EXHIBIT 13


                       2002 ANNUAL REPORT TO STOCKHOLDERS


<PAGE>

                               2002 ANNUAL REPORT

                         LEXINGTON B & L FINANCIAL CORP.


<PAGE>
LEXINGTON B & L FINANCIAL CORP.

2002  ANNUAL  REPORT




TABLE  OF  CONTENTS

Message  to  Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business  of  the  Corporation . . . . . . . . . . . . . . . . . . . . . . . . 2
Common  Stock  Information . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Selected  Consolidated  Financial  Information . . . . . . . . . . . . . . . . 3
Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . . . 6
Independent  Auditors'  Report . . . . . . . . . . . . . . . . . . . . . . .  13
Consolidated  Statements  of  Financial  Condition . . . . . . . . . . . . .  14
Consolidated Statements of Stockholders' Equity And
Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
Consolidated  Statements  of  Income . . . . . . . . . . . . . . . . . . . .  16
Consolidated  Statements  of  Cash  Flows. . . . . . . . . . . . . . . . . .  17
Notes  to  Consolidated  Financial  Statements . . . . . . . . . . . . . . .  19
Directors  and  Officers . . . . . . . . . . . . . . . . . . . . . . . . . .  36
Corporate  Information . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
Stockholder  Information . . . . . . . . . . . . . . . . . . . . . . . . . .  39


<PAGE>
MESSAGE  TO  STOCKHOLDERS


Message  To  Our  Stockholders:


Lexington  B  &  L  Financial  Corp.  completed a year of record earnings during
fiscal  year  ending  September  30,  2002.  Earnings  totaled  $888  thousand
representing  an  increase  of  45.9%,  while diluted earnings per share totaled
$1.23,  which  is  an  increase  of  46.4%  over  last year.  Our loan portfolio
increased  $2.7  million  to  $75.2  million.  Our investment in mortgage-backed
securities  increased investment securities $5.7 million or 18.5%.  Although our
total  deposits decreased $4.7 million as a result of lower interest rates, FHLB
advances  were  utilized  to fund the increase in the earning asset base.  Total
assets  grew  to  $131.4  million,  an  increase  of  4.0%,  and  the  return on
stockholders  equity  increased  to  6.0%.

Stockholders'  equity increased to $14.8 million at September 30, 2002, which is
equivalent  to  a  tangible  book  value of $19.24 per share.  We paid a regular
dividend of $0.30 per share.  A special dividend of $0.10 per share was declared
in  October  2002  in  response to the Board's recognition of a successful year.
Dividend  payout  considering  the regular and special dividend equaled 32.5% of
diluted  earnings  per  share.

During the year the Board has been working on a strategic plan for the direction
of  the  Company  over  the  next  five  years.  The  strategic  objectives were
established  around  the  following  adopted  mission  statement:

"To be a community-oriented financial institution committed to being a leader in
service  and  meeting  the  financial  needs  of all the constituents, including
individuals,  small  business and farms, in the markets we serve through a broad
range  of  financial  products  and  services;  while dedicated to enhancing the
return  and  value  of  our  stockholders'  investment."

One  of  the  strategic  objectives  developed  in  the  planning process was to
increase  market  penetration  through  expansion.  Your  Board  is  currently
reviewing  the  opening of a new branch and we hope that within the next several
months  we can announce its location.  Also, the payment of the special dividend
was  the  result  of adopting the strategic objective to share with stockholders
the  financial  rewards  of  owning  Lexington  B  &  L  Financial  Corp  stock.

The  current  year  will  present  a  challenge  for  management.  We  expect  a
continuation  of  low  interest  rates,  and  maintaining  our  current level of
interest  spread  and margin will require close monitoring.  Further declines in
yields  on  adjustable  rate  loans  should  be  offset by repricing of maturing
certificates  of  deposit.  Because  of  our  large  equity  base,  we  have the
opportunity  to  continue  to increase the volume of earning assets, which would
benefit  net  income.  The  majority of our loans continue to be adjustable rate
loans,  which  will  assist  us in maintaining net interest earnings if interest
rates  should  rise.

Thank you for your continued support.

Sincerely


William J. Huhmann                                                  Steva Vialle
President and Chief Financial Officer                    Chief Executive Officer


                                      -1-
<PAGE>
BUSINESS  OF  THE  CORPORATION

Lexington  B  &  L  Financial  Corp. ("Company"), a Missouri corporation, is the
holding  company  for  B  &  L  Bank  ("B&L").  The  Company  also  owns  a
mortgage-banking  subsidiary,  B  &  L  Mortgage,  Inc. ("MTG").  MTG originates
residential mortgages for resale in the secondary mortgage market.  At September
30,  2002,  the  Company  had  total  consolidated  assets of $131.4 million and
consolidated  stockholders'  equity  of  $14.8  million.

The  Company  is  not  engaged  in  any significant business activity other than
holding the stock of B&L and MTG. Accordingly, the information set forth in this
report,  including  financial  statements and related data, applies primarily to
the  operations  of  its  banking  and  mortgage  banking  subsidiaries.

B&L  is  a  federal  stock  savings  bank, originally organized in 1887.  B&L is
regulated  by the Office of Thrift Supervision ("OTS").  The deposits of B&L are
insured  up  to  applicable limits by the FDIC and it is a member of the Federal
Home  Loan  Bank  ("FHLB")  System.

The  Company's  banking  subsidiary  operates  as a community-oriented financial
institution  devoted  to  serving  the  needs  of  its  customers  in Lexington,
Wellington  and  Callao,  Missouri  and nearby communities.  B&L Bank's business
consists  primarily  of  attracting  deposits  from the general public and using
those  funds  to  originate residential real estate, commercial, agriculture and
consumer  loans.

COMMON  STOCK  INFORMATION

The  Company's  common  stock  is traded on the Nasdaq SmallCap Market under the
symbol  "LXMO".  As  of  September  30,  2002,  there  were  approximately  300
stockholders of record and 726,952 shares of common stock outstanding (including
unreleased  Employee  Stock Ownership Plan ("ESOP") shares of 35,780).  Dividend
payments  by  the  Company  are dependent primarily on dividends received by the
Company  from  its  banking  subsidiary.  Under  federal regulations, the dollar
amount  of  dividends  B&L  may  pay  is dependent upon its capital position and
recent  net  income.  However,  B&L  may  not  declare  or pay a dividend on, or
repurchase  any  of,  its  common  stock  if  the effect thereof would cause the
regulatory  capital  of  the institution to be reduced below the amount required
for  the  liquidation  account  which  was  established  in  accordance with OTS
regulations.  The Company also has certain dividend limitations applicable under
Missouri  law  that prohibits it from declaring or paying dividends when its net
assets  are  less  than  its stated capital or when the payment of any dividends
would  reduce  its  net  assets  below  its  stated  capital.

The  following  table  sets forth the market price range of the Company's common
stock and dividends paid for the years ended September 30, 2002 and 2001.  Share
price  information  was  provided  by  the  Nasdaq  Stock  Market.
<TABLE>
<CAPTION>

                        Fiscal 2002               Fiscal 2001
                --------------------------  --------------------------
                 High    Low    Dividends    High    Low    Dividends
                ------  ------  ----------  ------  ------  ----------
<S>             <C>     <C>     <C>         <C>     <C>     <C>
First Quarter   $13.00  $12.05  $      ---  $12.50  $11.00  $      ---
Second Quarter  $13.80  $12.40  $     0.15  $13.00  $11.19  $     0.15
Third Quarter   $16.20  $13.01  $      ---  $13.00  $12.25  $      ---
Fourth Quarter  $16.10  $14.20  $     0.15  $13.00  $12.10  $     0.15
</TABLE>


                                      -2-
<PAGE>
SELECTED  CONSOLIDATED  FINANCIAL  INFORMATION


The  following  table sets forth certain information concerning the consolidated
financial position and results of operations of the Company at and for the dates
indicated.  The consolidated data is derived in part from, and should be read in
conjunction  with,  the Consolidated Financial Statements of the Company and its
subsidiaries  presented  herein.

<TABLE>
<CAPTION>
                                                                      AT SEPTEMBER 30,
                                                       -----------------------------------------------
                                                         2002      2001      2000      1999     1998
                                                       --------  --------  --------  --------  -------
                                                                   (Dollars in Thousands)
<S>                                                    <C>       <C>       <C>       <C>       <C>
SELECTED FINANCIAL CONDITION DATA:

Total assets                                           $131,423  $126,389  $107,687  $106,693  $93,761
Loans receivable, net                                    75,215    72,504    64,680    62,126   62,315
Investment securities                                    36,525    30,811    30,021    32,700   17,338
Cash and interest-bearing deposits(1)                     9,016    13,251     4,746     6,091    8,985
FHLB stock                                                1,017       618       543       535      520
Deposits                                                 95,386   100,129    85,338    85,150   76,764
Advances from FHLB                                       20,164    10,337     7,003     5,162      ---
Stockholders' equity                                     14,778    14,555    13,944    15,110   15,593


                                                                   YEAR ENDED SEPTEMBER 30,
                                                       -----------------------------------------------
                                                         2002      2001      2000      1999     1998
                                                       --------  --------  --------  --------  -------
                                                       (Dollars in Thousands, Except Per Share Amounts)
SELECTED OPERATING DATA:

Interest income                                        $  7,924  $  8,154  $  7,640  $  7,337  $ 6,997
Interest expense                                          4,545     5,108     4,374     4,282    3,776
                                                       --------  --------  --------  --------  -------
  Net interest income                                     3,379     3,046     3,266     3,055    3,221

Provision for loan losses                                   108       144        70        37       26
                                                       --------  --------  --------  --------  -------
  Net interest income after provision for loan losses     3,271     2,902     3,196     3,018    3,195

Noninterest income                                          512       576       465       403      305
Noninterest expense                                       2,485     2,758     2,441     2,438    2,483
                                                       --------  --------  --------  --------  -------

  Income before income taxes                              1,298       720     1,220       983    1,017

Income taxes                                                410       111       385       323      358
                                                       --------  --------  --------  --------  -------

  Net income                                           $    888  $    609  $    835  $    660  $   659
                                                       ========  ========  ========  ========  =======

Basic income per share                                 $   1.25  $   0.85  $   1.12  $   0.74  $  0.68
                                                       ========  ========  ========  ========  =======

Diluted income per share                               $   1.23  $   0.84  $   1.10  $   0.72  $  0.66
                                                       ========  ========  ========  ========  =======

Dividends per share                                    $   0.30  $   0.30  $   0.30  $   0.30  $  0.30
                                                       ========  ========  ========  ========  =======
</TABLE>


                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                                                              AT OR FOR THE YEAR ENDED SEPTEMBER 30,
                                                            ------------------------------------------
                                                             2002    2001     2000     1999     1998
                                                            ------  -------  -------  -------  -------
<S>                                                         <C>     <C>      <C>      <C>      <C>
KEY OPERATING RATIOS:

PERFORMANCE RATIOS:
Return on average assets (net income divided by
 average assets)                                             0.66%    0.52%    0.79%    0.63%    0.70%
Return on average equity (net income divided by
 average equity)                                             6.03     4.25     5.93     4.20     4.00
Interest rate spread (difference between average yield
 on interest-earning assets and average cost of interest-
 bearing liabilities)                                        2.09     2.20     2.60     2.26     2.63
Net interest margin (net interest income to
 average interest-earning assets)                            2.68     2.83     3.32     3.10     3.64
Noninterest expense to assets                                1.89     2.18     2.27     2.29     2.65
Average interest-earning assets to interest-bearing
 Liabilities                                                  116      114      116      119      124
Dividend payout ratio (dividends paid divided by
 net income per share-basic)                                24.00    35.29    29.79    40.54    44.12

ASSET QUALITY RATIOS:
Allowance for loan losses to total loans receivable at
 end of period                                               0.98     0.98     0.99     0.96     0.95
Net charge offs to average outstanding loans
 receivable during the period                                0.12     0.11     0.03     0.06     0.06
Non-performing assets to total assets (2)                    0.34     0.55     0.41     0.43     0.56

CAPITAL RATIOS:
Equity to total assets at end of period                     11.24    11.52    12.95    14.16    16.63
Average equity to average assets                            10.95    12.30    13.38    15.08    17.58


                                                                          AT SEPTEMBER 30,
                                                            ------------------------------------------
                                                             2002     2001     2000     1999     1998
                                                            ------  -------  -------  -------  -------
OTHER DATA:
Number of:
 Loans outstanding                                          2,656    2,978    2,926    3,053    3,095
 Deposit accounts                                           9,926   10,537   10,630   10,659   10,449
 Full-service offices                                           3        3        4        4        4
</TABLE>

_______________
(1)     Includes  interest-bearing  deposits  in  other depository institutions.
(2)     Non-performing  assets  include  non-accrual loans and other repossessed
        assets.


                                      -4-
<PAGE>
SELECTED  QUARTERLY  FINANCIAL  DATA

The  following  table  provides a summary of operations by quarter for the years
ended  September  30,  2002  and  2001.

<TABLE>
<CAPTION>
                                                   FISCAL 2002 QUARTER ENDED
                                       --------------------------------------------------
                                       SEPTEMBER 30    JUNE 30    MARCH 31    DECEMBER 31
                                       --------------------------------------------------
                                           (Dollars in Thousands, Except Per Share Data)
<S>                                       <C>         <C>         <C>          <C>

Interest income                           $  1,861    $  1,959    $   2,030    $  2,074
Interest expense                             1,021       1,072        1,177       1,275
                                          --------    --------    ---------    --------
Net interest income                            840         887          853         799
Provision for loan losses                       20          43           35          10
                                          --------    --------    ---------    --------
Net interest income after provision
 for loan losses                               820         844          818         789

Noninterest income                             154         123          115         120
Noninterest expense                            611         632          623         619
                                          --------    --------    ---------    --------
Income before income taxes                     363         335          310         290
Income taxes                                   123         100          112          75
                                          --------    --------    ---------    --------
  Net income                              $    240    $    235    $     198    $    215
                                          ========    ========    =========    ========

  Basic income per share                  $   0.34    $   0.33    $    0.28    $   0.30
                                          ========    ========    =========    ========

  Diluted income per share                $   0.33    $   0.32    $    0.28    $   0.30
                                          ========    ========    =========    ========
</TABLE>


<TABLE>
<CAPTION>
                                                   FISCAL 2001 QUARTER ENDED
                                     ----------------------------------------------------
                                       SEPTEMBER 30    JUNE 30    MARCH 31    DECEMBER 31
                                     ----------------------------------------------------
                                         (Dollars in Thousands, Except Per Share Data)
<S>                                  <C>              <C>           <C>         <C>

Interest income                           $  2,019    $  2,066    $   2,044    $  2,025
Interest expense                             1,312       1,352        1,257       1,187
                                          --------    --------    ---------    --------
Net interest income                            707         714          787         838
Provision for loan losses                       41          67           18          18
                                          --------    --------    ---------    --------
Net interest income after provision
 for loan losses                               666         647          769         820

Noninterest income                             135         210          120         113
Noninterest expense                            607         913          643         597
                                          --------    --------    ---------    --------
Income before income taxes                     194         (56)         246         336
Income taxes                                    44        (122)          80         109
                                          --------    --------    ---------    --------
  Net income                              $    150    $     66    $     166    $    227
                                          ========    ========    =========    ========

  Basic income per share                  $   0.21    $   0.09    $    0.23    $   0.32
                                          ========    ========    =========    ========
  Diluted income per share                $   0.21    $   0.09    $    0.23    $   0.31
                                          ========    ========    =========    ========
</TABLE>


                                      -5-
<PAGE>
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
AND  RESULTS  OF  OPERATIONS


This  report  contains  certain  "forward-looking  statements".  These
forward-looking  statements,  which  are included in Management's Discussion and
Analysis,  describe  future  plans  or  strategies  and  include  the  Company's
expectations  of  future  financial  results.  The  words  "believe",  "expect",
"anticipate",  "estimate",  "project"  and  similar  expressions  identify
forward-looking  statements.  The  Company's  ability  to predict results or the
effect of future plans or strategies is inherently uncertain. Factors that could
affect actual results include interest rate trends, the general economic climate
in the Company's market area and the country as a whole, loan delinquency rates,
and changes in federal and state regulations. These factors should be considered
in  evaluating  the  forward-looking statements and undue reliance should not be
placed  on  such  statements.

GENERAL
-------

Management's  discussion  and analysis of the financial condition and results of
operations  is  intended  to  assist in understanding the consolidated financial
condition  and  results of operations of the Company.  The information contained
in  this  section  should be read in conjunction with the Consolidated Financial
Statements  and  accompanying  notes  thereto.

OPERATING  STRATEGY
-------------------

The business of the Company consists principally of attracting deposits from the
general  public  and  using  such  deposits  to  originate  one-  to four-family
residential mortgages, commercial, agricultural and consumer loans.  The Company
also  invests in U.S. Treasury securities, certificates of deposit, U.S. Federal
agency  securities,  state and local obligations and mortgage-backed securities.
The  Company  plans  to  continue to fund its assets primarily with deposits and
FHLB  advances.

Operating  results  are dependent primarily on net interest income, which is the
difference  between  the  income  earned on its interest-earning assets, such as
loans  and investments, and the cost of interest-bearing liabilities, consisting
primarily  of  deposits.  Operating  results  are also significantly affected by
general  economic  and  competitive  conditions,  primarily  changes  in  market
interest  rates,  governmental  legislation and policies concerning monetary and
fiscal  affairs and housing, as well as financial institutions and the attendant
actions  of  the  regulatory  authorities.

The  Company's  strategy  is  to  operate  as  a conservative, well-capitalized,
profitable  community-oriented financial institution dedicated to financing home
ownership,  commercial,  agricultural  and  consumer  needs within the market it
serves  and  to  provide quality service to all customers.  The Company believes
that  it  has  successfully  implemented  its strategy by (i) maintaining strong
capital  levels,  (ii)  maintaining effective control over operating expenses to
attempt  to achieve profitability under differing interest rate scenarios, (iii)
limiting  interest  rate risk, (iv) emphasizing local loan originations, and (v)
emphasizing  high-quality  customer  service  with  a competitive fee structure.

INTEREST  RATE  RISK  MANAGEMENT
--------------------------------

In  order  to  reduce  the  impact on the Company's net interest earnings due to
changes  in  interest rates, the Company's strategy on interest rate sensitivity
risk  is  to  manage  the  exposure  to potential risks associated with changing
interest  rates by maintaining a balance sheet posture where annual net interest
earnings and the market value of portfolio equity are not significantly impacted
by  unexpected  changes  in  interest  rates.


                                      -6-
<PAGE>
INTEREST  RATE  SENSITIVITY  OF  NET  PORTFOLIO  VALUE
------------------------------------------------------

B  &  L  Bank measures its interest rate risk ("IRR") in terms of sensitivity of
its  net  portfolio  value  ("NPV")  to  changes  in interest rates.  NPV is the
difference  between  incoming  and  outgoing  discounted cash flows from assets,
liabilities  and  off-balance sheet contracts.  An institution's IRR is measured
as  the  change  to its NPV as a result of a hypothetical 200 basis point ("bp")
change in market interest rates.  The following table presents the Bank's NPV at
September  30,  2002  as  calculated  by  the  OTS.

<TABLE>
<CAPTION>
            BASIS POINT               NET PORTFOLIO VALUE
               CHANGE            ----------------------------
              IN RATES           $AMOUNT   $CHANGE   % CHANGE
         -----------------       --------  --------  --------
<S>      <C>                     <C>       <C>       <C>

             +300 bp             $ 15,053  $   417         3
             +200 bp               15,307      671         5
             +100 bp               15,173      537         4
                0 bp               14,636        -         -
             -100 bp               13,904     (732)       (5)
             -200 bp                   -         -         -
             -300 bp                   -         -         -
</TABLE>

Because  of  the  market rates of interest at September 30, 2002, calculation of
the  NPV  for  a  decline  of  200  or  300  basis  points  is  not  possible.

As  with  any  method of measuring IRR, certain shortcomings are inherent in the
method  of  analysis  presented  in  the foregoing table.  For example, although
certain  assets  and  liabilities  may  have  similar  maturities  or periods of
repricing,  they  may  react  in different degrees to changes in market interest
rates.  Also,  the interest rates on certain types of assets and liabilities may
fluctuate  in  advance of changes in market interest rates, while interest rates
on  other  types  may lag behind changes in market rates.  Additionally, certain
assets  have  features  that  restrict changes in interest rates on a short-term
basis  and over the life of the asset.  Furthermore, in the event of a change in
interest  rates,  expected  rates  of prepayments on loans and early withdrawals
from  certificates  could  likely  deviate  significantly  from those assumed in
calculating  the  table.  Accordingly,  actual  results could vary significantly
from  the  results  predicted  by  the  foregoing  table.

COMPARISON  OF  FINANCIAL  CONDITION  AT  SEPTEMBER  30,  2002  AND  2001
-------------------------------------------------------------------------

Total  assets  increased  to  $131.4  million at September 30, 2002, from $126.4
million  at  September  30, 2001.  The increase can primarily be attributed to a
$10.0  million  in  new  FHLB  advances offset by a decrease on deposits of $4.7
million.  The  decrease in deposits can be attributed to a $7.7 million decrease
in  certificates of deposit as a result of lower rates paid to depositors during
the  year.  The majority of the new funds were invested into the loan portfolio,
which  increased  $2.7  million.  While  direct  loan originations declined $3.2
million, purchased loans of $6.3 million contributed significantly to the higher
volume  of  outstanding loans for the year ended September 30, 2002.  Investment
securities,  which  increased  $5.7  million  funded  by  the new FHLB advances.
Equity  increased  from  $14.6 million at September 30, 2001 to $14.8 million at
September  30,  2002,  primarily from earnings less treasury stock purchases and
dividends.  For  the  year ended September 30, 2002, the Company acquired 42,290
shares  of  its  outstanding  common  stock  at a cost of $634,000 and paid cash
dividends  of  $228,000.


                                      -7-
<PAGE>
COMPARISON  OF  OPERATING RESULTS FOR THE YEAR ENDED SEPTEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------

NET  INCOME.  For  the  year  ended  September  30,  2002,  net income increased
$279,000  or  45.8%  to $888,000 from the $609,000 reported last year.  Earnings
per  share-diluted  for the year ended September 30, 2002, increased 39 cents or
46.4%  to  $1.23  per share from $0.84 per share last year.  The increase in net
income  can  be  attributed  to an increase in the net interest income and lower
non-interest  expenses.

NET  INTEREST  INCOME.  Net  interest income increased 10.9% or $332,000 to $3.4
million  for  the  year ended September 30, 2002, from $3.0 million for the year
ended  September  30,  2001.  Total  interest  income decreased $230,000 to $7.9
million  from  $8.2  million  in  2001.  The decrease can be attributed to lower
yields  on  loans  and investments.  The average yield on earning assets for the
year  ended September 30, 2002 was 6.29% compared to 7.59% for last year.  Total
interest expense decreased $563,000 to $4.5 million for the year ended September
30,  2002,  from  $5.1  million  last  year.  The  average rate paid on interest
bearing  liabilities decreased 119 basis points to 4.20% from 5.39%.  The volume
of  average earning assets increased $18.6 million to $126.1 million and average
interest-bearing  liabilities  increased  $13.5 million to $108.2 million during
the  year  ended  September 30, 2002 over comparable amounts reported last year.
The  interest rate spread decreased 11 basis points to 2.09% from 2.20% for last
year.  The net interest margin decreased 15 basis points to 2.68% from 2.83% for
the  year ended September 30, 2001.  The decrease in the net interest spread and
the  net  interest  margin can be attributed to lower yield on loans, investment
securities  and  overnight  funds resulting from the general decline in interest
rates  during  the year ended September 30, 2002.  The decline in interest rates
resulted  in  the  call  of  $25.4  million  of U.S. Agency securities that were
reinvested  into lower yielding securities.  The average yield on the investment
securities portfolio decreased 110 basis points to 4.38% from the 5.48% realized
last  year.  The  decrease  in  the average cost of interest-bearing liabilities
also  can  be  attributed to the general decline in interest rates.  The average
rate  paid on new and renewing certificates of deposit declined 129 basis points
to  4.83%  for  the  year  ended  September  30,  2002,  from  6.12%  last year.

PROVISION  FOR LOAN LOSSES.  The provision for loan losses was decreased $36,000
to  $108,000  for the year ended September 30, 2002, as compared to $144,000 for
last year.  Loan charge-offs for the year September 30, 2002 and 2001 totaled to
$93,000.  Loan recoveries of previously charged off loans totaled $8,000 for the
year  ended  September  30,  2002,  compared to $21,000 for last year.  Net loan
charge-offs  for 2002 amounted to $85,000 or 0.12% of average outstanding loans,
compared  to $72,000 or 0.11% last year.  The decrease in the provision for loan
losses  over  last  year is attributable to provisions ascertained utilizing the
Company's  methodologies  and  documentation  requirements  to  determine  the
provision  for  losses  and  the  adequacy  of  the  allowance  for loan losses.

NONINTEREST  INCOME.  Noninterest  income  decreased $64,000 to $512,000 for the
year  ended  September  30,  2002.  The  decrease  in  noninterest income can be
attributed  to  a  $62,000  gain on the sale of a parking lot last year and to a
decline  in  gains  realized on securities called prior to maturity.  Securities
gains  for  the year ended September 30, 2002 declined $33,000 from the previous
year.

NONINTEREST  EXPENSE.  Noninterest expense decreased $274,000 for the year ended
September  30,  2002  from  last  year.  The  majority  of  the  decrease can be
attributed  to  the  contribution  of a bank building previously occupied by B&L
Bank,  with a value of $211,000, to the City of Lexington, Missouri and the cost
associated  with  the  merger of the Company's two banking subsidiaries totaling
$76,000,  which  occurred  last  year.  Also  contributing  to the decline was a
decrease  in  the  amortization of intangible assets of $74,000 as a result of a
change in accounting for goodwill as required by SFAS No. 142 and adopted at the
beginning  of  the  Company's  fiscal  year,  October 1, 2001.  Offsetting these
favorable  variances  were  increased  occupancy  expense  of  $49,000  and data
processing  expense  of  $41,000, which can be attributed to the cost associated
with  the  new  banking  facility  occupied  in  March  2001  and outsourcing of
additional  data  processing  applications  previously  processed  in  house.


                                      -8-
<PAGE>
INCOME TAXES.  The provision for income taxes increased $299,000 to $410,000 for
the  year  ended  September 30, 2002, from $111,000 for the year ended September
30,  2001.  The effective tax rate for 2002 was 31.6% compared to 15.4% for last
year.  The  lower  effective  tax  rate  last  year  can  be  attributed  to the
contribution  of  a  bank  building  to the City of Lexington resulting in a tax
benefit  of  $172,000.

COMPARISON  OF  OPERATING RESULTS FOR THE YEAR ENDED SEPTEMBER 30, 2001 AND 2000
--------------------------------------------------------------------------------

NET  INCOME.  For  the  year  ended  September  30,  2001,  net income decreased
$226,000  or 27.1% to $609,000 from the $835,000 reported in 2000.  Earnings per
share-diluted for the year ended September 30, 2001, decreased 26 cents or 23.6%
to $0.84 per share from the $1.10 per share in 2000.  The decrease in net income
can  be  attributed to a decline in the net interest spread and interest margin,
higher  provision  for  loan  losses  and  higher  noninterest  expense.

NET  INTEREST  INCOME.  Net  interest  income decreased 6.7% or $220,000 to $3.0
million  for  the  year ended September 30, 2001, from $3.3 million for the year
ended  September  30,  2000.  Total  interest  income increased $514,000 to $8.2
million  from  $7.6  million  in  2000.  The  increase  can  be attributed to an
increased  volume  of  average  earning  assets, which increased $9.0 million to
$107.5  million  during  the year ended September 30, 2001 from $98.5 million in
2000.  The  interest  rate  spread decreased 40 basis points to 2.20% from 2.60%
for fiscal 2000. The net interest margin decreased 49 basis points to 2.83% from
3.32%  for  the year ended September 30, 2000.  The decrease in the net interest
spread  and the net interest margin can be attributed to the yield on investment
securities  and overnight funds.  As a result of the general decline in interest
rates during the year ended September 30, 2001, a majority of the Federal agency
securities  held  at  the  beginning of the year were called and reinvested at a
lower yield.  The average yield on the investment securities portfolio decreased
53  basis  points to 5.48% from the 6.01% realized in 2000.  The average cost of
interest  bearing  liabilities  of  5.39%  for the year ended September 30, 2001
increased  23  basis  points  from  5.16% reported in 2000.  The increase in the
average  cost  of  funds  can  be  attributed  to  competitive  pressures, which
necessitated  higher  rates  of  interest  on  new  and renewing certificates of
deposit  during  the  first  five  months  of  fiscal  2001.

PROVISION  FOR  LOAN LOSSES.  The provision for loan losses was $144,000 for the
year  ended  September  30,  2001, as compared to $70,000 for fiscal 2000.  Loan
charge-offs  for  the  year  September  30,  2001 totaled to $93,000 compared to
$31,000  in 2000.  Net loan charge-offs for 2001 amounted to $72,000 or 0.11% of
average outstanding loans, compared to $21,000 or 0.3% in 2000.  The increase in
the  provision  for  loan  losses over fiscal 2000 is attributable to provisions
required  by  the  Company's  methodologies  and  documentation  requirement  to
determine  the  provision  for losses and the adequacy of the allowance for loan
losses.

NONINTEREST  INCOME.  Noninterest  income increased $112,000 to $576,000 for the
year  ended  September  30,  2001.  The  increased  noninterest  income  can  be
attributed  to a $62,000 gain on the sale of a parking lot and to gains realized
on  securities  called  prior  to  maturity.

NONINTEREST  EXPENSE.  Noninterest expense increased $317,000 for the year ended
September  30,  2001  over  fiscal  2000.  The  majority  of the increase can be
attributed  to  the  contribution  of a bank building previously occupied by B&L
Bank,  with  a  value  of  $211,000,  to  the City of Lexington, Missouri.  Also
contributing  to  the  increase in non-interest expense were increases in salary
and  benefits  of $13,000, occupancy of $61,000, and data processing of $43,000,
which  can be attributed to the merger of the Company's two banking subsidiaries
and  the  cost  associated with the new banking facility occupied in March 2001.

INCOME TAXES.  The provision for income taxes decreased $274,000 to $111,000 for
the  year  ended  September 30, 2001, from $385,000 for the year ended September
30, 2000. The effective tax rate for 2001 was 15.4% compared to 31.6% for fiscal
2000.  The  decline  in  the  effective  tax  rate  can  be  attributed  to  the
contribution  of  a bank building to the City of Lexington with a carrying value
of  $211,000,  which for tax purposes will be deducted at its appraised value of
$465,000  for  a  tax  benefit  of  $172,000.


                                      -9-
<PAGE>
<TABLE>
<CAPTION>
                                                                                 YEAR ENDED SEPTEMBER 30,
                                             --------------------------------------------------------------------------------------
                                                          2002                              2001                            2000
                                             -------------------------------  -------------------------------  --------------------
                                                        INTEREST
                                              AVERAGE   INCOME &    YIELD/    AVERAGE                YIELD/     AVERAGE
                                             BALANCE(1)  EXPENSE     COST     BALANCE()   INTEREST    COST     BALANCE(1) INTEREST
                                             ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                                                                  (Dollars in Thousands)
<S>                                          <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Interest-earning assets():
 Loans receivable                            $  73,656   $  5,720        7.77%  $  66,542  $  5,941    8.93%     $  62,440   $5,475
 Investment securities and other interest-
  bearing deposits                              48,974      2,143        4.38      36,998     2,027    5.48         33,783    2,030
 Federal funds sold                              3,432         61        1.78       3,959       186    4.70          2,253      135
                                             ----------  ---------              ---------  --------              ---------   ------
   Total interest-earning assets               126,062      7,924        6.29     107,499     8,154    7.59         98,476    7,640
Noninterest-earning assets                       8,573                              9,072                            6,708
                                             ----------                         ---------                        ---------
   Total assets                              $ 134,635                           $116,571                        $ 105,184
                                             ==========                         =========                        =========

Interest-bearing liabilities:
 NOW, money market and
  passbook accounts                          $  27,140        697        2.57   $  22,107       776    3.51      $  22,454      804
 Certificates of deposit                        61,358      2,961        4.83      63,639     3,892    6.12         56,889    3,280
                                             ----------  ---------              ---------  --------              ---------   ------
   Total deposits                               88,498      3,658        4.13      85,746     4,668    5.44         79,343    4,084
 FHLB advances                                  19,664        881        4.48       8,802       425    4.83          5,182      265
 Notes payable                                      66          6        9.09         158        15    9.49            253       25
                                             ----------  ---------              ---------  --------              ---------   ------
   Total interest-bearing liabilities          108,228      4,545        4.20      94,706     5,108    5.39         84,778    4,374
                                                         ---------                         --------                          ------
Noninterest-bearing liabilities                 11,670                              7,532                            6,331
                                             ----------                         ---------                       ----------
   Total liabilities                           119,898                            102,238                           91,109
Stockholders' equity                            14,737                             14,333                           14,075
                                             ----------                         ---------                       ----------
   Total liabilities and stockholders'
   Equity                                    $ 134,635                           $116,571                        $ 105,184
                                             ==========                         =========                        =========
Net interest income                                      $   3,379                         $  3,046                          $3,266
                                                         =========                         ========                         =======
Interest rate spread                                                     2.09%                         2.20%
                                                                         =====                         =====
Net interest margin                                                      2.68%                         2.83%
                                                                         =====                         =====
Ratio of average interest-earning assets
  To average interest-bearing liabilities       116%                               114%                             116%
                                                ====                               ====                             ====


                                             YIELD/
                                              COST
                                             ------
<S>                                          <C>
Interest-earning assets():
 Loans receivable                             8.77%
 Investment securities and other interest-
  bearing deposits                             6.01
 Federal funds sold                            5.99
   Total interest-earning assets               7.76
Noninterest-earning assets

   Total assets

Interest-bearing liabilities:
 NOW, money market and
  passbook accounts                            3.58
 Certificates of deposit                       5.77
   Total deposits                              5.15
 FHLB advances                                 5.11
 Notes payable                                 9.88

   Total interest-bearing liabilities          5.16

Noninterest-bearing liabilities

   Total liabilities
Stockholders' equity

   Total liabilities and stockholders'
   Equity

Net interest income

Interest rate spread                          2.60%
                                             ======
Net interest margin                           3.32%
                                             ======
Ratio of average interest-earning assets
 To average interest-bearing liabilities

</TABLE>
------------------------------
(1)  Average  balances  for  a  period  are  calculated  using the average daily
     balance  during  each  period.

(2)  Interest-earning assets include non-accrual loans and loans 90 days or more
     past  due.


                                      -10-
<PAGE>
The  following table sets forth the effects of changing rates and volumes on net
interest  income  of  the  Company.  Information is provided with respect to (i)
effects  on interest income attributable to changes in volume (changes in volume
multiplied  by  prior  rate);  (ii)  effects  on interest income attributable to
changes  in rate (changes in rate multiplied by prior volume); and, (iii) to the
net  change.  The  changes  attributed to the combined impact of rate and volume
have been allocated proportionately to the changes due to volume and the changes
due  to  rate.

<TABLE>
<CAPTION>
                                                                    YEAR ENDED SEPTEMBER 30,
                                                   ------------------------------------------------------
                                                      2002 COMPARED TO 2001      2001 COMPARED TO 2000
                                                   INCREASE (DECREASE) DUE TO  INCREASE (DECREASE) DUE TO
                                                   --------------------------  --------------------------
                                                     RATE     VOLUME     NET    RATE    VOLUME     NET
                                                   --------  --------  ------  ------  --------  ------
                                                                     (Dollars in Thousands)
<S>                                                <C>       <C>       <C>     <C>     <C>       <C>
Interest-earning assets:
Loans receivable (1)                               $  (819)  $   598   $(221)  $ 101   $   365   $ 466
Investment securities and other interest-bearing
 deposits                                             (459)      575     116    (187)      184      (3)
Federal funds sold                                    (103)      (22)   (125)    (35)       86      51
                                                   --------  --------  ------  ------  --------  ------
   Total net change in income on
    interest-earning assets                         (1,381)    1,151    (230)   (121)      635     514

Interest-bearing liabilities:
Passbook, NOW and money market accounts               (234)      155     (79)    (16)      (12)    (28)
Certificates of deposit                               (796)     (135)   (931)    207       405     612
FHLB advances                                          (33)      489     456     (16)      176     160
Notes payable                                           (1)       (8)     (9)      0       (10)    (10)
                                                   --------  --------  ------  ------  --------  ------
Total interest-bearing liabilities                  (1,064)      501    (563)    175       559     734
                                                   --------  --------  ------  ------  --------  ------
Net change in net interest income                  $  (317)  $   650   $ 333   $(296)  $    76   $(220)
                                                   ========  ========  ======  ======  ========  ======
</TABLE>
----------------------------------
(1)   For  purposes  of  calculating  volume,  rate  and  rate/volume variances,
      non-accrual loans are included in the weighted-average balance outstanding


LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------

The  Company's  banking  subsidiary,  B&L,  must  maintain  an adequate level of
liquidity  to ensure availability of sufficient funds to support loan growth and
deposit  withdrawals,  satisfy  financial  commitments  and to take advantage of
investment  opportunities.

The  primary  source  of  liquidity for B&L is liability liquidity, which is the
ability to raise new funds and renew maturing liabilities.  Principal sources of
liability  liquidity  are  customer's deposits and advances from the FHLB. Asset
liquidity  is  typically  provided from the proceeds from principal and interest
payments  on  loans,  investment  securities  and  net  operating income.  While
scheduled maturities of loans and investment securities are somewhat predictable
source  of  funds, deposit flows and mortgage prepayments are greatly influenced
by  general  interest  rates,  economic  conditions  and  competition.


                                      -11-
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES  -  CONT'D
---------------------------------------------

Liquid  funds necessary for normal daily operations are maintained with the FHLB
of  Des  Moines  and correspondent banks. Excess funds over balances required to
cover  bank  charges  for  services,  are  sold  in  overnight  Federal funds or
transferred  to  time  deposit accounts at the FHLB.  At September 30, 2002, B&L
held  $3.9  million  in  excess  funds  in time deposit accounts at the FHLB and
Federal  funds  sold.

The  Company uses its sources of funds primarily to fund loan commitments and to
pay deposits withdrawals.  At September 30, 2002, the Company had commitments to
originate  loans  aggregating  approximately  $9.3 million.  As of September 30,
2002,  certificates  of  deposit  amounted  to  $57.8 million, or 60.6% of total
deposits,  including $42.6 million that are scheduled to mature in less than one
year.  Historically, the Company has been able to retain a significant amount of
its  deposits as they mature.  The Company believes it has adequate resources to
fund all loan commitments through deposit growth by adjusting the offering rates
of certificates to retain deposits in changing interest rate environments or, if
necessary,  through  FHLB  advances.

Net  cash provided by operating activities for the Company during the year ended
September  30,  2002,  was  $1.6  million.  Net income of $888,000, adjusted for
non-cash  charges,  largely  accounted  for  the  net cash provided by operating
activities. Net cash used by investing activities was $9.9 million.  The largest
component  of  cash  used by investing activities was the increase in investment
securities  and  loans purchased.  Net cash provided by financing activities was
$4.1  million.  The  largest  component of cash provided by financing activities
was  from  new  FHLB  advances  of  $10.0  million.

At  September 30, 2002, the Company's stockholders' equity totaled $14.8 million
or  11.2%  of  total  assets compared to $14.6 million or 11.5% at September 30,
2001.  The  increase  can be attributed to retained earnings less the repurchase
of  the  Company's common stock, which during the year ended September 30, 2002,
amounted  to  $634,000.  The  Company  is  not subject to any regulatory capital
requirements.  B&L is subject to certain capital requirements imposed by the OTS
and  FDIC,  which  were  satisfied  at  September  30,  2002.  See Note J of the
Consolidated  Financial  Statements.

EFFECT  OF  INFLATION  AND  CHANGING  PRICES
--------------------------------------------

The  consolidated  financial  statements  and  related  financial data presented
herein  have  been  prepared  in  accordance  with generally accepted accounting
principles  which  require  the  measurement of financial position and operating
results  in  terms  of historical dollars, without considering the change in the
relative  purchasing  power  of  money  over  time due to inflation. The primary
impact  of  inflation  on  operations  of  the Company is reflected in increased
operating costs.  Unlike most industrial companies, virtually all the assets and
liabilities  of  a  financial  institution are monetary in nature.  As a result,
interest  rates  generally  have  a  more  significant  impact  on  a  financial
institution's  performance  than do general levels of inflation.  Interest rates
do  not  necessarily  move  in  the  same direction or to the same extent as the
prices  of  goods  and  services.

IMPACT  OF  NEW  ACCOUNTING  STANDARDS
--------------------------------------

See Note A of the Notes to the Consolidated Financial Statements.


                                      -12-
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


Board  of  Directors
Lexington  B  &  L  Financial  Corp.
Lexington,  Missouri


We  have audited the accompanying consolidated statements of financial condition
of  Lexington  B  &  L  Financial Corp. ("Company") as of September 30, 2002 and
2001,  and  the  related consolidated statements of income, stockholders' equity
and  comprehensive  income,  and  cash  flows for each of the three years in the
period  ended  September  30, 2002.  These consolidated financial statements are
the  responsibility  of  the  Company's  management.  Our  responsibility  is to
express  an  opinion  on  these  consolidated  financial statements based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audits  to obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  financial position of the Company at
September  30,  2002  and  2001,  and the results of its operations and its cash
flows  for  each  of  the three years in the period ended September 30, 2002, in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Moore, Horton & Carlson, P.C.
Mexico, Missouri
November 18, 2002


                                      -13-
<PAGE>
<TABLE>
<CAPTION>
LEXINGTON B & L FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                                                                    SEPTEMBER  30
                                                                                 2002           2001
                                                                          -----------------------------
<S>                                                                           <C>            <C>
ASSETS

Cash and due from banks                                                    $  2,107,707   $  1,738,068
Interest-bearing deposits                                                     6,908,632     11,513,314
Investment securities-Note B
  Available-for-sale, at fair value                                          31,711,326     24,737,457
  Held-to-maturity (fair value of $4,979,260 and $6,194,394, respectively)    4,813,567      6,073,428
Federal funds sold                                                            2,466,000      1,919,000
Stock in FHLB of Des Moines                                                   1,016,900        618,400
Loans held for sale                                                             420,314        197,437
Loans receivable-Note C                                                      75,214,901     72,504,032
Accrued interest receivable-Note D                                            1,022,787      1,132,287
Premises and equipment-Note E                                                 3,511,513      3,851,665
Cost in excess of net assets acquired                                           789,370        789,370
Other assets                                                                  1,439,484      1,314,524
                                                                           -------------  -------------
                                                             TOTAL ASSETS  $131,422,501   $126,388,982
                                                                           =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
  Deposits-Note F                                                          $ 95,385,784   $100,129,183
  Advances from borrowers for property taxes and insurance                      168,168        201,376
  Advances from FHLB-Note G                                                  20,164,214     10,336,980
  Notes payable-Note H                                                              ---         83,219
  Other liabilities                                                             925,911      1,082,782
                                                                           -------------  -------------
                                                        TOTAL LIABILITIES   116,644,077    111,833,540

Commitments and contingencies-Note M

Stockholders' Equity-Notes I, J and K
  Preferred stock, $.01 par value; 500,000 shares authorized, none issued
  Common stock, $.01 par value; 8,000,000 shares authorized, 1,265,000
   shares issued                                                                 12,650         12,650
  Additional paid-in capital                                                 12,355,762     12,315,709
  Retained earnings                                                          10,524,700      9,864,797
  Accumulated other comprehensive income                                        123,567         89,704
  Unearned ESOP shares                                                         (357,802)      (460,042)
  Unearned MRDP shares                                                              ---        (20,635)
  Treasury stock at cost (538,048 and 495,758 shares, respectively).         (7,880,453)    (7,246,741)
                                                                           -------------  -------------
                                               TOTAL STOCKHOLDERS' EQUITY    14,778,424     14,555,442
                                                                           -------------  -------------
                               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $131,422,501   $126,388,982
                                                                           =============  =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -14-
<PAGE>
<TABLE>
<CAPTION>
LEXINGTON  B  &  L  FINANCIAL  CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME

YEARS ENDED SEPTEMBER 30, 2002, 2001 AND 2000

                                                                             ACCUMULATED
                                                 ADDITIONAL                     OTHER        UNEARNED    UNEARNED
                                     COMMON       PAID-IN      RETAINED     COMPREHENSIVE      ESOP        MRDP       TREASURY
                                     STOCK        CAPITAL      EARNINGS     INCOME (LOSS)     SHARES      SHARES       STOCK
                                  --------------------------------------------------------------------------------------------
<S>                               <C>           <C>          <C>           <C>              <C>         <C>         <C>
                      BALANCE AT
              SEPTEMBER 30, 1999  $     12,650  $12,276,979  $ 8,904,935   $     (133,218)  $(664,522)  $(181,410)  $(5,105,119)

Net income                                 ---          ---      834,554              ---         ---         ---           ---
Other comprehensive loss,
  net of tax benefit of $14,778            ---          ---          ---          (25,744)        ---         ---           ---
Repurchase of common stock                 ---          ---          ---              ---         ---         ---    (1,949,147)
Release of ESOP shares                     ---       16,296          ---              ---     102,240         ---           ---
Amortization of MRDP                       ---          ---          ---              ---         ---     104,031           ---
Dividends paid
  ($.30 per share)                         ---          ---     (248,364)             ---         ---          --           ---
                                  ------------  -----------  ------------  ---------------  ----------  ----------  ------------
                      BALANCE AT
              SEPTEMBER 30, 2000        12,650   12,293,275    9,491,125         (158,962)   (562,282)    (77,379)   (7,054,266)

Net income                                 ---          ---      608,842              ---         ---         ---           ---
Other comprehensive loss,
  net of tax of $158,962                   ---          ---          ---          248,666         ---         ---           ---
Repurchase of common stock                 ---          ---          ---              ---         ---         ---      (192,475)
Release of ESOP shares                     ---       22,434          ---              ---     102,240         ---           ---
Amortization of MRDP                       ---          ---          ---              ---         ---      56,744           ---
Dividends paid
  ($.30 per share)                         ---          ---     (235,170)             ---         ---         ---           ---
                                  ------------  -----------  ------------  ---------------  ----------  ----------  ------------
                      BALANCE AT
              SEPTEMBER 30, 2001        12,650   12,315,709    9,864,797           89,704    (460,042)    (20,635)   (7,246,741)

Net income                                 ---          ---      888,263              ---         ---         ---           ---
Other comprehensive income,
  net of tax of $19,000                    ---          ---          ---           33,863         ---         ---           ---
Repurchase of common stock                 ---          ---          ---              ---         ---         ---      (633,712)
Release of ESOP shares                     ---       40,053          ---              ---     102,240         ---           ---
Amortization of MRDP                       ---          ---          ---              ---         ---      20,635           ---
Dividends paid
  ($.30 per share)                         ---          ---     (228,360)             ---         ---         ---           ---
                                  ------------  -----------  ------------  ---------------  ----------  ----------  ------------
                      BALANCE AT
              SEPTEMBER 30, 2002  $     12,650  $12,355,762  $10,524,700   $      123,567   $(357,802)  $     ---   $(7,880,453)
                                  ============  ===========  ============  ===============  ==========  ==========  ============


                                         TOTAL
                                     STOCKHOLDERS'
                                        EQUITY
                                   ----------------
<S>                               <C>
                      BALANCE AT
              SEPTEMBER 30, 1999  $   15,110,295

Net income                               834,554
Other comprehensive loss,
  net of tax benefit of $14,778          (25,744)
Repurchase of common stock            (1,949,147)
Release of ESOP shares                   118,536
Amortization of MRDP                     104,031
Dividends paid
  ($.30 per share)                      (248,364)
                                  ---------------
                      BALANCE AT
              SEPTEMBER 30, 2000      13,944,161

Net income                               608,842
Other comprehensive loss,
  net of tax of $158,962                 248,666
Repurchase of common stock              (192,475)
Release of ESOP shares                   124,674
Amortization of MRDP                      56,744
Dividends paid
  ($.30 per share)                      (235,170)
                                  ---------------
                      BALANCE AT
              SEPTEMBER 30, 2001      14,555,442

Net income                               888,263
Other comprehensive income,
  net of tax of $19,000                   33,863
Repurchase of common stock              (633,712)
Release of ESOP shares                   142,293
Amortization of MRDP                      20,635
Dividends paid
  ($.30 per share)                      (228,360)
                                  ---------------
                      BALANCE AT
              SEPTEMBER 30, 2002  $   14,778,424
                                  ===============
</TABLE>

<TABLE>
<CAPTION>
COMPREHENSIVE  INCOME
                                                                              YEAR ENDED SEPTEMBER 30
                                                                             2002      2001       2000
                                                                           ------------------------------
<S>                                                                        <C>       <C>        <C>
Net Income                                                                 $888,263  $608,842   $834,554
Change in unrealized gains (losses) on securities available-for-sale,
  net of taxes (benefit) of $19,000, $158,962 and $(14,778), respectively    33,863   248,666    (25,744)
Less reclassification adjustment for gains included in net income,
  net of tax of $19,500                                                         ---   (33,206)       ---
                                                                           --------  ---------  ---------
                                                                           $922,126  $824,302   $808,810
                                                                           ========  =========  =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -15-
<PAGE>
<TABLE>
<CAPTION>
LEXINGTON  B  &  L  FINANCIAL  CORP.

CONSOLIDATED  STATEMENTS  OF  INCOME

                                                                     YEAR  ENDED  SEPTEMBER  30
                                                                  2002         2001          2000
                                                              ----------------------------------------
<S>                                                           <C>           <C>         <C>
INTEREST INCOME
  Mortgage loans                                              $  4,258,973  $4,474,892  $   4,045,390
  Other loans                                                    1,461,253   1,465,862      1,428,686
  Investment securities and interest-bearing deposits            2,143,238   2,027,061      2,029,792
  Federal funds sold                                                60,516     186,259        135,466
                                                              ------------  ----------  --------------
    Total Interest Income                                        7,923,980   8,154,074      7,639,334

INTEREST EXPENSE
  Deposits                                                       3,658,011   4,667,512      4,083,754
  Advances from FHLB                                               881,031     424,718        264,960
  Notes payable                                                      6,293      15,505         24,856
                                                              ------------  ----------  --------------
    Total Interest Expense                                       4,545,335   5,107,735      4,373,570
                                                              ------------  ----------  --------------
    Net Interest Income                                          3,378,645   3,046,339      3,265,764

PROVISION FOR LOAN LOSSES                                          108,000     143,919         69,865
                                                              ------------  ----------  --------------
    Net Interest Income After Provision for Loan Losses          3,270,645   2,902,420      3,195,899

NONINTEREST INCOME
  Service charges and other fees                                   425,554     348,949        336,886
  Commissions, net                                                  20,295      39,520         53,915
  Net income (expense) of foreclosed real estate                       ---       5,483         (2,684)
  Gain on sale of investments                                          466      33,735          7,560
  Other                                                             65,704     148,554         68,493
                                                              ------------  ----------  --------------
    Total Noninterest Income                                       512,019     576,241        464,170

NONINTEREST EXPENSE
  Employee compensation and benefits                             1,413,604   1,428,231      1,415,683
  Occupancy costs                                                  320,984     271,498        210,733
  Advertising                                                       31,735      41,272         34,049
  Data processing                                                  199,634     158,168        115,278
  Federal insurance premium                                         17,646      18,266         21,620
  Professional and consulting fees                                 101,181     142,995        157,808
  Amortization of intangible assets arising from acquisitions          ---      73,674         74,222
  Contributions                                                      1,325     216,436          3,580
  Other                                                            398,292     408,279        408,042
                                                              ------------  ----------  --------------
    Total Noninterest Expense                                    2,484,401   2,758,819      2,441,015
                                                              ------------  ----------  --------------
                                  INCOME BEFORE INCOME TAXES     1,298,263     719,842      1,219,054

INCOME TAXES-NOTE I                                                410,000     111,000        384,500
                                                              ------------  ----------  --------------
                                                  NET INCOME  $    888,263  $  608,842  $     834,554
                                                              ============  ==========  ==============
BASIC INCOME PER SHARE                                        $       1.25  $     0.85  $        1.12
                                                              ============  ==========  ==============
DILUTED INCOME PER SHARE                                      $       1.23  $     0.84  $        1.10
                                                              ============  ==========  ==============
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                      -16-
<PAGE>
<TABLE>
<CAPTION>
LEXINGTON B & L FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                   YEAR ENDED SEPTEMBER 30
                                                                              2002           2001           2000
                                                                       ------------------------------------------
<S>                                                                    <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income                                                             $    888,263   $    608,842   $   834,554
Adjustments to reconcile net income to net cash provided by
 operating activities
  Depreciation and amortization                                             200,154        148,990        93,575
  Amortization of premiums and discounts                                    401,120         36,222       (13,948)
  Amortization of deferred loan fees                                         22,389         14,578         7,670
  Provision for salary continuation plan costs                               46,577         64,126        86,444
  Salary continuation plan payout                                           (28,485)           ---           ---
  Amortization of cost in excess of net assets acquired                         ---         73,674        74,222
  Gain on sales of foreclosed real estate                                       ---         (5,483)       (2,000)
  Gain on held-to-maturity securities                                          (466)          (529)       (7,560)
  Gain on available-for-sale securities                                         ---        (33,206)          ---
  Provisions for loan losses                                                108,000        143,919        69,865
  Provision for deferred income tax benefit                                  93,900       (196,500)      (68,800)
  Originations of loans held for sale                                    (5,886,887)    (4,098,995)   (5,175,988)
  Proceeds from sale of loans held for sale                               5,664,010      4,229,308     5,315,382
  ESOP shares released                                                      142,293        124,674       118,536
  Amortization of MRDP                                                       20,635         56,744       104,031
  Gift of bank building                                                         ---        209,233           ---
  Gain on sale of premises and equipment                                        ---        (61,684)          ---
  Changes to assets and liabilities increasing (decreasing) cash flows
   Accrued interest receivable                                              109,500           (228)     (106,991)
   Other assets                                                             (26,866)       (88,082)       (2,558)
   Other liabilities                                                       (174,963)       (24,580)      141,205
                                                                       -------------  -------------  ------------
        NET CASH PROVIDED BY OPERATING ACTIVITIES                         1,579,174      1,201,023     1,467,639

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from maturities/sales of securities available-for-sale          24,113,124     11,568,819     1,122,994
Proceeds from maturities/calls of securities held-to-maturity             1,249,443     17,139,009     2,312,500
Net (increase) decrease in federal funds sold                              (547,000)      (545,000)     (856,000)
Purchase of FHLB stock                                                     (398,500)       (75,500)       (8,000)
Loans originated, net of repayments                                       3,418,242     (3,185,947)   (2,603,129)
Proceeds from sales of foreclosed real estate                                   ---            ---         5,000
Purchase of securities available-for-sale                               (31,424,366)   (28,123,628)     (577,058)
Purchase of securities held-to-maturity                                         ---       (989,977)     (198,547)
Purchase of loans                                                        (6,259,500)    (4,790,687)          ---
Proceeds on sale of bank premises and equipment                                 ---        130,000           ---
Purchase of premises and equipment                                          (70,996)    (1,446,027)   (1,745,593)
                                                                       -------------  -------------  ------------
                                NET CASH USED IN INVESTING ACTIVITIES    (9,919,553)   (10,318,938)   (2,547,833)
</TABLE>


                                      -17-
<PAGE>
<TABLE>
<CAPTION>
LEXINGTON B & L FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONT'D

                                                                          YEAR ENDED SEPTEMBER 30
                                                                     2002          2001          2000
                                                                 ----------------------------------------
<S>                                                              <C>           <C>           <C>

CASH FLOWS FROM FINANCING ACTIVITIES

Net increase (decrease) in deposits                              $(4,743,399)  $14,790,707   $   188,224
Net increase (decrease) in advances from borrowers for property
 taxes and insurance                                                 (33,208)       21,280        (1,828)
Payments on notes payable                                            (83,219)      (95,000)      (95,000)
Advance from FHLB
  Borrowings                                                      10,000,000     3,500,000     2,000,000
  Repayments                                                        (172,766)     (165,666)     (158,930)
Payment of dividends                                                (228,360)     (235,170)     (248,364)
Purchase of treasury stock                                          (633,712)     (192,475)   (1,949,147)
                                                                 ------------  ------------  ------------
                                           NET CASH PROVIDED BY
                                 (USED IN) FINANCING ACTIVITIES    4,105,336    17,623,676      (265,045)
                                                                 ------------  ------------  ------------
                                NET INCREASE (DECREASE) IN CASH   (4,235,043)    8,505,761    (1,345,239)

Cash and due from banks, beginning of year                        13,251,382     4,745,621     6,090,860
                                                                 ------------  ------------  ------------
                           CASH AND DUE FROM BANKS, END OF YEAR  $ 9,016,339   $13,251,382   $ 4,745,621
                                                                 ============  ============  ============


SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION

Cash paid for
  Interest                                                       $ 4,681,934   $ 5,122,398   $ 3,690,455
                                                                 ============  ============  ============
  Income taxes                                                   $   331,471   $   349,806   $   347,956
                                                                 ============  ============  ============
Noncash investing and financing activities are as follows
  Loans to facilitate sales of real estate                       $       ---   $    37,000   $    29,000
                                                                 ============  ============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -18-
<PAGE>
LEXINGTON B & L FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2002, 2001 AND 2000


NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  accompanying  reporting  policies  and  practices  of  the  Company and its
subsidiaries  conform  to  generally  accepted  accounting  principles  ("GAAP")
accepted  in the United States of America and to prevailing practices within the
thrift  and  banking  industries.  A  summary of the more significant accounting
policies  follows:

NATURE  OF  OPERATIONS:  The  Company,  a  Missouri  corporation, is the holding
----------------------
company  for  & L Bank ("B&L"), a Federal savings bank, and B & L Mortgage, Inc.
("MTG"),  which  originates  and  sells loans primarily in the secondary market.
MTG  currently  retains  no servicing rights on loans originated.  On October 1,
1997,  the  Company  acquired  100% of the outstanding stock of Lafayette County
Bank  ("LCB"),  in a transaction accounted for as a purchase.  On April 6, 2001,
LCB  was  merged  into  B&L.

The Company through its subsidiaries provides a variety of financial services to
individual  and corporate customers including checking, money market and savings
accounts  and certificates of deposit.  Its primary lending products are one- to
four-family  residential  mortgage,  commercial, agriculture and consumer loans.

PRINCIPLES  OF CONSOLIDATION:  The consolidated financial statements include the
----------------------------
accounts  of  the  Company  and  its  wholly  owned  subsidiaries,  B&L and MTG.
Significant  intercompany  balances  and  transactions  have  been eliminated in
consolidation.

INVESTMENT  SECURITIES:  Investment  securities  are  classified  as  held  to
----------------------
maturity, which are recorded at amortized cost, or available-for-sale, which are
recorded at fair value.  Unrealized holding gains and losses, net of the related
tax  effect, on available-for-sale securities are excluded from earnings and are
reported  as  a  separate  component  of  stockholders'  equity  until realized.
Purchases  of  investment  securities  are  recorded  on  settlement  date.

Mortgage-backed  securities  represent  participating  interests  in  pools  of
long-term  first  mortgage  loans  originated  and  serviced  by  issuers of the
securities.  These  securities  are  reported  at  fair  value.

Gains  or losses on sales of securities are recognized in operations at the time
of  sale  and are determined by the difference between the net sale proceeds and
the  cost  of  the securities using the specific identification method, adjusted
for  any unamortized premiums or discounts.  Premiums or discounts are amortized
or  accreted to income using a method that approximates the interest method over
the  period  to  expected  maturity.

STOCK  IN FEDERAL HOME LOAN BANK OF DES MOINES:  Stock in the FHLB of Des Moines
----------------------------------------------
is  stated at cost and the amount of stock held is determined by regulation.  No
ready  market  exists  for  such  stock  and  it  has  no  quoted  market value.

LOANS HELD FOR SALE:  Mortgage loans originated and held for sale are carried at
-------------------
the  lower  of  cost  or market on an aggregate basis.  Loans held for sale were
originated  by  MTG  and  are  generally  committed  for  sale  at  the  time of
origination.  MTG  recognizes  no  gain  or  loss on the sale of these loans and
receives  a  predetermined  fee  for  the  origination.  Sales  are made without
recourse  and  no  rights  are  retained  on  loans  sold  to  others.


                                      -19-
<PAGE>
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

LOANS  RECEIVABLE:  Loans  receivable  are carried at unpaid principal balances,
-----------------
adjusted  for  deferred loan origination fees and the allowance for loan losses.
Loan  origination  and commitment fees and certain direct loan origination costs
are  deferred  in  accordance with SFAS No. 91 Accounting for Nonrefundable Fees
and Costs Associated with Originating or Acquiring Loans and Initial Direct Cost
of  Leases. Pursuant to the provisions of SFAS No. 91, origination fees received
from  loans,  net  of  direct  origination  costs, are deferred and amortized to
interest  income  over  the  contractual  life  of the loan using a method which
approximates  the  interest  method.

The  Company's  real estate loan portfolio consists primarily of long-term loans
secured  by  first-trust  deeds  on  single-family residences, other residential
property,  commercial  property  and  land.  The adjustable-rate mortgage is the
Company's  primary  loan  investment.

Mortgage  and  Consumer  loans  which  comprise  the  Company's homogeneous loan
portfolio,  are  automatically  placed  on  nonaccrual  status when principal or
interest  is  delinquent  for  90  days  or  more. Loans in the homogeneous loan
portfolio are automatically returned to accrual status at such time as principal
and  interest  on  the  loans  are  less  than 90 days delinquent.  Loans in the
Company's  non-homogeneous  loan  portfolio  are  generally placed on nonaccrual
status  when  principal  and  interest  is  delinquent  for  90  days  or  more.
Non-homogeneous  loans  are  returned  to  accrual  status  when in management's
judgment  the borrower's has the ability to make periodic interest and principal
payments  in  accordance  with contractual loan terms. Accrued interest on loans
placed  on  nonaccrual is reversed and interest income is recognized only to the
extent  cash  payments  are  received  until  such  time the loan is returned to
accrual  status.

ALLOWANCE  FOR  LOAN  LOSSES:  The  allowance for loan losses is maintained at a
----------------------------
level  that,  in  management's  judgment,  is  adequate  to absorb credit losses
inherent  in  the  loan  portfolio.  The  amount  of  the  allowance is based on
management's  evaluation  of the collectibility of the loan portfolio, including
the  nature  of  the portfolio, credit concentrations, trends in historical loss
experience,  specific  impaired  loans  and economic conditions.  Allowances for
impaired  loans  are  generally  determined  based  on  collateral values or the
present  value  of  estimated  cash  flows.  The  allowance  is  increased  by a
provision  for  loan  losses,  which  is  charged  to  expense,  and  reduced by
charge-offs,  net  of  recoveries.

The  Company  accounts  for  impaired  loans  under  SFAS  No. 114 Accounting by
Creditors  for  Impairment  of  a  Loan.  All  nonaccrual  loans  are considered
impaired,  except  those classified as small-balance homogeneous loans which are
collectively  evaluated  for impairment on the basis of historical loss data and
other  qualitative  factors.  The  Company  considers  all  one-to  four  and
multi-family  residential mortgage loans, and all consumer and other loans to be
smaller  homogeneous  loans.  Impaired  loans  are  assessed  individually  and
impairment  identified  when  (a) the accrual of interest has been discontinued,
(b) loans have been restructured, or (c) management has serious doubts about the
future  collectibility  of  principal  and  interest,  even though the loans are
currently performing.  Factors considered in determining impairment include, but
are  not  limited  to  expected future cash flow, the financial condition of the
borrower  and  current  economic  conditions.  If the recorded investment in the
loan  exceeds the measure of fair value, a valuation allowance is established as
a  component  of  the  allowance for loan losses. While management uses the best
information  available  to make evaluations, future adjustments to the allowance
may be necessary if conditions differ substantially from the assumptions used in
making the valuations.  In addition, regulatory examiners may require changes to
the  allowance  for  loan  losses  based  on  their  judgments about information
available  to  them  at the time of their examination. Management has elected to
continue  to use its existing nonaccrual methods for recognizing interest income
on  impaired  loans.

PREMISES  AND  EQUIPMENT:  Premises  and equipment have been stated at cost less
------------------------
accumulated  depreciation  and  amortization.  Depreciation and amortization are
computed  generally  on a straight-line basis over the estimated useful lives of
the  respective  assets,  which  range  from  five  to  forty  years.


                                      -20-
<PAGE>
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

FORECLOSED  REAL ESTATE:  Real estate acquired in settlement of loans is carried
-----------------------
at  the  lower  of the balance of the related loan at the time of foreclosure or
fair  value  less  the  estimated  costs  to  sell  the asset.  Costs of holding
foreclosed  property  are  charged  to expense in the current period, except for
significant  property  improvements  that  are  capitalized  to  the extent that
carrying  value  does  not  exceed  estimated  fair  market  value.

ADVERTISING:  The  Company's  policy  with  regards  to  advertising costs is to
------------
expense  such  costs  as  incurred.

COST  IN EXCESS OF NET ASSETS ACQUIRED:  Amounts paid for subsidiaries in excess
--------------------------------------
of  the  fair  value  of  the net assets are recorded as an asset and were being
amortized  on a straight-line basis over fifteen years until September 30, 2001.
The  Company  adopted  of SFAS No. 142, Goodwill and Other Intangible Assets, on
October  1,  2001.  Cost  in  excess  of  net  assets acquired is now tested for
impairment  annually rather than being amortized.  No impairment was recorded at
September  30,  2002.

INCOME TAXES:  Deferred tax assets and liabilities are recognized for the future
------------
tax  consequences  attributable  to  differences between the financial statement
carrying  amounts of existing assets and liabilities and their respective income
tax  bases.  As changes in tax law or rates are enacted, deferred tax assets and
liabilities  are  adjusted  through the provision for income taxes.  A valuation
allowance  is  provided  for deferred tax assets to the extent that the value of
net  deductible  temporary  differences  and  carryforward  attributes  exceed
management's  estimates  of  taxes  payable  on  future  taxable  income.

EMPLOYEE  STOCK  OWNERSHIP  PLAN (ESOP):  Compensation expense under the ESOP is
---------------------------------------
equal  to  the  fair value of common shares released or committed to be released
annually  to  participants  in the ESOP.  Common stock purchased by the ESOP and
not  allocated to participants is included in the consolidated balance sheets at
cost as a reduction of stockholders' equity.  Dividends on allocated ESOP shares
are  recorded  as  a reduction of stockholders' equity; dividends on unallocated
ESOP  shares  are  used  to  pay  debt  service  on  the  ESOP  loan.

MANAGEMENT  RECOGNITION  AND  DEVELOPMENT PLAN (MRDP):  Compensation expense for
-----------------------------------------------------
recognition and retention plans is recognized as the participants vest in shares
granted.  For  fixed  awards, compensation expense is measured at the grant date
as  the  fair  value  of  the shares granted.  For variable awards, compensation
expense  is  determined  each  reporting period based on the market price of the
Company's  common  stock  at  the  end  of  each  period.

STOCK  OPTION  PLAN:  As  allowed under SFAS No. 123, Accounting For Stock-Based
-------------------
Compensation,  the  Company measures stock-based compensation cost in accordance
with  Accounting Principles Board Opinion No. 25, Accounting For Stock Issued To
Employees.  The  Company  has included in Note K the effect of the fair value of
the  stock  option  plan  on  net income earnings per share on a pro forma basis
pursuant  to  SFAS  No.  123.

STATEMENTS  OF CASH FLOWS:  For purposes of the cash flows, cash and amounts due
-------------------------
from depository institutions and interest-bearing deposits in other banks with a
maturity  of  three  months  or  less  at  date  of purchase are considered cash
equivalents.

RISKS  AND  UNCERTAINTIES:  The  Company  is  a  community-oriented  financial
-------------------------
institution  that  provides  traditional  financial services within the areas it
serves.  The Company is engaged primarily in the business of attracting deposits
from  the  general public and using these funds to originate one- to four-family
residential  mortgage,  commercial,  agriculture  and  consumer  loans  located
primarily  in Lafayette and Macon Counties, Missouri.  Accordingly, the ultimate
collectibility  of  the  Company's  loan  portfolio  is  dependent  upon  market
conditions  in  that  area.  This  geographic  concentration  is  considered  in
management's  establishment  of  the  allowance  for  loan  losses.


                                      -21-
<PAGE>
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

The  consolidated  financial  statements  have  been prepared in conformity with
GAAP.  In  preparing  the  consolidated  financial  statements,  management  is
required  to  make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the balance sheet dates and income and expenses for
the  periods  covered.  Actual  results  could  differ  significantly from these
estimates  and  assumptions.

In  the  normal  course  of its business, the Company encounters two significant
types  of  risk:  economic  and  regulatory.  There are three main components of
economic  risk: interest rate risk, credit risk and market risk.  The Company is
subject  to  interest  rate  risk  to  the  degree  that  its  interest-bearing
liabilities  mature  or  reprice  more or less rapidly, or on a different basis,
than  its  interest-earning  assets.  Credit  risk is the risk of default on the
Company's  loan  portfolio  that  results  from  the  borrower's  inability  or
unwillingness to make contractually required payments.  Market risk results from
changes  in  the  value  of assets and liabilities that may impact, favorably or
unfavorably,  the  realizability  of  those  assets  and liabilities held by the
Company.

The Company is subject to the regulations of various government agencies.  These
regulations  can and do change significantly from period to period.  The Company
also  undergoes  periodic  examinations  by  the  regulatory agencies, which may
subject  it  to  further  changes  with  respect to asset valuations, amounts of
required  loss  allowances  and  operating  restrictions  resulting  from  the
regulators'  judgements  based  on  information available to them at the time of
their  examination.

NET INCOME PER SHARE:  Basic income per share is based upon the weighted average
---------------------
number  of  common  shares  outstanding  during  the periods presented.  Diluted
income  per  share  includes the effects of all dilutive potential common shares
outstanding  during  each  period.

NEW  ACCOUNTING  STANDARD:  In  August  2001,  the  FASB  issued  SFAS  No.  144
--------------------------
Accounting  for  the  Impairment or disposal of Long-Lived Assets.  SFAS No. 144
carries  over  the  recognition  and  measurement  provisions  in  SFAS No. 121.
Accordingly,  an  entity must recognize an impairment loss if the carrying value
of  a long-lived asset or asset group (a) is not recoverable and (b) exceeds its
fair value.  Similar to SFAS No. 121, SFAS No. 144 requires an entity to test an
asset  or asset group for impairment whenever events or changes in circumstances
indicate  that  its carrying amount may not be recoverable.  SFAS No.144 differs
from  SFAS  No. 121 in that it provides guidance on estimating future cash flows
to  test  recoverability.  SFAS  No.  144  is effective for financial statements
issued  for  fiscal  years beginning after December 31, 2001 and interim periods
within those fiscal years.  Management adopted SFAS No. 144 effective October 1,
2001,  as required, without material effect on the Company's financial condition
or  results  of  operation.

RECLASSIFICATION:  Certain  amounts  in the prior periods consolidated financial
----------------
statements have been reclassified to conform with the current year presentation.


                                      -22-
<PAGE>
<TABLE>
<CAPTION>
NOTE B--INVESTMENT SECURITIES


                                                                       GROSS UNREALIZED
                                                        AMORTIZED     -----------------        FAIR
                                                          COST        GAINS       LOSSES       VALUE
                                                      -------------------------------------------------
<S>                                                   <C>          <C>        <C>           <C>
September 30, 2002:
   Available-for-sale
     U.S. Government and Federal agency obligations   $ 8,317,791  $  97,802  $    (2,989)  $ 8,412,604
     Mortgage-backed securities                        23,196,967    169,184      (67,429)   23,298,722
                                                      -----------  ---------  ------------  -----------
                                                      $31,514,758  $ 266,986  $   (70,418)  $31,711,326
                                                      ===========  =========  ============  ===========
   Held-to-maturity
     U.S. Government and Federal agency obligations   $   900,000  $  44,352  $       ---   $   944,352
     State and local obligations                        3,913,567    121,341          ---     4,034,908
                                                      -----------  ---------  ------------  -----------
                                                      $ 4,813,567  $ 165,693  $       ---   $ 4,979,260
                                                      ===========  =========  ============  ===========
September 30, 2001:
   Available-for-sale
     U.S. Government and Federal agency obligations   $ 7,518,142  $  94,259  $       ---   $ 7,612,401
     Mortgage-backed securities                        17,075,612     89,132      (39,688)   17,125,056
                                                      -----------  ---------  ------------  -----------
                                                      $24,593,754  $ 183,391  $   (39,688)  $24,737,457
                                                      ===========  =========  ============  ===========
   Held-to-maturity
     U. S. Government and Federal agency obligations  $ 1,860,451  $  55,333  $    (2,150)  $ 1,913,634
     State and local obligations                        4,212,977     84,317      (16,534)    4,280,760
                                                      -----------  ---------  ------------  -----------
                                                      $ 6,073,428  $ 139,650  $   (18,684)  $ 6,194,394
                                                      ===========  =========  ============  ===========
</TABLE>

The  scheduled  contractual maturities of debt securities at September 30, 2002,
are  shown below.  Mortgaged-backed securities are allocated on the basis of the
prior  three  months  historical  constant  prepayment  rate  ("CPR").  Expected
maturities may differ from contractual maturities because borrowers may have the
right  to  call  or  prepay  obligations  without  call or prepayment penalties.

<TABLE>
<CAPTION>
                                       HELD-TO-MATURITY        AVAILABLE-FOR-SALE
                                     ------------------------------------------------
                                     AMORTIZED      FAIR      AMORTIZED      FAIR
                                        COST       VALUE        COST         VALUE
                                     ------------------------------------------------
<S>                                  <C>         <C>         <C>          <C>
Amounts maturing:
 One year or less                    $1,012,052  $1,026,272  $ 9,060,407  $ 9,105,334
 After one year through five years    1,148,503   1,230,302   14,616,924   14,708,941
 After five years through ten years   1,269,155   1,305,663    6,200,035    6,260,448
 After ten years                      1,383,857   1,417,023    1,637,392    1,636,603
                                     ----------  ----------  -----------  -----------
                                     $4,813,567  $4,979,260  $31,514,758  $31,711,326
                                     ==========  ==========  ===========  ===========
</TABLE>

Securities  held-to-maturity  were  called  for redemption for total proceeds of
$1,249,443,  $2,134,450 and $257,500, resulting in gross realized gains of $466,
$529  and  $7,560  in  2002,  2001  and  2000,  respectively.

Available-for-sale  securities  were called for redemption for total proceeds of
$24,113,124  and  $2,421,300  resulting  in  gross  realized  gains of $0.00 and
$33,206  in  2002  and  2001,  respectively.

Investment  securities  were pledged to secure deposits as required or permitted
by  law, with an amortized cost of $12,625,811 and $15,078,525 and fair value of
$12,779,932  and  $15,204,483  at  September  30,  2002  and 2001, respectively.


                                      -23-
<PAGE>
<TABLE>
<CAPTION>
NOTE C--LOANS RECEIVABLE

Loans receivable consist of the following at September 30:

                                               2002          2001
                                           --------------------------
<S>                                        <C>           <C>
Mortgage loans:
  One- to four-family residences           $41,481,983   $42,213,164
  Commercial and Multi-family residential    7,161,709     7,111,683
  Construction                               2,118,359     1,782,457
  Land                                       2,846,961     2,373,548
                                           ------------  ------------
                                            53,609,012    53,480,852

Commercial                                   8,921,183     6,340,211
Agricultural                                 5,237,221     4,832,240
Consumer and other loans:
  Home equity                                  292,256       140,305
  Loans on savings                           1,529,143     1,409,647
  Automobile                                 5,014,278     5,615,379
  Other                                      1,233,650     1,288,336
                                           ------------  ------------
                                             8,069,327     8,453,667
                                           ------------  ------------
                                            75,836,743    73,106,970
Net deferred loan-origination fees             120,930       117,062
Allowance for loan losses                     (742,772)     (720,000)
                                           ------------  ------------
                                           $75,214,901   $72,504,032
                                           ============  ============
</TABLE>

Amounts  for  2001  have  been restated to conform with loan classifications for
2002.

At September 30, 2002 and 2001, the Company serviced loans amounting to $101,752
and  $1,008,354, respectively, for the benefit of others.  Also, the Company had
loans serviced by others amounting to $6,516,208 and $5,551,799 at September 30,
2002  and  2001,  respectively.

One- to four-family loans are pledged under a blanket pledge agreement to secure
FHLB  advances.

In the ordinary course of business, the Company makes loans to its directors and
officers  at  substantially the same terms prevailing at the time of origination
for  comparable  transactions  with  borrowers.  The  following  is a summary of
related  party  loan  activity:

<TABLE>
<CAPTION>
                                                   YEAR ENDED SEPTEMBER 30
                                                    2002           2001
                                                ----------------------------
<S>                                             <C>           <C>
Balance, beginning of year                      $   228,477   $     289,756
Originations                                         74,966             143
Payments                                            (63,005)        (61,422)
                                                ------------  --------------
                          BALANCE, END OF YEAR  $   240,438   $     228,477
                                                ============  ==============
</TABLE>


                                      -24-
<PAGE>
NOTE C--LOANS RECEIVABLE - CONT'D

Activity in the allowance for loan losses is as follows:

<TABLE>
<CAPTION>
                                                    YEAR ENDED SEPTEMBER 30
                                                  2002        2001       2000
                                               ----------  ----------  ---------
<S>                                            <C>         <C>         <C>
Balance, beginning of year                     $ 720,000   $ 648,400   $599,209
Provision for loan losses                        108,000     143,919     69,865
Charge-offs, net of recoveries                   (85,228)    (72,319)   (20,674)
                                               ----------  ----------  ---------
                        BALANCE, END OF YEAR   $ 742,772   $ 720,000   $648,400
                                               ==========  ==========  =========
</TABLE>

The  recorded  investment  in  impaired  loans, for which there is no need for a
valuation  allowance  based  upon  the  measure  of the loan's fair value of the
underlying  collateral at September 30, 2002 and 2001, was $99,927 and $226,861,
respectively.  The average recorded investment in impaired loans during the year
ended  September  30, 2002 and 2001 was $203,836 and $97,942, respectively.  The
amount  of interest included in interest income on such loans for the year ended
September  30,  2002  and  2001,  amounted  to approximately $16,010 and $7,976,
respectively.

NOTE D--ACCRUED INTEREST RECEIVABLE

Accrued interest receivable consists of the following at September 30:

<TABLE>
<CAPTION>
                                                        2002        2001
                                                     ----------------------
<S>                                                  <C>         <C>
Loans                                                $  738,626  $  891,427
Investment securities and interest bearing deposits     284,161     240,860
                                                     ----------  ----------
                                                     $1,022,787  $1,132,287
                                                     ==========  ==========
</TABLE>


NOTE E-PREMISES AND EQUIPMENT

Premises and equipment consists of the following at September 30:

<TABLE>
<CAPTION>
                                                   2002        2001
                                                ----------------------
<S>                                             <C>         <C>
Land                                            $  410,265  $  503,465
Building and improvements                        2,882,849   3,148,603
Furniture and equipment                          1,384,019   1,335,751
                                                ----------  ----------
                                                 4,677,133   4,987,819
Less accumulated depreciation and amortization   1,165,620   1,136,154
                                                ----------  ----------
                                                $3,511,513  $3,851,665
                                                ==========  ==========
</TABLE>

Interest  costs  of  $72,194,  related  to  new  building  construction,  were
capitalized  during  the  year  ended September 30, 2001.  During the year ended
September  30,  2002, an unused banking facility consisting of land and building
cost  of  $93,200  and  $288,483, respectively, less accumulated depreciation of
$168,653  was transferred to other assets.  Rental income on leased property for
2002 totaled $5,400 and depreciation expense amounted to $2,035.  Future minimum
rentals  amount  to  $900  per  month  through  March  31,  2007.


                                      -25-
<PAGE>
<TABLE>
<CAPTION>
NOTE F-- DEPOSITS

Deposit account balances are summarized as follow at September 30:

                                             2002                   2001
                                  ---------------------------------------------
                                     AMOUNT        %        AMOUNT         %
                                  ---------------------------------------------
<S>                               <C>           <C>      <C>            <C>
Noninterest-bearing               $ 9,831,646    10.31%  $  9,128,715     9.12%
NOW                                 9,511,528     9.97      8,462,351     8.45
Money Market                        8,051,219     8.44     10,972,993    10.96
Passbook savings                   10,219,611    10.71      6,140,565     6.13
                                  ------------  -------  -------------  -------
                                   37,614,004    39.43     34,704,624    34.66
Certificates of deposit:
  2.00 to 2.99%                    25,671,691    26.91         41,448      .04
  3.00 to 3.99%                     8,312,033     8.72      4,316,000     4.31
  4.00 to 4.99%                     4,468,147     4.69     14,770,393    14.75
  5.00 to 5.99%                     5,024,581     5.27     14,217,040    14.20
  6.00 to 6.99%                    10,037,979    10.52     20,558,006    20.53
  7.00 to 7.99%                     4,257,349     4.46     11,521,672    11.51
                                  ------------  -------  -------------  -------
                                   57,771,780    60.57     65,424,559    65.34
                                  ------------  -------  -------------  -------
                                  $95,385,784   100.00%  $100,129,183   100.00%
                                  ============  =======  =============  =======
Weighted Average Interest Rates          3.49%                   4.87%
                                  ============           =============
</TABLE>

The  aggregate  amount of certificates of deposit with a minimum denomination of
$100,000 was approximately $11,442,530 and $12,092,519 at September 30, 2002 and
2001,  respectively.  Deposits  over  $100,000  are  not  federally  insured.

The  Company  had  deposits  of  approximately $1,772,000 and $2,161,000 for its
directors  and  officers  at  September  30,  2002  and  2001,  respectively.

At  September  30,  2002,  contractual maturities of certificate accounts are as
follows:

<TABLE>
<CAPTION>
   STATED
INTEREST RATE      2003         2004        2005       2006       2007      AFTER
--------------  -----------  ----------  ----------  --------  ----------  --------
<S>             <C>          <C>         <C>         <C>       <C>         <C>
2.00 to 2.99%   $23,562,839  $2,108,852  $      ---  $    ---  $      ---  $    ---
3.00 to 3.99%     4,811,003   1,962,191   1,230,891   307,948         ---       ---
4.00 to 4.99%     2,724,267     708,964     509,426    31,132     212,217   282,141
5.00 to 5.99%     2,441,059   1,687,360     311,297   133,236     451,629       ---
6.00 to 6.99%     5,145,578   3,039,005     842,253   455,230     544,925    10,988
7.00 to 7.99%     3,930,516      86,816     140,017       ---     100,000       ---
                -----------  ----------  ----------  --------  ----------  --------
                $42,615,262  $9,593,188  $3,033,884  $927,546  $1,308,771  $293,129
                ===========  ==========  ==========  ========  ==========  ========
</TABLE>

<TABLE>
<CAPTION>
Interest expense on deposits is as follows:

                                                      YEAR ENDED SEPTEMBER 30
                                                    2002        2001        2000
                                                 ----------------------------------
<S>                                              <C>         <C>         <C>
Now, Money Market and Passbook savings accounts  $  696,743  $  775,903  $  803,907
Certificate accounts                              2,961,268   3,891,609   3,279,847
                                                 ----------  ----------  ----------
                                                 $3,658,011  $4,667,512  $4,083,754
                                                 ==========  ==========  ==========
</TABLE>


                                      -26-
<PAGE>
<TABLE>
<CAPTION>
NOTE G--ADVANCES FROM FEDERAL HOME LOAN BANK OF DES MOINES

Advances from FHLB consist of the following at September 30:


                                                                 2002         2001
                                                              ------------------------
<S>                                                           <C>          <C>
6.80% fixed rate, due on or before March 15, 2002             $       ---  $    35,000
5.25% fixed rate, due in monthly installments over a
 period of fifteen years through December 2, 2013               1,636,438    1,740,473
4.76% fixed rate, final maturity date of December 15,
 2008, callable quarterly beginning December 15, 2003           2,500,000    2,500,000
5.47% fixed rate, due in monthly installments over a
 period of fifteen years through October 21, 2013,
 putable quarterly beginning October 21, 2003                     527,776      561,507
6.90% fixed rate, due August 29, 2003                           1,000,000    1,000,000
6.61% fixed rate, due September 29, 2003                        1,000,000    1,000,000
5.26% fixed rate, due March 21, 2011, callable quarterly
  after one year if the three-month LIBOR rate is equal to
  or greater than 8%.  If called, the Bank has the option of
  requesting any advance from FHLB otherwise available
  pursuant to its credit policy.                                3,500,000    3,500,000
2.61% fixed rate, due October 17, 2002                          3,500,000          ---
3.18% fixed rate, due October 22, 2003                          2,500,000          ---
3.80% fixed rate, due October 22, 2004                          2,000,000          ---
4.20% fixed rate, due October 24, 2005                          2,000,000          ---
                                                              -----------  -----------
                                                              $20,164,214  $10,336,980
                                                              ===========  ===========
</TABLE>
Scheduled maturities of FHLB advances are as follows:

                    YEAR ENDING
                    SEPTEMBER 30        AMOUNT
                    -----------------------------
                    2003              $ 5,645,254
                    2004                2,653,149
                    2005                2,161,472
                    2006                2,170,248
                    2007                  179,501
                    Thereafter          7,354,590
                                      -----------
                                      $20,164,214
                                      ===========


The  advances  are  collateralized by a blanket pledge agreement with FHLB under
which  the  Company  can draw advances of unspecified amounts.  The Company must
hold an unencumbered portfolio of one- to four-family residential mortgages with
a  book value of not less than 120% of the indebtedness.  The advance agreements
include  certain prepayment privileges that generally include penalty provisions
if  prepaid  before  certain  specified  dates.


NOTE  H--NOTES  PAYABLE

Notes  payable  at September 30, 2001 were acquired in the purchase of Lafayette
County  Bank.  The notes are unsecured, bear interest at the rate of 10% and are
payable  to  the  previous owners of Lafayette County Bank.  The final principal
payment  was  made  July  3,  2002  in  the  amount  of  $83,219.


                                      -27-
<PAGE>
NOTE I--INCOME TAXES

Components of income tax expense (benefit) are as follows:


                                  YEAR ENDED SEPTEMBER 30
                                2002       2001       2000
                              -------------------------------
Current                       $316,100  $ 307,500   $453,300
Deferred (benefit)              93,900   (196,500)   (68,800)
                              --------  ----------  ---------
                              $410,000  $ 111,000   $384,500
                              ========  ==========  =========

The  Company  has a contribution carryover that expires in 2006 in the amount of
approximately  $293,000.

During  1996,  the  Small Business Job Protection Act (the "Act) was signed into
law.  The  Act  eliminated  the percentage of taxable income bad debt deductions
for  thrift  institutions  for tax years beginning after December 31, 1995.  The
Act  provides  that  bad  debt reserves accumulated prior to 1988 be exempt from
recapture.  Bad  debt  reserves  accumulated after 1987 are subject to recapture
over  a  six  year  period.  B&L  has provided for deferred income taxes for the
reserve  recapture after 1987; therefore the impact of this legislation will not
have  a  material  effect  on  B&L's  financial  statements.

Prior  to the enactment of the Act, B&L accumulated approximately $2,000,000 for
which  no  deferred  income  tax  liability  has  been  recognized.  This amount
represents  an  allocation  of  income  to  bad  debt  deductions for income tax
purposes  only.  If  any of this amount is used other than to absorb loan losses
(which  is  not  anticipated),  the  amount will be subject to income tax at the
current  corporate  rates.

The provision for income taxes as shown on the consolidated statements of income
differs  from amounts computed by applying the statutory federal income tax rate
of  34%  to  income  before  taxes  as  follows:

<TABLE>
<CAPTION>
                                                                YEAR ENDED SEPTEMBER 30
                                                      2002                2001               2000
                                              ----------------------------------------------------------
                                              AMOUNT        %       AMOUNT      %      AMOUNT       %
                                              ----------------------------------------------------------
<S>                                           <C>        <C>      <C>        <C>      <C>        <C>
Income tax expense at statutory rate          $441,409     34.0%  $244,746     34.0%  $414,478     34.0%
Increase (decrease) in taxes resulting from:
  Officers life insurance                      (10,161)    (0.8)    (9,846)    (1.4)   (10,056)    (0.8)
  Tax exempt income, net of related expenses   (69,846)    (5.4)   (64,054)    (8.9)   (66,077)    (5.4)
  Amortization of intangible assets arising
   from acquisitions                               ---      ---     25,049      3.5     25,235      2.1
  State income tax, net of federal benefit      35,640      2.8        ---      ---     21,780      1.8
   Excess of appraised value of contribution
   of building over carrying value                 ---             (86,961)   (12.1)       ---      ---
 Other, net                                     12,958      1.0      2,066      0.3       (860)    (0.1)
                                              ---------  -------  ---------  -------  ---------  -------
                                              $410,000     31.6%  $111,000     15.4%  $384,500     31.6%
                                              =========  =======  =========  =======  =========  =======
</TABLE>


                                      -28-
<PAGE>
NOTE I--INCOME TAXES - CONT'D

Deferred  income  taxes  reflect  the  impact of "temporary differences" between
amounts  of  assets  and  liabilities  for financial reporting purposes and such
amounts  as  measured  by  tax  laws.  Temporary differences that give rise to a
significant  portion  of  deferred  tax assets and liabilities are as follows at
September  30:

<TABLE>
<CAPTION>
                                                      2002       2001
                                                    --------------------
<S>                                                 <C>        <C>
Deferred tax assets
  Allowance for loan losses                         $244,800   $226,800
  Unearned MRDP shares                                   ---     94,000
  Deferred compensation                              154,000    147,300
  Contribution carryforward                          108,400    141,300
  Capital loss, net of valuation allowance               663        663
Deferred tax liabilities
  Depreciation                                        (8,500)   (16,800)
  Unrealized gain on available-for-sale securities   (73,000)   (54,000)
  FHLB stock dividend                                (58,300)   (58,300)
                                                    ---------  ---------
                            NET DEFERRED TAX ASSET  $368,063   $480,963
                                                    =========  =========
</TABLE>


NOTE J--REGULATORY CAPITAL REQUIREMENTS

B&L  is  subject  to various regulatory capital requirements administered by the
OTS.  Failure  to  meet  the capital requirements can initiate certain mandatory
and discretionary actions by regulators that could have a material effect on the
Company's  financial  statements.  Under  capital  adequacy  guidelines  and the
regulatory  framework  for  prompt  corrective  action,  B&L  must  meet capital
guidelines that involve quantitative measures of assets, liabilities and certain
off-balance-sheet  items  as  calculated  under regulatory accounting practices.
Capital  amounts and classification are also subject to qualitative judgments by
the  regulators  about  components,  risk  weightings  and  other  factors.

Quantitative  measures  established  by  regulations  to ensure capital adequacy
require the Company's subsidiary bank to maintain minimum amounts and ratios, as
set forth in the table below of Total Risk-Based Capital to Risk-Weighted Assets
and  Tier  1  Capital to Risk-Weighted Assets, Tier 1 Capital to Adjusted Assets
(the  leverage  ratio),  and  Tangible  Capital  to  Adjusted  Assets.


                                      -29-
<PAGE>
<TABLE>
<CAPTION>
NOTE J--REGULATORY CAPITAL REQUIREMENTS - CONT'D

                                                                                             MINIMUM
                                                                                            TO BE WELL
                                                               MINIMUM                   CAPITALIZED UNDER
                                                             FOR CAPITAL                 PROMPT CORRECTIVE
                                    ACTUAL                ADEQUACY PURPOSES              ACTION PROVISIONS
                               --------------------       ---------------------          -----------------
                               AMOUNT   RATIO             AMOUNT     RATIO               AMOUNT    RATIO
                               ---------------------------------------------------------------------------
                                                          (Dollars in Thousands)
<S>                            <C>      <C>     <C>       <C>        <C>         <C>       <C>     <C>
As of September 30, 2002
  B & L Bank
    Total Risk-Based Capital   $12,702  16.98%         >  $   5,983       8.00%         >  $7,479  10.00%
    (to Risk Weighted Assets)                          -                                -
    Tier 1 Capital              12,198  16.31          >      2,992       4.00          >   7,831   6.00
    (to Risk Weighted Assets)                          -                                -
    Tier 1 Capital              12,198   9.35          >      3,915       3.00          >   6,526   5.00
    (to Adjusted Assets)                               -                                -
    Tangible Capital            12,198   9.35          >      1,958       1.00                N/A    N/A
   (to Adjusted Assets)                                -

As of September 30, 2001
  B & L Bank
    Total Risk-Based Capital   $12,997  18.67%         >  $   5,570       8.00%         >  $6,962  10.00%
    (to Risk Weighted Assets)                          -                                -
    Tier 1 Capital              12,413  17.83          >      2,785       4.00          >   7,542   6.00
    (to Risk Weighted Assets)                          -                                -
    Tier 1 Capital              12,413   9.87          >      3,771       3.00          >   6,285   5.00
    (to Adjusted Assets)                               -                                -
    Tangible Capital            12,413   9.87          >      1,885       1.50                N/A    N/A
    (to Adjusted Assets)                               -
</TABLE>

Management  believes  that  as  of  September  30,  2002 and 2001, the Company's
banking  subsidiary  met  all  capital  requirements to which they were subject.


NOTE K--EMPLOYEE BENEFITS

B&L  is a participating employer in the Financial Institution Retirement Fund, a
multi-employer  defined  benefit  pension  plan  that  covers  substantially all
full-time  employees after one year of service.  B&L's policy is to fund pension
costs  as  necessary.  The  plan  has  been  fully  funded  since June 30, 1997.
Pension  expense  of  $99,600, $45,300, and $37,800 was recognized for the years
ended  September  30,  2002,  2001  and  2000,  respectively.

B&L  also  has  a 401(k) salary reduction plan for all full-time employees.  The
plan  is  entirely  funded  by participant contributions.  Participants may make
deferrals  up  to  15%  of  compensation,  subject  to  internal  revenue  code
limitations.

The  Company  has  also entered into salary continuation agreements with four of
its  officers.  These  agreements  provide  for  monthly-deferred  compensation
payments  for  a  period  of  180  months following retirement.  The Company has
purchased  life  insurance  policies  to  fund  these  agreements.  Deferred
compensation  charged to operations for the years ended September 30, 2002, 2001
and  2000,  was  $46,577,  $64,126,  and  $86,444,  respectively.


                                      -30-
<PAGE>
NOTE K--EMPLOYEE BENEFITS - CONT'D

In  connection with the conversion from mutual to stock form, B&L established an
ESOP  for  the  benefit  of  participating employees.  Employees are eligible to
participate  upon  attaining  age twenty-one and completing one year of service.

The  ESOP  borrowed  $1,012,000 from the Company to fund the purchase of 101,200
shares  of  the  Company's  common stock. The purchase of shares of the ESOP was
recorded  in  the  consolidated  financial statements through a credit to common
stock  and  additional  paid-in  capital with a corresponding charge to a contra
equity  account  for  the  unreleased shares.  The loan is secured solely by the
common  stock  and  is to be repaid in equal quarterly installments of principal
and  interest  payable through March 2006, at 8.25%.  The intercompany ESOP note
and  related  interest  are  eliminated  in  consolidation.

B&L makes quarterly contributions to the ESOP that are equal to the debt service
less  dividends on unallocated ESOP shares used to repay the loan.  Dividends on
allocated  shares will be paid to participants of the ESOP.  Shares are released
from  collateral  and  allocated  to  participating  employees,  based  on  the
proportion  of  loan  principal  and  interest  repaid  and  compensation of the
participants.  Forfeitures will be reallocated to participants on the same basis
as  other  contributions  in  the  plan  year.  Benefits  are  payable  upon  a
participant's  retirement,  death,  disability  or  separation  from  service.

Effective  with  the date of the stock conversion, the Company adopted Statement
of  Position  ("SOP")  93-6.  As  shares  are  committed  to  be  released  from
collateral,  the  Company reports compensation expense equal to the average fair
value  of  the  shares  committed to be released.  Dividends on allocated shares
will  be  charged  to stockholders' equity.  Dividends on unallocated shares are
recorded  as  a  reduction  to  the  ESOP loan.  ESOP expense for the year ended
September  30,  2002,  2001  and  2000,  was  $128,491,  $107,804,  and $98,601,
respectively.  The  fair value of unreleased shares based on market price of the
Company's  stock  at  September  30,  2002  and 2001 was $514,516, and $563,549,
respectively.

The number of ESOP shares is summarized as follows at September 30:

                                             2002     2001
                                           -------  -------
  Allocated shares                          65,420   55,196
  Unreleased shares                         35,780   46,004
                                           -------  -------
                                           101,200  101,200
                                           =======  =======

The  Board  of  Directors  adopted and the shareholders subsequently approved an
MRDP.  Under  the  MRDP,  common  stock  of 50,600 shares was awarded to certain
directors,  officers  and  employees of the Company and B&L.  The award will not
require  any  payment  by the recipients and will vest over five years beginning
one  year after the date of the award (June 11, 1997). Amortization of the award
resulted in a charge to compensation and benefit expense of $20,635, $56,745 and
$104,031  in 2002, 2001 and 2000, respectively.  As of June 11, 2002, all shares
awarded  are  fully  vested.

The  Company  has  entered  into  three-year  employment agreements with certain
members  of  management.  Under the agreements, the Company will pay the members
their  initial  base  salaries,  which may be increased at the discretion of the
Board of Directors.  Additionally, the agreements provide for severance payments
if  employment is terminated following a change in control.  These payments will
be  equal  to  2.99 times their average annual compensation paid during the five
years  immediately  preceding  the  change  in  control.

The  Company has authorized and the shareholders have approved the adoption of a
stock  option  plan.  Under  the  stock  option plan, options to acquire 126,500
shares  of the Company's stock may be granted to certain officers, directors and
employees  of  the  Company  and  B&L.  The options will enable the recipient to
purchase  stock at an exercise price equal to the fair market value of the stock
at the date of grant.  On June 11, 1997, the Company granted options for 101,200
shares  for  $15.125  per  share.  The  options  will  vest  over the five years
following  the date of grant and are exercisable for up to 10 years.  No options
have  been  exercised  at  September  30,  2002.


                                      -31-
<PAGE>
NOTE K--EMPLOYEE BENEFITS - CONT'D

The Company adopted SFAS No. 123, Accounting for Stock-Based Compensation, which
permits  entities  to  recognize,  as  expense over the vesting period, the fair
value  of  all stock-based awards on the date of grant.  Alternatively, SFAS No.
123  allows entities to disclose pro forma net income and income per share as if
the  fair  value-based  method  defined  in SFAS No. 123 has been applied, while
continuing  to  apply  the  provisions  of  Accounting  Principles Board ("APB")
Opinion  No.  25,  Accounting  for  Stock  Issued  to  Employees,  under  which
compensation expense is recorded on the date of grant only if the current market
price  of  the  underlying  stock  exceeds  the  exercise  price.

The  Company  has elected to apply the recognition provisions of APB Opinion No.
25  and  provide  the  pro  forma  disclosure  provisions  of SFAS No. 123.  Had
compensation  expense for the Company's incentive and nonstatutory stock options
been  determined based upon the fair value of the grant date consistent with the
methodology  prescribed  under  SFAS  No.  123,  the  Company's net earnings and
diluted  earnings  per  share  would have been reduced by approximately $74,986,
$88,453  and  $88,453  or  $0.10,  $0.11  and $0.10 per share for the year ended
September  30,  2002,  2001  and  2000,  respectively.

Following  is  a  summary  of  the  fair  values  of  options  granted using the
Black-Scholes  option-pricing model for the years ended September 30, 2002, 2001
and  2000:

<TABLE>
<CAPTION>
<S>                                      <C>
Fair value at grant date                    $6.94
Assumptions:
  Dividend yield                             1.14%
  Volatility                                20.27%
  Risk-free interest rate                    6.10%
  Expected life                          10 years
</TABLE>

Pro  forma  net earnings reflect only options granted and vested in fiscal 2002,
2001  and  2000.  Therefore, the full impact of calculating compensation expense
for  stock  options  under  SFAS  is not reflected in the pro forma net earnings
amount  presented  above  because  compensation  expense  is  reflected over the
options'  vesting  period.


NOTE L--INCOME PER SHARE

The  shares  used  in  calculation  of basic and diluted income per share are as
follows:

<TABLE>
<CAPTION>
                                              YEAR ENDED SEPTEMBER 30
                                              2002     2001     2000
                                            -------------------------
<S>                                         <C>      <C>      <C>
Weighted average common shares outstanding  712,753  714,208  746,406
Stock options and MRDP                        7,124   10,117   15,008
                                            -------  -------  -------
                                            719,877  724,325  761,414
                                            =======  =======  =======
</TABLE>


                                      -32-
<PAGE>
NOTE M-- FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK, CONCENTRATIONS OF
CREDIT RISK AND CONTINGENCIES

The  Company  is a party to financial instruments with off-balance sheet risk in
the normal course of business to meet customer-financing needs.  These financial
instruments  consist  principally  of commitments to extend credit.  The Company
uses  the same credit policies in making commitments and conditional obligations
as  it  does  for on-balance sheet instruments. The Company's exposure to credit
loss  in  the  event  of nonperformance by the other party is represented by the
contractual amount of those instruments.  The Company does not generally require
collateral  or  other security on unfunded loan commitments until such time that
loans  are  funded.  Commitments  to  extend  credit are agreements to lend to a
customer  as  long  as there is no violation of any condition established in the
contract.  Commitments  generally  have  fixed  expiration  dates  or  other
termination clauses. The Company evaluates each customer's creditworthiness on a
case-by-case  basis.  The  amount of collateral obtained, if deemed necessary by
the Company upon extension of credit, is based on management's credit evaluation
of  the  counterparty.  Such  collateral  consists  primarily  of  residential
properties.

At  September  30,  2002  and 2001, the Company was committed to originate loans
aggregating  approximately  $9,260,000 and $8,800,000, respectively.  Fixed loan
commitments at September 30, 2002 and 2001, amounted to approximately $3,945,000
and $2,276,000 with interest rates ranging from 4.4% to 12.0% and 4.0% to 18.5%,
respectively.  The  Company also has outstanding letters of credit in the amount
of  $6,400  and  $37,000,  respectively,  at  September  30,  2002  and  2001.

At  September 30, 2002 and 2001, the Company had amounts on deposit at banks and
federal  agencies  in  excess  of  federally  insured  limits  of  approximately
$8,046,969  and  $12,052,295  respectively.

In addition, the Company from time to time becomes a defendant in certain claims
and  legal actions arising in the ordinary course of business.  At September 30,
2002,  there  were  no  such  claims  and  legal  actions.


NOTE N--FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS  No.  107, Disclosures about Fair Values of Financial Instruments, requires
disclosure of fair value information about financial instruments, whether or not
recognized  in  the  statement  of  financial  condition.  In cases where quoted
market  prices  are  not  available,  fair  values  are based on estimates using
present value or other valuation techniques.  Those techniques are significantly
affected  by  the assumptions used, including the discount rate and estimates of
future  cash  flows.  In that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases, could not
be  realized  in immediate settlement of the instruments.  SFAS No. 107 excludes
certain  financial  instruments  and  all  nonfinancial  instruments  from  its
disclosure  requirements.  Accordingly,  the  aggregate  fair  value  amounts
presented  do  not  represent  the  underlying  value  of  the  Company.

The  following  methods  and  assumptions were used by the Company in estimating
fair  values  of  financial  instruments  as  disclosed  herein:

     Cash and due from banks and interest-bearing deposits: The carrying amounts
     of  cash  and  due from depository institutions and certificates of deposit
     approximate  their  fair  value.

     Investment  and  mortgage-backed  securities:  Fair  value is determined by
     reference  to  quoted  market  prices.

     Federal funds sold: The carrying value approximates fair value.

     Stock in FHLB: This stock is a restricted asset and its carrying value is a
     reasonable  estimate  of  fair  value.

     Loans  held  for  sale: The carrying value approximates fair value based on
     sales  commitments  at  the  time  of  origination.


                                      -33-
<PAGE>
NOTE N -- FAIR VALUE OF FINANCIAL INSTRUMENTS - CONT'D

Loans  receivable:  The fair value of first mortgage loans is estimated by using
discounted  cash  flow  analyses,  using interest rates currently offered by the
Company  for  loans  with  similar terms to borrowers of similar credit quality.
The  majority  of  real  estate loans are residential.  First mortgage loans are
segregated  by  fixed  and adjustable interest terms. The fair value of consumer
loans  is  calculated  by  using the discounted cash flow based upon the current
market for like instruments.  Fair values for impaired loans are estimated using
discounted  cash  flow  analyses.

Accrued  interest  receivable:  The  carrying  value  approximates  fair  value.

Transaction  deposits:  Transaction  deposits,  payable  on  demand  or  with
maturities  of  90  days  or  less,  have  a  fair  value  equal  to book value.

Certificates  of  deposit:  The  fair  value  of  fixed maturity certificates of
deposit  is  estimated  by  discounting  the  future  cash flows using the rates
currently  offered  for  deposits  of  similar  maturities.

Advances  from  borrowers  for taxes and insurance:  The book value approximates
fair  value.

Advances  from FHLB:  The fair value is estimated by discounting the future cash
flows  using  interest  rates  currently  offered  by the FHLB for advances with
similar  maturities.

Notes  payable:  The  book  value  approximates  fair  value.

Off-balance sheet instruments:  The fair value of a loan commitment and a letter
of  credit  is  determined  based  on  the  fees currently charged to enter into
similar agreements, taking into account the remaining terms of the agreement and
the  present  creditworthiness  of  the counterparties.  Neither the fees earned
during the year on these instruments nor their value at year end are significant
to  the  Company's  consolidated  financial  position.

Limitations:  Fair  value  estimates are made at a specific point in time, based
on  relevant  market information and information about the financial instrument.
The  valuation  techniques employed above involve uncertainties and are affected
by  assumptions used and judgements regarding prepayments, credit risk, discount
rates, cash flows and other factors.  Changes in assumptions could significantly
affect  the  reported  fair  value.


                                      -34-
<PAGE>
NOTE N -- FAIR VALUE OF FINANCIAL INSTRUMENTS - CONT'D

In  addition,  the fair value estimates are based on existing on and off-balance
sheet  financial  instruments  without  attempting  to  estimate  the  value  of
anticipated future business and the value of assets and liabilities that are not
considered  financial  instruments.  The fair value estimates do not include the
benefit  that  results  from  the  low-cost  funding  provided  by  the  deposit
liabilities  compared to the cost of borrowing funds in the market.  The amounts
are  as  follows  at  September  30:

<TABLE>
<CAPTION>
                                                           2002               2001
                                                   --------------------------------------
                                                   CARRYING    FAIR    CARRYING    FAIR
                                                    AMOUNT     VALUE    AMOUNT     VALUE
                                                   --------------------------------------
                                                            (Dollars in Thousands)
<S>                                                <C>        <C>      <C>        <C>
ASSETS
  Cash                                             $   2,108  $ 2,108  $   1,738  $ 1,738
  Interest-bearing deposits                            6,909    6,909     11,513   11,513
  Investment securities available-for-sale            31,711   31,711     24,737   24,737
  Investment securities held-to-maturity               4,814    4,979      6,073    6,194
  Federal funds sold                                   2,466    2,466      1,919    1,919
  Stock in FHLB                                        1,017    1,017        618      618
  Loans held for sale                                    420      420        197      197
  Loans receivable                                    75,215   75,860     72,504   74,046
  Accrued interest receivable                          1,023    1,023      1,132    1,132

LIABILITIES
  Transaction accounts                                37,614   37,614     34,705   34,705
  Certificates of deposit                             57,772   58,027     65,425   66,465
  Advances from borrowers for taxes and insurance        168      168        201      201
  Advances from FHLB                                  20,164   20,402     10,337   10,211
  Notes payable                                          ---      ---         83       83
</TABLE>


NOTE O -- CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

The  following condensed balance sheets, condensed statements of income and cash
flows for Lexington B & L Financial Corp. should be read in conjunction with the
consolidated  financial  statements  and  the  notes  thereto.

<TABLE>
<CAPTION>
CONDENSED BALANCE SHEETS

                                            SEPTEMBER 30
                                          2002         2001
                                       -----------------------
<S>                                    <C>          <C>
ASSETS
Cash                                   $ 1,006,944  $   326,768
Municipal investment held-to-maturity                       ---
ESOP note receivable                       450,802      557,650
Investment in subsidiaries:
  B & L Bank                            13,111,278   13,508,009
  B & L Mortgage, Inc.                      84,808       61,426
Other                                      129,836      188,308
                                       -----------  -----------
                        TOTAL ASSETS   $14,783,668  $14,642,161
                                       ===========  ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses                       $     5,244  $     3,500
Notes payable                                  ---       83,219
Stockholders' equity                    14,778,424   14,555,442
                                       -----------  -----------
                TOTAL LIABILITIES AND
                 STOCKHOLDERS' EQUITY  $14,783,668  $14,642,161
                                       ===========  ===========
</TABLE>


                                      -35-
<PAGE>
<TABLE>
<CAPTION>
NOTE O--CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS - CONT'D

CONDENSED STATEMENTS OF INCOME
                                                                        YEAR ENDED SEPTEMBER 30
                                                                     2002         2001         2000
                                                                  -------------------------------------
<S>                                                               <C>          <C>         <C>
INCOME
  Dividends from subsidiary                                       $1,500,000   $     ---   $       ---
  Interest                                                            43,651      65,164        93,894
  Loss on sale of investment                                             ---      (2,650)          ---
                                                                  -----------  ----------  ------------
                                                                   1,543,651      62,514        93,894
EXPENSES
  MRDP                                                                20,634      56,745       104,031
  Interest                                                             6,293      15,505        24,856
  Professional fees                                                   69,079      80,419        78,498
  Inter-Company expense reimbursement                                 18,000         ---           ---
  Other                                                               23,876      29,539        22,332
                                                                  -----------  ----------  ------------
                                                                     137,882     182,208       229,717
                                                                  -----------  ----------  ------------
INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS
 OF SUBSIDIARIES AND INCOME TAXES                                  1,405,769    (119,694)     (135,823)
Increase (decrease) in undistributed equity of subsidiaries         (549,506)    683,536       923,377
                                                                  -----------  ----------  ------------
                                      INCOME BEFORE INCOME TAXES     856,263     563,842       787,554
INCOME TAXES BENEFIT                                                 (32,000)    (45,000)      (47,000)
                                                                  -----------  ----------  ------------
                                                      NET INCOME  $  888,263   $ 608,842   $   834,554
                                                                  ===========  ==========  ============
CONDENSED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                      $  888,263   $ 608,842   $   834,554
  Adjustments to reconcile net income to net cash
  provided from operating activities:
    (Increase) decrease in undistributed equity of subsidiaries      549,506    (683,536)     (923,377)
    Loss on sale of investment                                           ---       2,650           ---
    Amortization of MRDP                                              20,635      56,745       104,031
    Increase (decrease) in other assets and liabilities               60,215     (16,704)      (52,095)
                                                                  -----------  ----------  ------------
                                            NET CASH PROVIDED BY
                                  (USED IN) OPERATING ACTIVITIES   1,518,619     (32,003)      (36,887)
CASH FLOW FROM INVESTING ACTIVITIES
  Purchase of security held-to-maturity                                  ---         ---      (265,000)
  Proceeds from sale of security                                         ---     262,350           ---
  Surplus distribution from subsidiary                                   ---         ---       450,000
                                                                  -----------  ----------  ------------
                                            NET CASH PROVIDED BY
                                            INVESTING ACTIVITIES         ---     262,350       185,000
CASH FLOWS FROM FINANCING ACTIVITIES
  Principal payments on notes payable                                (83,219)    (95,000)      (95,000)
  Principal collected from ESOP                                      106,848      98,469        90,748
  Dividends paid                                                    (228,360)   (235,170)     (248,364)
  Purchase of treasury stock                                        (633,712)   (192,475)   (1,949,147)
                                                                  -----------  ----------  ------------
                           NET CASH USED IN FINANCING ACTIVITIES    (838,443)   (424,176)   (2,201,763)
                                                                  -----------  ----------  ------------
                                         NET INCREASE (DECREASE)
                                    IN CASH AND CASH EQUIVALENTS     680,176    (193,829)   (2,053,650)
CASH, BEGINNING OF YEAR                                              326,768     520,597     2,574,247
                                                                  -----------  ----------  ------------
                                               CASH, END OF YEAR  $1,006,944   $ 326,768   $   520,597
                                                                  ===========  ==========  ============
</TABLE>


                                      -36-
<PAGE>
DIRECTORS AND OFFICERS

                        LEXINGTON B & L FINANCIAL CORP.

OFFICERS:                            DIRECTORS:

E. Steva Vialle                      Erwin Oetting, Jr.
Chief Executive Officer              Chairman of the Board

William J. Huhmann                   E. Steva Vialle
President and                        Chief Executive Officer
Chief Financial Officer
                                     William J. Huhmann
Mark D. Summerlin                    President and
Senior Vice-President                Chief Financial Officer
and Secretary
                                     Steve Oliaro
Terry L. Thompson                    President
Vice-President                       Baker Memorials, Inc.

                                     Norman Vialle
                                     Retired Businessman

                                     Charles R. Wilcoxon
                                     Retired Businessman

                         B & L BANK

OFFICERS:                            DIRECTORS:

E. Steva Vialle                      Erwin Oetting, Jr.
Chief Executive Officer              Chairman of the Board

Mark D. Summerlin                    E. Steva Vialle
President                            Chief Executive Officer

Terry L. Thompson                    Mark D. Summerlin
Executive Vice-President             President
and Secretary
                                     Terry L. Thompson
William J. Huhmann                   Executive Vice-President
Senior Vice-President                and Secretary

Kathryn M. Swafford                  Steve Oliaro
Senior Vice-President and Treasurer  President
                                     Baker Memorials, Inc.
Carol Summerlin
Vice President                       Norman Vialle
                                     Retired Businessman


                                      -37-
<PAGE>
                    B & L BANK - CONT'D

OFFICERS:                            DIRECTORS:

Kirk Craven                          Charles R. Wilcoxon
Vice President                       Retired Businessman

Betty Smith                          ADVISORY DIRECTORS
Assistant Vice-President
                                     Alfred Block
Vickie Church                        Farmer
Assistant Vice-President
                                     Norman Rasa
Betty Teter                          Businessman/Farmer
Assistant Vice-President
                                     William C. LaHue, M.D.
Elsie Binder                         Medical Doctor
Assistant Branch Manager

Mary Ann Campbell
Branch Manager


CORPORATE INFORMATION


OFFICES                              INDEPENDENT AUDITORS

LEXINGTON B & L FINANCIAL CORP.      Moore, Horton & Carlson, P.C.
AND B & L BANK                       Mexico, Missouri

205 S. 13th Street                   GENERAL COUNSEL
Lexington, Missouri 64067
Telephone (660) 259-2247             Aull, Sherman, Worthington,
                                     Giorza & Hamilton, LLC
BRANCH LOCATIONS                     Lexington, Missouri

107 W. Hwy 224                       SPECIAL COUNSEL
Wellington, Missouri 64097
Telephone (816) 934-2641             Muldoon Murphy & Faucette LLP
                                     Washington, D.C.
119 E. Second Street
Callao, Missouri 63534
Telephone (660) 768-5511




                                      -38-
<PAGE>
STOCKHOLDER INFORMATION


ANNUAL MEETING

The Annual Meeting of Stockholders will be held at the main office of B & L
Bank, 205 S. 13th Street, Lexington, Missouri, on Tuesday, January 21, 2003 at
10:00 a.m., local time.


SHAREHOLDER AND GENERAL INQUIRIES     REGISTRAR AND TRANSFER AGENT


E. Steva Vialle                       Registrar and Transfer Company
B & L Bank                            10 Commerce Drive
205 S. 13th Street                    Cranford, New Jersey 07016-3572
Lexington, Missouri 64067             (800) 866-1340
(660) 259-2247


ANNUAL  AND  OTHER  REPORTS

A  COPY  OF  THE FORM 10-KSB (WITHOUT EXHIBITS) AS FILED WITH THE SECURITIES AND
EXCHANGE  COMMISSION  WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD  DATE  FOR  VOTING  AT  THE  ANNUAL  MEETING OF STOCKHOLDERS UPON WRITTEN
REQUEST  TO  THE SECRETARY, LEXINGTON B & L FINANCIAL CORP., 205 S. 13TH STREET,
LEXINGTON,  MISSOURI 64067.  THE COMPANY'S FORM 10-KSB IS ALSO AVAILABLE THROUGH
THE  SEC'S  WORLD  WIDE  WEB  SITE  ON  THE  INTERNET  (HTTP://WWW.SEC.GOV).


                                      -39-
<PAGE>