increase  in  loan  activity  and  increased
construction  lending  in  particular.  Fees for  other  services  to  customers
increased $343,000, or 59.3%,  primarily due to a $143,000 increase in ATM fees,
a $109,000  increase in  commissions  related to the sale of brokerage  products
through one of the Bank's  subsidiaries,  and an $84,000 increase in NOW account
service charges. Gain on sale of loans increased $243,000, or 54.5%, to $688,000
for the six months  ended June 30, 2000 from  $445,000  for the six months ended
June 30, 1999 as the result of an increase in


                                       16
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

loan sales to $50.1  million from $34.3 million  during the same  periods.  Real
estate operations increased$95,000 primarily due to an $18,000 write-down on one
foreclosed  property  during the six  months  ended June 30,  2000  compared  to
$171,000 in write-downs  on three  foreclosed  properties  during the six months
ended June 30, 1999.

     NONINTEREST EXPENSE.  Noninterest expense increased $1.8 million, or 13.0%,
to $15.2  million for the six months ended June 30, 2000 from $13.5  million for
the six months ended June 30, 1999.  The increase was primarily due to increases
in compensation and employee  benefits,  occupancy expense and other noninterest
expense,   partially  offset  by  decreases  in  legal,  examination  and  other
professional  fees,  advertising  expense and federal  insurance  premiums.  The
efficiency  ratio improved to 60.47% for the six months ended June 30, 2000 from
62.86% for the six months ended June 30, 1999.

     Compensation and employee  benefits  increased $1.3 million to $7.8 million
for the six  months  ended June 30,  2000.  The  increase  in  compensation  and
employee  benefits was  primarily the result of  additional  personnel  hired to
implement the Bank's  expanded retail banking  products and services,  expansion
into new market  areas by the Bank's  subsidiary  mortgage  company,  and normal
salary increases.  Occupancy expense increased  $651,000,  to $2.2 million,  due
primarily  to  increases  in  depreciation  expense  as a result  of  additional
equipment and software purchases and an increase in leasehold expense associated
with expansion into new market areas by the Bank's subsidiary  mortgage company.
Other noninterest expense increased $451,000, to $2.7 million, due primarily due
to  increases  in  expenses  associated  with  ATMs,  which  the  Bank  expanded
significantly  during the second half of 1999, and expenses  associated with the
Bank's  new  subsidiary   mortgage   company.   Legal,   examination  and  other
professional fees decreased $259,000 due primarily to approximately  $200,000 of
1999 nonrecurring  expenses related to the agreement reached with several of the
Company's major shareholders regarding the election of directors at its June 21,
1999 annual meeting.  Advertising expense decreased $221,000,  to $639,000,  due
primarily to expanded  advertising  during the second quarter of 1999 associated
with the Bank's name change.  Federal insurance premiums decreased $211,000,  to
$103,000,  due to a decrease in the balance of savings  deposits and a reduction
in the FICO rate from 0.0580% to 0.0212%.

     INCOME TAX EXPENSE.  The Company  provides for state and federal income tax
expense based upon earnings  before income taxes.  Under the asset and liability
method of accounting  for income  taxes,  the Company  establishes  deferred tax
assets and  liabilities  for the  temporary  differences  between the  financial
reporting  basis and the tax basis of the Company's  assets and  liabilities  at
enacted tax rates  expected to be in effect  when such  amounts are  realized or
settled. The effective tax rate for the six months ended June 30, 2000 was 37.9%
compared to 40.8% for the like period in 1999.  The effective tax rates for 2000
and 1999  differ  from the  statutory  tax  rate of 35.0%  primarily  due to the
nondeductibility  of the  amortization  of excess  cost over fair  values of net
assets  acquired  and the  excess  of  market  value  over  cost of ESOP  shares
amortized.  The decrease in the effective tax rate was primarily the result of a
decrease in the excess of market value over cost of ESOP shares amortized caused
by a 15.5 % decline in the average  market value of the  Company's  common stock
between the respective periods and to an increase in tax exempt income from BOLI
purchased in November 1999.

                                       17
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

NONPERFORMING ASSETS

Summarized below are nonperforming assets at June 30, 2000 and December 31, 1999

<TABLE>
<CAPTION>

                                                                               June 30,           December 31,
                                                                                 2000                1999
                                                                                 ----                ----
                                                                               (dollars in thousands)

                  <S>                                                         <C>                    <C>
                  Restructured loans                                          $  1,113               1,022
                                                                                 -----               -----

                  Nonaccruing loans:
                      Residential real estate                                  $ 3,770               3,308
                      Commercial real estate                                     2,618               2,506
                      Construction                                                 497               1,340
                      Commercial                                                   714                 216
                      Consumer                                                      98                  75
                                                                               -------              ------
                           Total nonaccruing loans                               7,697               7,445
                           Applicable allowance for losses                        (890)               (903)
                                                                                ------             -------
                           Nonaccruing loans, net                                6,807               6,542
                                                                                 -----               -----

                  Foreclosed real estate, net                                    1,466               1,522
                                                                                 -----               -----

                  Nonperforming assets, net                                    $ 9,386               9,086
                                                                                 =====               =====

                  Nonperforming assets, net as a
                      percentage of total assets                                  0.57%               0.57%
                                                                                  ====                ====
</TABLE>

         Total  nonperforming  assets increased $300,000 to $9.4 million at June
30, 2000 from $9.1  million at December  31, 1999  primarily  as the result of a
$498,000  increase in nonaccruing  commercial  loans and a $461,000  increase in
nonaccruing  residential  real  estate  loans,  partially  offset by an $843,000
decrease  in  nonaccruing   construction  loans.  The  increase  in  nonaccruing
commercial  loans was  primarily  due to a $461,000  loan  secured  by  business
equipment in Dallas,  Texas. The increase in nonaccruing  residential  loans was
due to an increase in the average principal  balance per loan,  partially offset
by a net reduction of six single-family permanent loans classified as nonaccrual
during the first six months of 2000.

         At June 30, 2000,  the Company had  twenty-eight  loans  totaling  $4.8
million  that were more than 90 days past the  maturity  date stated in the note
with  regard to  principal  repayment.  The  Company  has  continued  collecting
interest  payments  on the loans which were less than 90 days past due and still
accruing  interest.  Loans are generally placed on nonaccrual status when either
principal  or  interest  is more  than 90 days  past  due or at such  time  when
management  concludes  that payment in full is not likely,  whichever is sooner.
Any subsequent interest payments received are recorded as interest income in the
period received.

                                       18
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

         Impaired loans, which are represented by loans on nonaccrual status and
loans  where  management  believes  it is  probable  that they will be unable to
collect  principal and interest under the contractual  terms of the loans,  were
$7.7  million  and  $7.4  million  at June  30,  2000  and  December  31,  1999,
respectively.  At June 30,  2000,  $2.4  million of impaired  loans had specific
reserves of $890,000  and the  remaining  impaired  loans of $5.3 million had no
specific  reserves.  At December  31, 1999,  $3.8 million of impaired  loans had
specific  reserves of $1.0  million  and the  remaining  impaired  loans of $4.5
million had no specific  reserves.  The increase in impaired loans was primarily
due to a $251,000  increase in  nonaccrual  loans during the first six months of
2000.

         Activity in the allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>

                                                                            Six months ended June 30,
                                                                            2000                1999
                                                                            ----                ----

         <S>                                                             <C>                   <C>
         Balance at beginning of period                                  $ 6,937,900           6,659,294
         Provision charged to expense                                        625,000                -
         Recoveries                                                            -                     344
         Charge-offs                                                        (236,527)            (21,754)
                                                                           ---------           ---------
         Balance at end of period                                        $ 7,326,373           6,637,884
                                                                           =========           =========
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

         The Company  currently has no business other than that of the Jefferson
Heritage. The Company is dependent on future earnings,  dividends from Jefferson
Heritage,  or borrowings for sources of funds.  Jefferson Heritage is subject to
certain  regulatory  limitations with respect to the payment of dividends to the
Company.

         The capital  regulations  of the OTS  require  thrift  institutions  to
maintain  tangible  capital equal to 1.5% of total adjusted assets, a minimum 3%
leverage  (core  capital)  ratio,  and  an  8%  risk-based  capital  ratio.  The
risk-based capital  requirement is calculated based on the credit risk presented
by  both   on-balance-sheet   assets  and   off-balance-sheet   commitments  and
obligations.  Assets  are  assigned  a  credit-risk  weighting  based upon their
relative  risk ranging from 0% for assets backed by the full faith and credit of
the United  States or that pose no credit  risk to the  institution  to 100% for
assets such as delinquent or repossessed assets. As of June 30, 2000,  Jefferson
Heritage met all OTS capital requirements.

         Jefferson  Heritage is also subject to the capital-based  framework for
prompt corrective action. To be categorized as well capitalized,  an institution
must maintain minimum total risk-based,  Tier I risk-based,  and Tier I leverage
ratios as set forth in the table below. For purposes of this regulation,  Tier I
capital has the same definition as core capital. As of June 30, 2000,  Jefferson
Heritage was considered well capitalized.


                                       19
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

         Following  are the actual and  required  capital  amounts and ratios of
Jefferson Heritage as of June 30, 2000:
<TABLE>
<CAPTION>

                                                                                                Prompt corrective
                                                                                              action requirements -
                                       Actual                      Requirements                 well capitalized
                                      --------                    --------------               ------------------
                                 Amount         Ratio          Amount          Ratio          Amount         Ratio
                                 ------         -----          ------          -----          ------         -----

<S>                          <C>                <C>          <C>               <C>          <C>               <C>
Tangible capital: (1)        $ 116,822,431      7.19%        $ 24,369,741      1.50%                  NA

Core capital: (1)              116,822,431      7.19%          48,739,482      3.00%        $ 81,232,471      5.00%

Risk-based capital: (2)        123,195,009     11.28%          87,361,970      8.00%         109,202,463     10.00%

Tier I capital: (2)            116,822,431     10.70%                  NA                     65,521,478      6.00%
<FN>

(1)  To adjusted total assets
(2)  To risk-weighted assets
</FN>
</TABLE>

         Jefferson  Heritage  is  required  by federal  regulations  to maintain
specified levels of liquid assets,  consisting of cash and eligible investments.
The  current  level  of  liquidity  required  by the OTS is 4% of the sum of net
withdrawable deposits and borrowings due within one year. Jefferson Heritage has
consistently  maintained  liquidity  in excess of  required  amounts.  Jefferson
Heritage's  liquidity  ratio was 18.21% and 19.42% at June 30, 2000 and December
31, 1999, respectively.

         The  Company's  primary  sources of funds are  deposits,  principal and
interest  payments  on  loans  and  mortgage-backed  securities,  proceeds  from
maturing  investment  securities  and cash flows from  operations.  In addition,
Jefferson Heritage has substantial borrowing capacity with the Federal Home Loan
Bank and the ability to borrow against it's investment portfolio.

         The principal uses of funds by the Company  include the origination and
purchase  of  loans  secured  by real  estate  and the  purchase  of  investment
securities and mortgage-backed securities.

         Cash flows used by investing  activities  totaled $47.2 million  during
the first six months of 2000. Cash flows from these investing activities,  which
consisted  primarily  of $285.9  million in  principal  repayments  on loans and
mortgage-backed  securities were used primarily to fund the Company's  investing
activities of originating and purchasing loans, purchasing stock in the FHLB and
purchasing investment securities during the six months ended June 30, 2000.

         The Company anticipates that it will have sufficient funds available to
meet its current  commitments.  At June 30, 2000, the Company had commitments to
originate  loans totaling $85.1 million,  to purchase  residential  mortgages of
$1.3 million and to sell loans of $28.8 million.  Certificates  of deposit which
are  scheduled  to mature in one year or less at June 30,  2000  totaled  $635.5
million.  Management  believes that a significant  portion of such deposits will
remain with the Company.

                                       20
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

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

IMPACT OF INFLATION AND CHANGING PRICES

         The  consolidated  financial  statements  and notes  thereto  presented
herein have been  prepared in  accordance  with  generally  accepted  accounting
principles,  which generally  require the measurement of financial  position and
operating results in terms of historical dollars without considering the changes
in the relative purchasing power of money over time due to inflation. The impact
of inflation is reflected in the increased cost of the Company's operations.

         Unlike most industrial  companies,  nearly all of the Company's  assets
and  liabilities  are  monetary in nature.  As a result,  interest  rates have a
greater  impact on the  Company's  performance  than do the  effects  of general
levels  of  inflation.  Interest  rates  do not  necessarily  move  in the  same
direction nor to the same extent as the prices of goods and services.

IMPACT OF NEW ACCOUNTING STANDARDS

         Accounting for Derivative  Instruments and Hedging Activities.  In June
1998, the FASB issued SFAS No. 133,  "Accounting for Derivative  Instruments and
Hedging  Activities",  which establishes  standards for derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities. SFAS No. 133 requires an entity to recognize all derivatives
as either  assets or  liabilities  in the  statement of  financial  position and
measure those  instruments at fair value. In June 1999, the FASB issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
the Effective  Date of FASB Statement No. 33, an amendment of FASB Statement No.
133",  which defers the effective  date of SFAS 133 from fiscal years  beginning
after June 15,  1999 to fiscal  years  beginning  after June 15,  2000.  Earlier
application of SFAS No. 133, as amended, is encouraged but should not be applied
retroactively to financial  statements of prior periods.  In June 2000, the FASB
issued SFAS No. 138, "Accounting for Certain Derivative  Instruments and Certain
Hedging  Activities,  an amendment  of FASB  Statement  No.  133".  SFAS No. 138
addresses a limited number of issues  causing  implementation  difficulties  for
numerous  entities that apply SFAS No. 133. The Company is currently  evaluating
the requirements and impact of SFAS No. 133, as amended.



                                       21
<PAGE>

                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                    Quantitative and Qualitative Disclosures
                                About Market Risk

         The  Company's  principal  market  risk  continues  to  consist  of its
exposure to changes in interest  rates.  The primary  component of the Company's
net income is derived from the spread between  interest-earning asset yields and
the  cost  of  interest-bearing   liabilities.   In  a  changing  interest  rate
environment this spread can widen or narrow depending on the relative  repricing
and maturities of interest-earning  assets and interest-bearing  liabilities.  A
principal  strategy of the Company has been to achieve  acceptable  net interest
margins  while  managing  the  sensitivity  of its  earnings  to  interest  rate
fluctuations by matching more closely the cash flows and effective maturities or
repricings of its interest-sensitive assets and liabilities.

         The  Company's  interest  rate  sensitivity  is monitored by management
through the use of a model, which internally  generates  estimates of the change
in the  Company's  net  portfolio  value  ("NPV") over a range of interest  rate
scenarios.  NPV is the  present  value  of  expected  cash  flows  from  assets,
liabilities,  and off balance sheet contracts. The NPV ratio, under any interest
rate  scenario,  is  defined as the NPV in that  scenario  divided by the market
value of assets in the same scenario.  The OTS also produces a similar  analysis
using its own model based upon data submitted on the quarterly  Thrift Financial
Reports  filed by the  Bank.  The  results  of the OTS  model  may vary from the
Company's internal model due to differences in assumptions  utilized,  including
loan  prepayment  rates,  reinvestment  rates  and  deposits  decay  rates.  The
following table sets forth the Company's NPV under the internal model as of June
30, 2000:
<TABLE>
<CAPTION>

                                                                                          NPV as % of
                                           Net portfolio value                     portfolio value of assets
                                          ---------------------                    -------------------------
   Change in interest rates                        Dollar      Percent                NPV       Change (in
in basis points (rate shock)         Amount        change      change                ratio     basis points)
----------------------------         ------        ------      ------                -----     -------------
                                                           (Dollars in thousands)
   <S>                             <C>           <C>           <C>                   <C>            <C>
   + 300 ......................    $  71,476     $ (57,575)    (44.6%)               4.61%          (335)
   + 200 ......................       97,240       (34,811)    (24.6%)               6.17%          (179)
   + 100 ......................      114,018       (15,033)    (11.6%)               7.12%           (83)
   Static .....................      129,051           --       --                   7.96%          --
   - 100 ......................      139,059        10,008       7.7%                8.49%            53
   - 200 ......................      142,457        13,406      10.4%                8.65%            70
   - 300 ......................      136,946         7,895       6.1%                8.28%            32
</TABLE>

         Certain  shortcomings are inherent in the methodology used in the above
interest rate risk  measurements.  Modeling changes in NPV require the making of
certain  assumptions,  which may or may not reflect  the manner in which  actual
yields and costs respond to changes in market  interest  rates.  In this regard,
the NPV model presented  assumes that the composition of the Company's  interest
sensitive  assets and liabilities  existing at the beginning of a period remains
constant  over the period  being  measured  and also  assumes  that a particular
change  in  interest  rates  is  reflected  uniformly  across  the  yield  curve
regardless  of the  duration  to maturity or  repricing  of specific  assets and
liabilities. Accordingly, although the NPV measurements provide an indication of
the Company's  interest rate risk exposure at a particular  point in time,  such
measurements  are not  intended to and do not provide a precise  forecast of the
effect of changes in market  interest rates on the Company's NPV and will differ
from actual results.

                                       22
<PAGE>
                         JEFFERSON SAVINGS BANCORP, INC.
                                 AND SUBSIDIARY

                    Quantitative and Qualitative Disclosures
                                About Market Risk

         Income  simulation  analysis  captures the potential and probability of
the  maturity  and  repricing  of  assets  and  liabilities.   Moreover,  income
simulation  analysis measures the relative  sensitivities of these balance sheet
items and projects their behavior over an extended period of time. Also,  income
simulation analysis permits management to assess the probable effects on balance
sheet items of interest rate changes and management strategies that address such
changes.  For these reasons, the Company relies primarily upon income simulation
analysis in measuring and managing exposure to interest rate risk.


                                       23
<PAGE>
                           PART II - OTHER INFORMATION

Item 1.        Legal Proceedings
               -----------------

               Not applicable.

Item 2.        Changes in Securities and Use of Proceeds
               -----------------------------------------

               Not applicable.

Item 3.        Defaults Upon Senior Securities
               -------------------------------

               Not applicable.

Item 4.        Submission of Matters to a Vote of Security Holders
               ---------------------------------------------------

               Not applicable.

Item 5.        Other Information
               -----------------

               Not applicable.

Item 6.        Exhibits and Reports on Form 8-K
               --------------------------------

               (a)  Exhibits.  The following is a list of exhibits filed as part
                    of this Quarterly Report on Form 10-Q:

                    No.      Description

                    3.1      Certificate of Incorporation                     *
                    3.2      Bylaws                                          **
                    4.1      Specimen Stock Certificate                     ***
                    4.2      Rights Agreement, dated August 17, 1994,
                             between Jefferson Savings Bancorp, Inc. and
                             Boatmen's Trust Company                       ****
                    10.1     Jefferson Heritage Bank Year 2000 Bonus Plan
                    27       Financial Data Schedule (EDGAR only)
---------------
*    Incorporated  by reference  from  Registration  Statement on Form S-1 filed
     December 23, 1992 (File No. 33-56324).
**   Incorporated  by  reference  from  Quarterly  Report  on Form  10-Q for the
     quarter  ended  June  30,  1999.
***  Incorporated  by reference  from  Registration  Statement on Form 8-A filed
     March 30, 1993 (File No. 0-21466).
**** Incorporated  by reference  from  Registration  Statement on Form 8-A filed
     August 19, 1994 (File No. 0-21466).

               (b)  Reports on Form 8-K. The Registrant did not file any Current
                    Reports on Form 8-K during the quarter ending June 30, 2000.



                                       24
<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  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.


                                       JEFFERSON SAVINGS BANCORP, INC.
                                       Registrant



Date:  August 14, 2000                 /s/ Paul J. Milano
                                       ------------------------------------
                                       Paul J. Milano
                                       Senior Vice President and Chief Financial
                                       Officer
                                       (Duly Authorized Representative and
                                       Principal Financial Officer)




                                       25