SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                   FORM 10-KSB

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

        For  the  Fiscal  Year  Ended  September  30,  2001

                                       OR

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

                        Commission File Number: 0-28120

                        LEXINGTON B & L FINANCIAL CORP.
                        -------------------------------
        (Exact name of small business issuer as specified in its charter)

                Missouri                                              43-1739555
-----------------------------------------                    -------------------
(State or other jurisdiction of                                (I.R.S.  Employer
 incorporation or organization)                                    I.D.  Number)

205 S. 13th Street, Lexington, Missouri                                    64067
-----------------------------------------                    -------------------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code:               (660) 259-2247
                                                             -------------------

Securities registered pursuant to Section 12(b) of the Act:                 None
                                                                            ----

Securities registered pursuant to
Section 12(g) of the Act:                 Common Stock, par value $.01 per share
                                          --------------------------------------
                                                     (Title of Class)

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

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  contained  in  this  form,  and  no disclosure will be
contained,  to  the  best  of the registrant's knowledge, in definitive proxy or
other  information statements incorporated by reference in Part III of this Form
10-KSB  or  any  amendments  to  this  Form  10-KSB.   X
                                                      ---

     The  Registrant's  revenues  for  the  fiscal  year  under report were $8.7
million.

     As  of  December 12, 2001, there were issued and outstanding 765,452 shares
of the Registrant's Common Stock.  The Common Stock is listed for trading on the
NASDAQ  SmallCap  Market  under  the  symbol  "LXMO."  Based  on the bid and ask
prices,  the  aggregate  value  of  the  Common Stock outstanding held by on the
nonaffiliates  of  the  Registrant  on December 12, 2001 was $9,568,150 (765,452
shares  at  $12.50  per  share).  For purposes of this calculation, officers and
directors  of  the  Registrant  are  considered  nonaffiliates  of  the Company.

     DOCUMENTS  INCORPORATED  BY  REFERENCE

     1.  Portions  of  Annual  Report  to Stockholders for the Fiscal Year Ended
September  30,  2001  ("Annual  Report")  (Parts  I  and  II).

     2.  Portions  of  Definitive Proxy Statement for the 2002 Annual Meeting of
Stockholders  (Part  III).


<PAGE>
                                     PART I

ITEM  1.  BUSINESS
------------------

GENERAL

     Lexington  B  &  L Financial Corp. ("Company"), a Missouri corporation, was
organized  on  November 29, 1995 for the purpose of becoming the holding company
for B & L Bank (formerly The Lexington Building and Loan Association, F.A.) upon
its  conversion  from a federal mutual savings and loan association to a federal
stock  savings  bank  ("Conversion").  The  Conversion  was completed on June 5,
1996.

     B&L  Bank  was  originally chartered in 1887 as a Missouri-chartered mutual
savings  and  loan  association  under the name "The Lexington Building and Loan
Association,"  and  converted  to  a  federal  charter and adopted the name "The
Lexington  Building  and  Loan  Association,  F.A."  in  June 1995.  B&L Bank is
regulated  by  the  Office  of  Thrift  Supervision ("OTS"), its primary federal
regulator,  and  the Federal Deposit Insurance Corporation ("FDIC"), the insurer
of  its  deposits.  B&L  Bank's deposits are federally insured by the FDIC under
the  Savings  Association  Insurance Fund ("SAIF").  B&L Bank is a member of the
Federal  Home  Loan  Bank  ("FHLB")  System.

     On  October  1,  1997,  the  Company  acquired  Lafayette  County  Bank  of
Lexington/Wellington  ("Lafayette  County Bank") through the merger of Lafayette
County  Bank's parent corporation, Lafayette Bancshares, Inc., with the Company.
The  acquisition  was  accounted  for  as  a  purchase  under generally accepted
accounting  principles.  On  April 6, 2001 Lafayette County Bank was merged into
B&L Bank.  Lafayette County Bank's main office in Lexington, Missouri was closed
while  its  branch  offices in Wellington and Callao, Missouri were continued as
branches  of  B&L  Bank.

     The  Company  incorporated  a  mortgage banking subsidiary, B & L Mortgage,
Inc. in November 1998. B&L Mortgage offices are located in Odessa, Missouri. Its
primary  business  is  the  origination of one-to-four family mortgages for sale
into  the  secondary  market.

     The Company's bank subsidiary is a community oriented financial institution
that  engages  primarily in the business of attracting deposits from the general
public  and  using  these  funds  to  originate  one-to-four  family residential
mortgage,  commercial,  agricultural and consumer loans within its market areas.
The Company is a portfolio lender and generally does not sell the mortgage loans
that  it  originates,  except  for  loans  originated  by  B&L  Mortgage.


MARKET  AREA

     Lexington,  Missouri  is located on the southern bank of the Missouri River
approximately  45  miles  east  of  Kansas City, Missouri.  Lexington, estimated
population  of  4,900,  is  the  county  seat  and is one of the larger towns in
Lafayette  County.  Lafayette County is predominately rural and contains several
small  towns, although the western portions are becoming bedroom communities for
commuters  to  jobs in the Kansas City metropolitan area.  The Company considers
its  market  area  for  loans and deposits to encompass Lafayette County and the
bordering  areas  of  three  surrounding counties (southern Ray County, northern
Johnson  County  and western Jackson County) and the area surrounding its Callao
office  which  encompasses  all  of  Macon  County.

     The  economy  encompassing  the  Company's  market  area  has  its roots in
agriculture,  although  agriculture has declined as a source of revenue over the
decades.  Most  of  the  employment  today is primarily based in services, light
manufacturing,  state  and  local  government  and retail trade. Tourism is also
part  of  the  local  economy  as  Lexington has historic ties to the Civil War.


                                      -1-
<PAGE>
LENDING  ACTIVITIES

     GENERAL.  The  principal lending activity of the Company is the origination
of  conventional  mortgage  loans for the purpose of purchasing, constructing or
refinancing  owner-occupied,  one-  to  four-family  residential  property.  The
Company  also originates multi-family, commercial real estate, land, commercial,
agricultural  and  consumer  loans.  The  Company's net loans receivable totaled
$72.5  million  at  September 30, 2001, representing 57.4% of consolidated total
assets.  The Company's mortgage banking subsidiary originates mortgage loans for
sale  into  the secondary market.  Such loans are classified on the Consolidated
Statement  of  Financial  Position as "Loans held-for-sale" and at September 30,
2001  totaled  $197,000.

     LOAN PORTFOLIO ANALYSIS.  The following table sets forth the composition of
the  Company's  loan  portfolio  by type of loan as of the dates indicated.  The
Company  had  no concentration of loans exceeding 10% of total gross loans other
than  as  set  forth  below.

<TABLE>
<CAPTION>
                                                            At September 30,
                                           2001               2000               1999
                                          -------            -------            -------
                                          Amount   Percent   Amount   Percent   Amount   Percent
                                          -------  --------  -------  --------  -------  --------
<S>                                       <C>      <C>       <C>      <C>       <C>      <C>
                                                          (Dollars in thousands)
Type of loan:
Mortgage loans:
 One-to-four family. . . . . . . . . . .  $42,819    58.57%  $40,241    61.68%  $39,439    62.93%
 Commercial real estate and
   multi-family. . . . . . . . . . . . .    7,373    10.09%    6,382     9.78%    5,703     9.10%
 Land. . . . . . . . . . . . . . . . . .    2,809     3.84%    1,783     2.73%    1,115     1.78%
 Construction. . . . . . . . . . . . . .    1,782     2.44%    1,411     2.16%    1,176     1.87%
                                          -------  --------  -------  --------  -------  --------
   Total mortgage loans. . . . . . . . .   54,783    74.94%   49,817    76.35%   47,433    75.68%
Commercial loans . . . . . . . . . . . .    6,233     8.52%    1,941     2.98%    2,815     4.49%
Agriculture loans. . . . . . . . . . . .    3,564     4.88%    3,088     4.73%    3,225     5.15%
Consumer and other loans
 Home equity . . . . . . . . . . . . . .      258     0.35%      728     1.12%      676     1.08%
 Loans on savings deposits . . . . . . .    1,410     1.93%    2,293     3.51%    2,457     3.92%
 Automobile loans. . . . . . . . . . . .    5,663     7.75%    5,554     8.51%    4,811     7.68%
 Other . . . . . . . . . . . . . . . . .    1,196     1.63%    1,828     2.80%    1,255     2.00%
                                          -------  --------  -------  --------  -------  --------
   Total consumer and other loans. . . .    8,527    11.66%   10,403    15.94%    9,199    14.68%
                                          -------  --------  -------  --------  -------  --------
   Total loans . . . . . . . . . . . . .   73,107   100.00%   65,249   100.00%   62,672   100.00%
                                                   ========           ========           ========
Add Deferred loan fees . . . . . . . . .      117                 80                 53
Less Allowance for possible loan losses.      720                648                599
                                          -------            -------            -------
Loans receivable, net. . . . . . . . . .  $72,504            $64,681            $62,126
                                          =======            =======            =======
</TABLE>


                                      -2-
<PAGE>
The  following  table  sets  forth  at  September  30,  2001 certain information
regarding  the  dollar amount of loans maturing in the Company's portfolio based
on  contractual  terms  to  maturity, but does not include scheduled payments or
potential  prepayments.  Demand loans (loans having no stated repayment schedule
and  no stated maturity) and overdrafts are reported as due in one year or less.
Mortgage  loans  which  have  adjustable  interest  rates  are reported at their
contractual  maturity  date.  Loan  balances  do  not  include  undisbursed loan
proceeds,  unearned  discounts,  and  allowance  for  loan  losses.

<TABLE>
<CAPTION>
                                        After     After      After      After
                                      One Year   3 Years    5 Years   10 years
                            Within     Through   Through    Through    Through     After
                           One Year    3 Years   5 Years   10 Years   15 Years   15 Years    Total
                           ---------  ---------  --------  ---------  ---------  ---------  -------
                                                        (In Thousands)
<S>                        <C>        <C>        <C>       <C>        <C>        <C>        <C>
One-to four-family. . . .  $   1,679  $   3,652  $  3,177  $   7,502  $   7,565  $  19,244  $42,819
Commercial real estate
   and multi-family . . .      1,162        850       235        748      2,754      1,624    7,373
Land. . . . . . . . . . .        424        117        61        230        167      1,810    2,809
Construction. . . . . . .      1,753         29         -          -          -          -    1,782
                           ---------  ---------  --------  ---------  ---------  ---------  -------
  Total mortgage loans. .      5,018      4,648     3,473      8,480     10,486     22,678   54,783
Commercial loans. . . . .      2,823      1,409     1,449        552          -          -    6,233
Agriculture . . . . . . .      1,946        964       358        233          -         63    3,564
Consumer and other loans.      2,192      4,176     1,812        305         42          -    8,527
                           ---------  ---------  --------  ---------  ---------  ---------  -------
  Total loans . . . . . .  $  11,979  $  11,197  $  7,092  $   9,570  $  10,528  $  22,741  $73,107
                           =========  =========  ========  =========  =========  =========  =======
</TABLE>

Thee  following  table  sets  forth  the  dollar  amount  of all loans due after
September  30,  2002,  which  have  fixed  interest  rates  and have floating or
adjustable  interest  rates.

<TABLE>
<CAPTION>
                                                          Floating  or
                                            Fixed-         Adjustable
                                            Rates            Rates
                                           -------          -------
<S>                                        <C>              <C>
                                                (In Thousands)
Mortgage loans:
 One-to-four family . . . . . . . . . . .  $ 8,647          $32,493
 Commercial real estate and multi-family.    2,429            3,782
 Land . . . . . . . . . . . . . . . . . .      353            2,032
 Construction . . . . . . . . . . . . . .       29                -
                                           -------          -------
   Total mortgage loans . . . . . . . . .   11,458           38,307
Commercial loans. . . . . . . . . . . . .    2,698              712
Agriculture loans . . . . . . . . . . . .      494            1,124
Consumer and other loans. . . . . . . . .    6,076              259
                                           -------          -------
   Total. . . . . . . . . . . . . . . . .  $20,726          $40,402
                                           =======          =======
</TABLE>

Scheduled  contractual  principal  repayments of loans do not reflect the actual
life of such assets.  The average life of loans ordinarily is substantially less
than  their  contractual  terms  because  of  prepayments.  The  average life of
mortgage  loans  tends  to  increase, however, when current mortgage loan market
rates are higher than rates on existing mortgage loans and, conversely, decrease
when  rates  on  existing  mortgage  loans are higher than current mortgage loan
market  rates.


                                      -3-
<PAGE>
     RESIDENTIAL  REAL  ESTATE  LENDING.  The  primary  lending  activity of the
Company  is  the  origination  of mortgage loans to enable borrowers to purchase
existing  one-  to  four-family  homes.  The  Company  presently  originates for
retention  in  its  portfolio  both  adjustable rate mortgage ("ARM") loans with
terms  of  up  to  30 years and fixed-rate mortgage loans with terms of up to 15
years.  Borrower  demand  for  ARM  loans  versus fixed-rate mortgage loans is a
function  of  the  level  of  interest rates, the expectations of changes in the
level  of  interest  rates and the difference between the initial interest rates
and  fees  charged  for  each  type  of  loan. The relative amount of fixed-rate
mortgage  loans  and  ARM  loans  that  can be originated at any time is largely
determined  by  the  demand  for  each  in  a  competitive  environment.

     The loan fees charged, interest rates and other provisions of the Company's
ARM  loans  are  determined  on  the  basis  of  its  own  pricing  criteria and
competitive market conditions. The Company originates one-year ARM loans secured
by  owner-occupied  residences  whose  interest rates and payments generally are
adjusted  annually  to  a  rate  typically  equal  to  2.875% above the one-year
constant  maturity  U.S. Treasury ("CMT") index. The Company occasionally offers
ARM  loans with initial rates below those that would prevail under the foregoing
computations,  determined by the Company based on market factors and competitive
rates  for  loans  having  similar  features  offered  by other lenders for such
initial  periods.  At September 30, 2001, the initial interest rate on ARM loans
offered  by the Bank ranged from 6.50% to 7.50% per annum. The periodic interest
rate  cap  (the  maximum  amount  by which the interest rate may be increased or
decreased  in  a  given  period)  on the Company's ARM loans is generally 1% per
adjustment  period  and  the lifetime interest rate cap is generally 5% over the
initial  interest  rate  of  the  loan.

     The  Company does not originate negative amortization loans.  The terms and
conditions  of  the  ARM  loans  offered by the Company, including the index for
interest  rates,  may  vary  from  time  to time.  The Company believes that the
adjustment  features  of  its  ARM loans provide flexibility to meet competitive
conditions  as  to  initial  rate  concessions  while  preserving  the Company's
objectives  by  limiting  the  duration  of  the  initial  rate  concession.

     A  significant  portion of the Company's residential mortgage loans are not
readily  saleable  in  the  secondary  market because they are not originated in
accordance with the purchase requirements of Freddie Mac or Fannie Mae. Although
such  loans  satisfy  the  Company's  underwriting  requirements,  they  are
non-agency-conforming  because  they  do  not  satisfy  collateral requirements,
income and debt ratios, acreage limits, or various other requirements imposed by
Freddie Mac and Fannie Mae.  In addition, substantially all of the Company's ARM
loans  have  periodic  interest  rate  caps  of  1% per adjustment period and 5%
lifetime  over  the initial loan interest rate, while Freddie Mac and Fannie Mae
secondary  market guidelines require higher adjustment periods and lifetime caps
of  2%  and  6%,  respectively. Accordingly, the Company's non-agency-conforming
loans  could  be  sold only after incurring certain costs and/or discounting the
purchase  price.  The  Company  however,  currently  does not intend to sell its
loans.  The  Company  has  historically  found  that  its  origination  of
non-agency-conforming  loans  has not resulted in high amounts of non-performing
loans.  In addition, the Company believes that these loans satisfy a need in the
Company's  local  community.  As  a  result,  the Company intends to continue to
originate  such  non-agency-conforming  loans.

     The retention of ARM loans in the Company's loan portfolio helps reduce the
Company's  exposure  to  changes  in  interest  rates.  There  are,  however,
unquantifiable  credit risks resulting from the potential of increased costs due
to changed rates to be paid by the customer.  It is possible that during periods
of  rising  interest  rates  the  risk of default on ARM loans may increase as a
result  of  repricing  and  the  increased  costs to the borrower.  Furthermore,
because  the  ARM  loans  originated  by  the  Company  generally  provide, as a
marketing  incentive,  for  initial rates of interest below the rates that would
apply  were the adjustment index used for pricing initially (discounting), these
loans  are  subject  to  increased  risks  of  default  or delinquency.  Another
consideration  is  that  although  ARM  loans  allow the Company to increase the
sensitivity  of  its asset base to changes in interest rates, the extent of this
interest  sensitivity  is  limited  by  the  periodic and lifetime interest rate
adjustment  limits.  Because  of  these  considerations,  the  Company  has  no
assurance that yields on ARM loans will be sufficient to offset increases in the
Company's  cost  of  funds.


                                      -4-
<PAGE>
     While  fixed-rate  single-family residential real estate loans are normally
originated with up to 10-year terms, such loans typically remain outstanding for
substantially  shorter  periods.  This  is  because borrowers often prepay their
loans  in full upon sale of the property pledged as security or upon refinancing
the  original  loan.  In  addition,  some  mortgage  loans in the Company's loan
portfolio contain due-on-sale clauses providing that the Company may declare the
unpaid  amount  due and payable upon the sale of the property securing the loan.
Typically,  the  Company  enforces  these  due-on-sale  clauses  to  the  extent
permitted  by law and as business judgment dictates. Thus, average loan maturity
is  a  function of, among other factors, the level of purchase and sale activity
in  the  real  estate  market,  prevailing interest rates and the interest rates
payable  on  outstanding  loans.

     The  Company  generally requires title insurance insuring the status of its
lien  on  all  of the real estate secured loans.  The Company also requires that
fire  and  extended  coverage  casualty  insurance  (and,  if appropriate, flood
insurance)  be  maintained  in  an amount at least equal to the outstanding loan
balance.

     Appraisals  are obtained on all properties and are conducted by independent
fee  appraisers  approved by the Board of Directors of its bank subsidiary.  The
Company's  lending  policies  generally limit the maximum loan-to-value ratio on
mortgage  loans secured by owner-occupied properties to 80% of the lesser of the
appraised value or the purchase price, with the condition that the loan-to-value
ratio  may be increased to 90% provided that private mortgage insurance coverage
is  obtained  for  the  amount  in  excess  of  80%.

     INCOME  PROPERTY LENDING.  Historically, the Company has engaged in limited
amounts  of  commercial  real  estate  and  multi-family  lending (collectively,
"income  property  lending").  The  Company  does  not  actively  solicit income
property  loans  but  generally  extends  them  as  an accommodation to existing
customers  and  intends  to  continue  to do so in the future.  At September 30,
2001, income property loans aggregated $7.4 million, or 10.09% of the gross loan
portfolio.

     Substantially  all  of  the income property loans are secured by properties
located  in  the  Company's  market  area.  Such  properties include residential
properties  of  five  or  more  units, strip shopping malls generally containing
between  two  and  six store fronts, churches, and professional offices.  Income
property  loans  are  generally made for terms of 20 years with five- to 10-year
balloon  payments  and  at  variable  interest  rates  that  adjust  annually.

     Income  property  loans  generally  involve  greater  risks  than  one-  to
four-family  residential  mortgage  loans.  Payments  on  loans  secured by such
properties  often  depend  on  successful  operation  and  management  of  the
properties.  Repayment  of  such  loans  may  be  subject to a greater extent to
adverse conditions in the real estate market or the economy.  The Company  seeks
to  minimize  these  risks  in a variety of ways, including limiting the size of
such  loans,  limiting  the  maximum  loan-to-value  ratio  to  70% and strictly
scrutinizing  the  financial  condition  of  the  borrower,  the  quality of the
collateral  and  the  management  of the property securing the loan.  All of the
properties  securing  the  Company's  income property loans are inspected by the
Company's  lending personnel before the loan is made.  The Company  also obtains
appraisals  on  each  property  in  accordance  with  applicable  regulations.

     CONSTRUCTION  LENDING.  The  Company  occasionally  originates  residential
construction  loans  to  individuals  or  local  builders  to  construct one- to
four-family  homes.  At  September  30,  2001,  construction  loans totaled $1.8
million,  or  2.44%  of  the  gross  loan  portfolio.

     Substantially  all  construction  loans made to individuals provide for the
Company  to  originate  a  permanent  loan  upon the completion of construction,
which  is  generally  an  ARM  loan as described under "-- Lending Activities --
Residential Real Estate Lending."  The origination fee for construction loans is
generally  1.5%  of the principal amount.  Construction loans are generally made
for  terms  of up to six months.  Loans to builders are made less frequently and
may  be  for the construction of a pre-sold home or may be a loan to construct a
speculative  home  (i.e.,  a  home  for which no purchaser has been identified).
Loans  to  builders  are  generally  limited to local builders well known to the
Company.

     Construction  lending  is generally considered to involve a higher level of
risk  as  compared to one- to four- family residential permanent lending because
of  the  inherent difficulty in estimating both a property's value at completion
of the project and the estimated cost of the project.  The nature of these loans
is  such that they are generally more difficult to evaluate and monitor.  If the
estimate  of value proves to be inaccurate, the Company may be confronted at, or


                                      -5-
<PAGE>
prior  to,  the maturity of the loan, with a project whose value is insufficient
to  assure full repayment. Loans for the construction of speculative homes carry
more  risk because the payoff for the loan is dependent on the builder's ability
to  sell  the  property  prior  to  the  time that the construction loan is due.

     LAND  LENDING.  The Company originates loans secured by farm residences and
combinations  of  farm  residences  and  farm  real  estate.  The  Company  also
originates  loans  for the acquisition of land upon which the purchaser can then
build  or upon which the purchaser makes improvements necessary to build upon or
to  sell  as  improved  lots.  At  September  30,  2001, the land loan portfolio
totaled  $2.8 million, or 3.84% of total gross loans, substantially all of which
were secured by properties located in the Company's market area.  Land loans are
generally  made  for  the  same  terms  and  at the same interest rates as those
offered  on  income  property  loans,  except  that  the  loan-to-value ratio is
generally  limited  to  60%.

     Loans secured by farm real estate generally involve greater risks than one-
to  four-family  residential  mortgage loans.  Payments on loans secured by such
properties  may,  in  some  instances,  be  dependent  on  farm  income from the
properties.  To  address  this  risk, the Company  does not consider farm income
when  qualifying  borrowers.  In  addition,  such  loans  are  more difficult to
evaluate.  If  the estimate of value proves to be inaccurate, the Company may be
confronted  with  a  property  the value of which is insufficient to assure full
repayment  in  the  event  of  default  and  foreclosure.

     AGRICULTURAL  LENDING.  At  September  30,  2001,  the  agricultural  loan
portfolio  totaled  $3.6  million  or  4.88%  of  total gross loans. The Company
presently  originates  both  adjustable-rate  and  fixed-rate  loans  secured by
farmland  located  in  the  Company's  market  area.  The  Company  offers
adjustable-rate  loans  that  adjust  monthly,  quarterly  and  annually  with
maturities  up to a 25-year term.  The Company also offers fixed-rate loans with
a  10-year  term  and  a 10-year amortization schedule.  The Company  also makes
agricultural  operating  loans.  Agricultural operating loans or lines generally
are  made  for a term  of one year and are usually  secured by a first or second
mortgage,  or  liens  on  property,  farm  equipment,  grain,  or growing crops.
Personal  guarantees  are frequently required for loans made to corporations and
other  business  entities.  The  agriculture  loan  portfolio is diversified and
there  is  no  concentration  to  any  one  borrower.

      In originating an agricultural real estate loan, the Company considers the
debt service coverage of the borrower's cash flow, the amount of working capital
available to the borrower, the financial history of the farmer and the appraised
value  of  the  underlying property as well as the Company's experience with and
knowledge  of the borrower.  An environmental assessment is also performed.  The
maximum  loan-to-value  for  agricultural  real  estate  loans  is  75%.

     The Company is approved to originate agricultural real estate and operating
loans with guarantees from USDA-FMHA up to a maximum of 90% of the principal and
interest.  Once  the  guaranteed  loan  has been funded, the Company retains the
loan  in  its  loan  portfolio.

     Agricultural  lending  affords  the  Company the opportunity to earn yields
higher  than  those  obtainable  on  residential  real estate lending.  However,
agricultural  lending  involves  a  greater degree of risk than residential real
estate  loans.  Payments  on  agricultural loans are dependent on the successful
operation  or management of the farm property securing the loan.  The success of
the  farm  may  be  affected  by  many  factors  outside the control of the farm
borrower,  including  adverse weather conditions that limit crop yields (such as
hail,  drought  and floods), declines in market prices for agricultural products
and  the  impact of government regulations (including changes in price supports,
subsidies and environmental regulations).  In addition, many farms are dependent
on  a  limited number of key individuals whose injury or death may significantly
affect  the  successful  operation  of  the  farm.

     The  risk of crop damage by weather conditions can be reduced by the farmer
with  multi-peril  crop  insurance  which  can  guarantee  set yields to provide
certainty  of  repayment.  Unless  the  circumstances  of  the  borrower  merit
otherwise,  the  Company  generally  does  not  require its borrowers to procure
multi-peril  crop  or  hail  insurance. Farmers may mitigate the effect of price
declines through the use of futures contracts, options or forward contracts. The
Company  does  not monitor or require the use by borrowers of these instruments.


                                      -6-
<PAGE>
     COMMERCIAL  LENDING   Commercial business loans generally include equipment
loans  with  terms ranging up to seven years and working capital lines of credit
secured  by inventory and accounts receivable.   Working capital lines of credit
are generally renewable and made for a one-year term with a requirement that the
borrower  extinguish any outstanding balance for a particular time period during
the  year.  Interest rates on commercial business loans are generally indexed to
the prime rate or an internal base rate.  The Company  generally requires annual
financial  statements  from  its  commercial  business  borrowers  and  personal
guarantees  if  the  borrower  is  a  corporation.  At  September  30, 2001, the
Company's  commercial  loans  totaled approximately $6.2 million or 8.53% of the
Company's  gross  loans.

     Commercial  business  lending  generally  involves  greater  risk  than
residential  mortgage  lending  and involves risks that are different from those
associated  with  residential,  commercial and multi-family real estate lending.
Real  estate lending is generally considered to be collateral based lending with
loan amounts based on predetermined loan to collateral values and liquidation of
the  underlying  real  estate  collateral  is  viewed  as  the primary source of
repayment  in the event of borrower default.  Although commercial business loans
are  often  collateralized by equipment, inventory, accounts receivable or other
business  assets,  the  liquidation  of  collateral  in  the event of a borrower
default  is  often  not  a  sufficient  source  of  repayment  because  accounts
receivable may be uncollectible and inventories and equipment may be obsolete or
of  limited use, among other things.  Accordingly, the repayment of a commercial
business loan depends primarily on the creditworthiness of the borrower (and any
guarantors),  while  liquidation  of  collateral  is  a  secondary  and  often
insufficient  source  of  repayment.

     CONSUMER LENDING.   Consumer loans generally have shorter terms to maturity
and  higher  interest  rates  than mortgage loans.  The Company's consumer loans
consist  primarily of home equity loans, deposit account loans, automobile loans
and,  to a substantially lesser extent, unsecured loans.  At September 30, 2001,
the  Company's  consumer  loans totaled approximately $8.5 million, or 11.66% of
the Company's gross loans.  The Company intends to emphasize consumer lending to
a  greater  degree  by  primarily  cross-selling  to its existing customer base.

     Consumer  loans  are  made  at  fixed interest rates and for varying terms.
Automobile  and  other loans are generally made for terms up to 60 months, while
home  equity  loans  are  made  for  terms  up  to  10  years.  With  respect to
substantially all home equity loans, the Company holds the first mortgage on the
borrower's  residence.

     Consumer  loans  entail  greater  risk  than do residential mortgage loans,
particularly  in  the  case  of consumer loans which are unsecured or secured by
rapidly depreciating assets such as automobiles.  In such cases, any repossessed
collateral  for  a defaulted consumer loan may not provide an adequate source of
repayment  of the outstanding loan balance as a result of the greater likelihood
of  damage,  loss  or  depreciation.  The  remaining  deficiency  often does not
warrant  further  substantial  collection  efforts  against  the borrower beyond
obtaining  a  deficiency  judgment.  In  addition, consumer loan collections are
dependent  on  the  borrower's continuing financial stability, and thus are more
likely  to  be  adversely  affected  by  job  loss, divorce, illness or personal
bankruptcy.  Furthermore,  the  application  of  various federal and state laws,
including federal and state bankruptcy and insolvency laws, may limit the amount
that  can  be  recovered  on  such  loans.

     LOAN  SOLICITATION  AND  PROCESSING.  Loan  applicants  come primarily from
walk-in  customers  and referrals by realtors and previous and present customers
of  the Company. Upon receipt of a loan application from a prospective borrower,
a  credit  report  and  other  data  are obtained to verify specific information
relating  to  the  loan  applicant's  employment, income and credit standing. An
appraisal  of the real estate offered as collateral generally is undertaken by a
Board-approved  independent  fee  appraiser  who  is  certified  by the State of
Missouri.

      Consumer  loans  may  be made by loan officers up to amounts authorized by
the bank's loan policies.  All  loans over specified amounts must be approved by
the  Board  of  Directors  of  the  bank  subsidiary.  Management of the Company
believes  its  local  decision-making  capabilities and the accessibility of its
senior  officers  is  an attractive quality to customers within its market area.
The  Company's loan approval process allows consumer loans to be approved in one
to  two  days  and  to  expedite  the  approval  and  closing of mortgage loans.

     LOAN  ORIGINATIONS,  SALES  AND PURCHASES.  During the year ended September
30,  2001,  the  Company's  total  gross  loan  originations were $37.4 million.
Consistent  with  its  asset/liability management strategy, the Company's policy


                                      -7-
<PAGE>
has  been  to retain in its portfolio nearly all of the loans that it originates
except for loans originated by the mortgage banking subsidiary.  During the year
ended  September  30,  2001,  the  mortgage  banking  subsidiary originated $4.1
million of loans held-for-sale, and sold $4.2 million into the secondary market.

     The  Company  has occasionally purchased whole loans and loan participation
interests,  primarily  during periods of reduced loan demand in its market area.
At  September  30,  2001,  $5.6  million  of  the Company's gross loan portfolio
consisted  of  purchased whole loans and purchased participation interests.  Any
such  purchases  are  made  in  conformance  with  the  Company's  underwriting
standards.  The  Company  may  decide to purchase additional loans in the future
depending  upon  the demand for mortgage credit in its market area.   During the
fiscal  year  ended  September  30,  2001, the Company purchased $1.9 million of
mortgage  loans and $2.9 million of commercial and commercial real estate loans.

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

<TABLE>
<CAPTION>
                                        Years Ended September 30,
                                     -------------------------------
                                       2001       2000       1999
                                     ---------  ---------  ---------
<S>                                  <C>        <C>        <C>
                                              (In Thousands)
Total loans at beginning of period.  $ 65,249   $ 62,672   $ 62,896
                                     ---------  ---------  ---------
Loans originated:
 One-to four family . . . . . . . .    11,732      9,575      8,231
 Commercial real estate and
   multi-family . . . . . . . . . .     3,961      1,171      3,324
 Land . . . . . . . . . . . . . . .     1,720        947        540
 Construction . . . . . . . . . . .     1,926      1,178      3,298
                                     ---------  ---------  ---------
   Total mortgage loans originated.    19,339     12,871     15,393
 Commercial loans.. . . . . . . . .     3,403      2,811      3,430
 Agriculture loans. . . . . . . . .     3,166      1,765      3,429
 Consumer and other loans . . . . .    11,499      8,833      7,785
                                     ---------  ---------  ---------
   Total loans originated . . . . .    37,407     26,280     30,037
Loans purchased:
 One-to-family. . . . . . . . . . .     1,850          -        559
 Commercial . . . . . . . . . . . .     2,941          -          -
                                     ---------  ---------  ---------
   Total loans purchased. . . . . .     4,791          -        559
Loans sold:
  One-to-four family. . . . . . . .      (900)         -          -
Principal repayments. . . . . . . .   (33,347)   (23,671)   (30,761)
Loans charged off . . . . . . . . .       (93)       (32)       (59)
                                     ---------  ---------  ---------
Net loan activity . . . . . . . . .     7,858      2,577       (224)
                                     ---------  ---------  ---------
At end of period:
 Total gross loans. . . . . . . . .  $ 73,107   $ 65,249   $ 62,672
                                     =========  =========  =========
</TABLE>

LOAN  COMMITMENTS.  The  Company  issues,  without  fee, commitments for one- to
four-family residential mortgage loans and operating or working capital lines of
credit.  Such  commitments are made in writing on specified terms and conditions
and  at  a  specified  rate  of  interest.  The company had outstanding net loan
commitments of approximately $8.8 million at September 30, 2001, $6.5 million of
which  were  for  variable  rate  loans.  See  Note  M  of Notes to Consolidated
Financial  Statements.

     LOAN  ORIGINATION AND OTHER FEES.  The Company, in some instances, receives
loan  origination  fees.  Loan  fees are a percentage of the principal amount of
the  loan which are charged to the borrower for funding the loan.  The amount of
fees  charged  by  the Company is generally up to 1% for mortgage loans and 1.5%
for  construction  loans.  Current accounting standards require that origination


                                      -8-
<PAGE>
fees  received  (net of certain loan origination costs) for originating loans to
be  deferred and amortized into interest income over the contractual life of the
loan.  Net  deferred  fees  or  costs associated with loans that are prepaid are
recognized  as  income  at  the  time  of  prepayment.

     NON-PERFORMING ASSETS AND DELINQUENCIES. When a loan borrower fails to make
a  required loan payment when due, the Company institutes collection procedures.
All  loan  payments that are contractually due are not considered delinquent and
collection procedures are not instituted until after the "actual due date" which
may  vary  between  15  to 30 days following the payment due date. Borrowers are
charged  a  late penalty on all payments made after the actual due date. On real
estate, commercial and agriculture loans, a pre-foreclosure letter setting forth
a  date certain (generally 35 days after the date of the letter) for instituting
foreclosure procedures is mailed on or before 90 days after the actual due date.
Foreclosure  procedures  are  instituted  on  the  date  specified  in  the
pre-foreclosure  letter  if  the  delinquency  continues  to  that  date.

     When  a  consumer  loan  borrower  fails  to  make  a required payment on a
consumer loan within seven  days of the payment due date, the Company institutes
collection procedures.  The first notice is mailed to the borrower approximately
seven  days following the actual due date.  If payment is not promptly received,
a  second  and  third notices are mailed to the borrower approximately 15 and 20
days following the actual due date and the customer is contacted by telephone to
ascertain the cause of the delinquency.  If the delinquency remains uncured, the
Bank  mails  an additional notice to the borrower on or before 30 days following
the  actual due date.  In most cases, delinquencies are cured promptly; however,
if  by  the  90th  day  of  delinquency  the delinquency has not been cured, the
Company  begins legal action to repossess the collateral.  The Company transfers
to  repossessed  assets the estimated market value of the collateral and charges
the  allowance  for  loan  losses with any deficiency at foreclosure. Except for
extenuating  circumstances  loan  past  due  120  days  are  charged  off.

     The Board of Directors of the Company's bank subsidiary is informed monthly
as to the status of all  loans that are delinquent more than 30 days, the status
on  all  loans  currently  in  foreclosure, and the status of all foreclosed and
repossessed  property  owned  by  the  Bank.

     The  Company has experienced fluctuating and, periodically, relatively high
levels  of  loan delinquencies.  Management attributes this experience primarily
to  its  practice, consistent with its mission as a community-oriented financial
institution,  of  offering  non-agency-conforming  loan  products  that  enable
borrowers  with lesser financial resources to otherwise qualify for a loan.  The
Company's  loss  experience,  however,  as measured by charge offs, has not been
significant.  See  "--  Lending  Activities  --  Allowance for Loan Losses."  No
assurances  can  be  given  as  to  future  delinquency  and  loss  levels.


                                      -9-
<PAGE>
     The  following  table  sets  forth  information  regarding  the  Company's
delinquent  loans,  excluding loans 90 days or more delinquent and accounted for
on  a  non-accrual  basis.

<TABLE>
<CAPTION>
                                              At September 30,
                                2001                     2000                     1999
                             ----------               ----------               ----------
                                    Percentage               Percentage               Percentage
                        Principal    of Gross    Principal    of Gross    Principal    of Gross
                         Balance       Loans      Balance       Loans      Balance       Loans
                        ----------  -----------  ----------  -----------  ----------  -----------
<S>                     <C>         <C>          <C>         <C>          <C>         <C>
                                                  (Dollars in Thousands)
Loans delinquent for:
  30-59 days . . . . .  $    4,592        6.27%  $    2,177        3.32%  $    1,453        2.32%
  60-89 days . . . . .       1,030        1.41%         809        1.23%         741        1.18%
                        ----------  -----------  ----------  -----------  ----------  -----------
                        $    5,622        7.68%  $    2,986        4.55%  $    2,194        3.50%
                        ==========  ===========  ==========  ===========  ==========  ===========
</TABLE>

     The  following  table  sets forth information with respect to the Company's
non-performing  assets  at  the dates indicated. The Company had no restructured
loans within the meaning of Statement of Financial Accounting Standards ("SFAS")
No.  15,  at  any  of the dates indicated. However, at September 30, 2001, there
were  loans  totaling $114,000 which were past due contractually 90 days or more
as to principal or interest that were still accruing interest. In the opinion of
management  collection  of  principal and interest on these loans is expected to
resume  and  sufficient  collateral  is believed to exist to protect the Company
from  any  significant  loss.

<TABLE>
<CAPTION>
                                                   At September 30,
                                                 2001    2000    1999
                                                ------  ------  ------
<S>                                             <C>     <C>     <C>
                                               (Dollars in Thousands)
Loans accounted for on a non-accrual basis
 Loans 90 days or more past due:
   Residential real estate . . . . . . . . . .  $ 319   $ 341   $ 377
   Commercial real estate. . . . . . . . . . .     89       -       -
   Commercial loans. . . . . . . . . . . . . .    114       -       -
   Agricultural loans. . . . . . . . . . . . .     52       -       -
   Consumer and other loans. . . . . . . . . .    117      26      20
 Loans 30 to 89 days past due:
  Residential real estate. . . . . . . . . . .      -      17      21
  Consumer . . . . . . . . . . . . . . . . . .      -      10       7
                                                ------  ------  ------
Total non-accrual loans. . . . . . . . . . . .    691     394     425
Accruing loans 90 days or more past due
 Consumer loans. . . . . . . . . . . . . . . .    114      47      13
                                                ------  ------  ------
Total accruing loans 90 days or more past due     114      47      13
                                                ------  ------  ------
Total loans past due 90 days or more . . . . .    805     441     438
Real estate owned. . . . . . . . . . . . . . .      -       -      32
                                                ------  ------  ------
     Total non-performing assets                $ 805   $ 441   $ 470
                                                ======  ======  ======
Total non-performing loans to net loans          1.11%   0.68%   0.71%
                                                ======  ======  ======
Total non-performing loans to total assets       0.64%   0.41%   0.41%
                                                ======  ======  ======
Total non-performing assets to total assets      0.64%   0.41%   0.44%
                                                ======  ======  ======
</TABLE>

At  September  30,  2001,  management of the Company was unaware of any material
loans  not  disclosed  in  the  above  table  but  where known information about
possible  credit  problems  of  the  borrowers caused management to have serious
doubts  as  to the ability of such borrowers to comply with their loan repayment
terms  at  that  date  and  which  may  result  in  future  inclusion  in  the
non-performing  assets  category.


                                      -10-
<PAGE>
     The  amount  of  interest  collected in cash and included in the results of
operations  on non-accruing loans for the year ended September 30, 2001 amounted
to  approximately $44,000, before such loans were placed on non- accrual status.
Had  such  non-accruing  loans  been  current  in accordance with their original
terms, an additional $15,000 of interest income would have been recorded for the
year  ended  September  30,  2001.

     FORECLOSED  REAL ESTATE.  See Note A of Notes to the Consolidated Financial
Statements  for  a  discussion  of  the  Bank's  procedures  for  accounting for
foreclosed  real estate.  The Company had no foreclosed real estate at September
30,  2001.

     ASSET  CLASSIFICATION.  The  Federal  regulators  have  adopted  various
regulations  regarding  problem  assets of banking institutions. The regulations
require  that  each  insured  institution  review  and  classify its assets on a
regular  basis.  In  addition,  in  connection  with  examinations  of  insured
institutions,  bank  examiners have authority to identify problem assets and, if
appropriate,  require them to be classified. There are three classifications for
problem  assets:  substandard, doubtful and loss. Substandard assets have one or
more  defined  weaknesses and are characterized by the distinct possibility that
the  insured  institution  will  sustain  some  loss if the deficiencies are not
corrected.  Doubtful  assets  have the weaknesses of substandard assets with the
additional  characteristic that the weaknesses make collection or liquidation in
full  on  the  basis  of  currently  existing  facts,  conditions  and  values
questionable,  and  there  is a high possibility of loss. An asset classified as
loss is considered uncollectible and of such little value that continuance as an
asset  of  the  institution  is not warranted. If an asset or portion thereof is
classified  as loss, the insured institution establishes specific allowances for
loan  losses for the full amount of the portion of the asset classified as loss.
All  or  a portion of general loan loss allowances established to cover possible
losses  related  to assets classified substandard or doubtful may be included in
determining  an  institution's  regulatory  capital,  while  specific  valuation
allowances  for  loan  losses  generally  do  not qualify as regulatory capital.
Assets  that  do not currently expose the insured institution to sufficient risk
to  warrant  classification  in one of the aforementioned categories but possess
weaknesses  are  designated  "special mention" and are monitored by the Company.

     The  aggregate  amounts  of the Company's classified assets and general and
specific  loss  allowances  at  the  dates  indicated,  were  as  follows:

<TABLE>
<CAPTION>
                                        At September 30,
                                     ---------------------
                                      2001   2000    1999
                                     ------  -----  ------
<S>                                  <C>     <C>    <C>
                                          (In Thousands)
Loss. . . . . . . . . . . . . . . .  $    -  $   -  $    -
Doubtful. . . . . . . . . . . . . .       -      -       7
Substandard assets. . . . . . . . .     805    579   1,111
Special mention . . . . . . . . . .     373    146     587
                                     ------  -----  ------
  Total classified assets . . . . .  $1,178  $ 725  $1,705
                                     ======  =====  ======

General loss allowances . . . . . .  $  720  $ 648  $  599
Specific loss allowances. . . . . .       -      -       -
                                     ------  -----  ------
  Total allowances for loan losses.  $  720  $ 648  $  599
                                     ======  =====  ======
</TABLE>

     ALLOWANCE  FOR  LOAN  LOSSES.  The  Company  has  established  a systematic
methodology  for  determining provisions for loan losses. The methodology is set
forth in a formal policy and considers the need for an overall general valuation
allowance  as  well  as  specific  allowances  for  individual  loans.


                                      -11-
<PAGE>
     In  originating  loans,  the  Company  recognizes  that  losses  will  be
experienced  and  that  the risk of loss will vary with, among other things, the
type  of  loan being made, the creditworthiness of the borrower over the term of
the  loan,  general  economic conditions and, in the case of a secured loan, the
quality  of  the  security for the loan. The Company increases its allowance for
loan  losses  by  charging  provisions  for  loan  losses  against  income.

     The  general  valuation allowance is maintained to cover losses inherent in
the  portfolio  of  performing  loans.  Management  reviews  the adequacy of the
allowance  at  least  quarterly  based  on  management's  assessment  of current
economic  conditions,  past  loss  and  collection  experience,  and  risk
characteristics  of the loan portfolio.  The amount of the allowance is based on
management's  evaluation  of  the  collectibility  of the loan 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 flow.
Specific  valuation  allowances  are  established  to absorb losses on loans for
which  full  collectibility  may  not  be reasonably assured.  The amount of the
allowance  is  based  on the estimated value of the collateral securing the loan
and  other  analyses  pertinent  to  each  situation.

     At  September  30,  2001,  the  Company had an allowance for loan losses of
$720,000,  which management believed to be adequate to absorb losses inherent in
the  portfolio at that date.  Although management believes that it uses the best
information  available  to  make  such determinations, future adjustments to the
allowance  for  loan  losses may be necessary and results of operations could be
significantly  and adversely affected if circumstances differ substantially from
the  assumptions  used  in  making  the  determinations.

     While  the  Company  believes it has established its existing allowance for
loan  losses  in accordance with generally accepted accounting principles, there
can  be no assurance that regulators, in reviewing the Company's loan portfolio,
will  not  request  the Company to increase significantly its allowance for loan
losses.  In  addition,  because future events affecting borrowers and collateral
cannot  be predicted with certainty, there can be no assurance that the existing
allowance  for loan losses is adequate or that substantial increases will not be
necessary should the quality of any loans deteriorate as a result of the factors
discussed  above.  Any  material  increase  in the allowance for loan losses may
adversely  affect  the  Company's financial condition and results of operations.


                                      -12-
<PAGE>
     The  following  table sets forth an analysis of the Company's allowance for
loan  losses  for the periods indicated.  Where specific loan loss reserves have
been  established, any differences between the loss allowances and the amount of
loss  realized  has been charged or credited to current income.  As indicated by
the  table,  there  has  not been any material fluctuations in the allowance for
loan  losses.  Periodically,  however,  the  allowance for loan losses  has been
replenished  despite  a low level of charge-offs.  No assurances can be given as
to  the  level  of  future  charge  offs.

<TABLE>
<CAPTION>
                                     Year Ended September 30,
                                   ----------------------------
                                     2001      2000      1999
                                   --------  --------  --------
<S>                                <C>       <C>       <C>
                                      (Dollars in Thousands)
Allowance at beginning of period.  $   648   $   599   $   599
Provision for loan losses . . . .      144        70        36
Recoveries:
 Residential real estate. . . . .        -         -         -
 Commercial real estate and
   multi-family . . . . . . . . .        -         -         3
 Commercial loans . . . . . . . .        -         -         4
 Construction . . . . . . . . . .        -         1         -
 Consumer . . . . . . . . . . . .       21        10        16
                                   --------  --------  --------
    Total recoveries. . . . . . .       21        11        23
Charge offs:
 Residential real estate. . . . .        3         -        13
 Commercial real estate and
   multi-family . . . . . . . . .        -         -        19
 Commercial loans . . . . . . . .        -         -         -
 Construction . . . . . . . . . .        -         -         -
 Consumer . . . . . . . . . . . .       90        32        27
                                   --------  --------  --------
   Total charge-offs. . . . . . .       93        32        59
                                   --------  --------  --------
   Net charge-offs. . . . . . . .       72        21        36
                                   --------  --------  --------
Balance at end of period. . . . .  $   720   $   648   $   599
                                   ========  ========  ========

Ratio of allowance to total
 loans outstanding at the
 end of period                        0.98%     0.99%     0.95%
                                   ========  ========  ========

Ratio of net charge-offs to
 average loans outstanding
 during the period                    0.11%     0.03%     0.06%
                                   ========  ========  ========

Ratio of allowance to
 non-accrual loans                  104.20%   164.47%   140.94%
                                   ========  ========  ========
</TABLE>


                                      -13-
<PAGE>
     The  following  table  sets  forth  the breakdown of the allowance for loan
losses  by loan category for the periods indicated. The portion of the allowance
to  each  loan  category  does not necessarily represent the total available for
losses within that category since the total allowance applies to the entire loan
portfolio.  The  allocation of the allowance to each category is not necessarily
indicative  of  future  losses and does not restrict the use of the allowance to
absorb  losses  in  any  other  category.

<TABLE>
<CAPTION>
                                                           At  September  30,
                                             2001                2000                1999
                                                       % of                % of                % of
                                                       Loans               Loans               Loans
                                                      in Each             in Each             in Each
                                                     Category            Category            Category
                                                     to Total            to Total            to Total
                                            Amount     Loans    Amount     Loans    Amount     Loans
                                            -------  ---------  -------  ---------  -------  ---------
<S>                                         <C>      <C>        <C>      <C>        <C>      <C>
                                                              (Dollars in Thousands)
        Real estate mortgage:
          One-to-four family                $   137     58.57%  $   110     61.68%  $   100     62.93%
          Commercial real estate and
           multi-family                         153     10.09%      170      9.78%      150      9.10%
          Land                                    -      3.84%        -      2.73%        -      1.78%
          Construction                            -      2.44%        -      2.16%        -      1.87%
        Commercial loans                        137      8.52%       90      2.98%      100      4.49%
        Agricultural loans                       25      4.88%       25      4.73%       25      5.15%
        Consumer and other loans                247     11.66%      180     15.94%      150     14.68%
        Unallocated                              21         -        73         -        74         -
                                            -------  ---------  -------  ---------  -------  ---------
          Total allowance for loan losses   $   720    100.00%  $   648    100.00%  $   599    100.00%
                                            =======  =========  =======  =========  =======  =========
</TABLE>

     INVESTMENT  ACTIVITIES

     The  Company  is  permitted under federal law to invest in various types of
liquid  assets,  including  U.S.  Treasury  obligations,  securities  of various
federal  agencies  and  of  state  and  municipal  governments,  deposits at the
FHLB-Des  Moines,  certificates  of  deposit  of federally insured institutions,
certain bankers' acceptances and federal funds. Subject to various restrictions,
the  Company  may  also  invest  a portion of its assets in commercial paper and
corporate  debt securities. Savings institutions like B&L Bank are also required
to  maintain  an  investment  in  FHLB  stock.

     B&L  Bank  is  required  under  federal  regulations to maintain sufficient
liquidity  to  meet  deposit  fluctuations,  loan  demand,  and  debt  service
requirements.  At  September  30,  2001,  B&L  Bank's  liquidity,  stated  as  a
percentage  of  liquid  asset to short term liabilities and deposit outflow, was
44%,  compared to its liquidity policy minimum ratio of 10%.  Management intends
to hold all securities in B&L Bank's investment portfolio in order to enable B&L
Bank  to  provide  liquidity  for  loan funding upon maturity of such investment
securities  and  to  match  more  closely the interest-rate sensitivities of its
assets  and  liabilities.

     The  Board  of  Directors of B&L Bank has approved an investment policy and
procedures.  The  investment  policy  generally  limit  investments  to  U.  S.
Government  and  agency  securities,  municipal bonds, certificates of deposits,
marketable  investment  grade  corporate  debt  obligations  and mortgage-backed
securities.


                                      -14-
<PAGE>
     Investments  are  made  based  on certain considerations, which include the
interest  rate, yield, settlement date and maturity of the investment, liquidity
position,  and  anticipated  cash  needs  and  sources  (which  in  turn include
outstanding commitments, upcoming maturities, estimated deposits and anticipated
loan amortization and repayments). The effect that the proposed investment would
have  on  the Company's credit and interest rate risk, and risk-based capital is
also  given  consideration  during  the  evaluation.

     At  September  30,  2001,  the  Company's  portfolio  classified  as
"available-for-sale"  contained  mortgage  backed securities and certain Federal
Agency  obligations. The "held-to-maturity" contained all of the state and local
debt  securities  and  a  portion of its portfolio of federal agency securities.
Consistent  with the Company's asset/liability management strategy, at September
30,  2001, the majority of the investment portfolio matures within five years of
that  date. See Note B of Notes to the Consolidated Financial Statements for the
specific  classification  of  securities  under  SFAS  No.  115.

     The  following  table  sets  forth  the  composition  of  the  Company's
mortgage-backed  securities  portfolio at carrying value at the dates indicated.

                                          At September 30,
                                   2001       2000       1999
                                 ---------  ---------  ---------
                                 Carrying   Carrying   Carrying
                                   Value      Value      Value
                                 ---------  ---------  ---------
                                          (In Thousands)
        Government National
          Mortgage Association
         ("GNMA")                $   3,442  $     220  $     295
        Fannie Mae                   9,484        142        169
        Freddie Mac                  4,199        170        203
                                 ---------  ---------  ---------

              Total              $  17,125  $     532  $     667
                                 =========  =========  =========


                                      -15-
<PAGE>
     The  following table sets forth the composition of the Company's investment
securities  portfolio  and  FHLB  stock  at  the  dates  indicated.

<TABLE>
<CAPTION>
                                                     At September 30,
                                   2001                    2000                    1999
                                 ---------               ---------               ---------
                                 Carrying   Percent of   Carrying   Percent of   Carrying   Percent of
                                   Value     Portfolio     Value     Portfolio     Value     Portfolio
                                 ---------  -----------  ---------  -----------  ---------  -----------
<S>                              <C>        <C>          <C>        <C>          <C>        <C>
                                                              (in Thousands)
Investment securities:
   U.S. Government and Federal
   Agency obligations            $   9,473       30.75%  $  25,638       85.40%  $  27,675       84.63%
   State and local obligations       4,213       13.67%      3,851       12.83%      4,358       13.33%
   Mortgage-backed securities       17,125       55.58%        532        1.77%        667        2.04%
                                 ---------  -----------  ---------  -----------  ---------  -----------
Total investment securities      $  30,811      100.00%  $  30,021      100.00%  $  32,700      100.00%
                                 =========  ===========  =========  ===========  =========  ===========
Capital stock-FHLB-Des Moines    $     618               $     543               $     535
                                 =========               =========               =========
</TABLE>

The dividend yield on the capital stock of the FHLB-Des Moines was 4.76% for the
fiscal  year  ended  September  30,  2001.

The following table sets forth the maturities of investment securities portfolio
at  September  30,  2001.

<TABLE>
<CAPTION>
                                                                                                 Total Investment
                                                     Book Value                                     Securities
                                        One Year    After One To    Over Five To      After       Book    Market
                                        or Less      Five Years      Ten Years      Ten Years    Value     Value
                                       ----------  --------------  --------------  -----------  --------  -------
<S>                                    <C>         <C>             <C>             <C>          <C>       <C>
                                                                     (In Thousands)
        Available for sale:
         U.S. Government and
          Federal Agencies             $       -   $       6,038   $       1,480   $        -   $ 7,518   $ 7,612
         Mortgage-backed Securities .      4,366           7,203           2,556        2,951    17,076    17,125
                                       ----------  --------------  --------------  -----------  --------  -------
        Total available for sale           4,366          13,241           4,036        2,951    24,594    24,737
        Held-to-maturity:
         U.S. Government and
          Federal Agencies                     -           1,499             252          109     1,860     1,913
         State and local obligations           5           1,094           1,476        1,638     4,213     4,281
                                       ----------  --------------  --------------  -----------  --------  -------
        Total held-to-maturity                 5           2,593           1,728        1,747     6,073     6,194
                                       ----------  --------------  --------------  -----------  --------  -------
        Total investment securities    $   4,371   $      15,834   $       5,764   $    4,698   $30,667   $30,931
                                       ==========  ==============  ==============  ===========  ========  =======
        Weighted average yield              5.49%           5.53%           5.48%        5.85%     5.55%
                                       ==========  ==============  ==============  ===========  ========
</TABLE>


                                      -16-
<PAGE>
DEPOSIT  ACTIVITIES  AND  OTHER  SOURCES  OF  FUNDS

     GENERAL.  Deposits  and  loan  repayments  are  the  major  sources  of the
Company's  funds  for  lending  and  other  investment purposes.  Scheduled loan
repayments  are  a  relatively stable source of funds, while deposit inflows and
outflows  and  loan prepayments are influenced significantly by general interest
rates  and  money market conditions.  Borrowings through the FHLB-Des Moines may
be  used  on a short-term basis to compensate for reductions in the availability
of  funds  from other sources.  At September 30, 2001, the Company  had no other
borrowing  arrangements.

     DEPOSIT  ACCOUNTS.  Substantially  all  of  the  Company's  depositors  are
residents  of  the  State  of  Missouri.  Deposits are attracted from within the
Company's  market  area  through  the  offering  of a broad selection of deposit
instruments,  including  negotiable  order of withdrawal ("NOW") accounts, money
market  deposit  accounts, regular savings accounts, certificates of deposit and
retirement  savings plans.  Deposit account terms vary, according to the minimum
balance  required,  the  time  periods  the funds must remain on deposit and the
interest  rate,  among  other  factors.  In determining the terms of its deposit
accounts,  the Company considers current market interest rates, profitability to
the Company, matching deposit and loan products and its customer preferences and
concerns.  The  Company  reviews  its  deposit  mix  and  pricing  weekly.

     The following table sets forth the composition of the Company's deposits at
September  30,  2001.

                                                        Percentage
                                                         of Total
                                               Balance   Deposits
                                               --------  --------
                                                (in Thousands)
           Checking and Savings Deposits
           -----------------------------
         Demand non-interest bearing           $  9,129     9.12%
         NOW accounts                             8,462     8.45%
         Money market accounts                   10,973    10.96%
         Passbook savings accounts                6,141     6.13%
                                               --------  --------
                                                 34,705    34.66%
           Certificates of Deposits
           ------------------------
         With balances of less than $100,000     53,332    53.26%
         With balances in excess of $100,000     12,092    12.08%
                                               --------  --------
                                                 65,424    65.34%
                                               --------  --------
        Total Deposits                         $100,129   100.00%
                                               ========  ========

          The following table indicates the amount of the Company's certificates
of  deposit of $100,000 or more by time remaining until maturity as of September
30,  2001.

            Maturity Period                 Amount
                                        ---------------
                                        (in thousands)
        Three months or less            $         2,205
        Over three through six months             3,247
        Over six through twelve months            2,318
        Over twelve months                        4,322
                                        ---------------
             Total                      $        12,092
                                        ===============

        DEPOSIT  FLOW.  The  following table sets forth the balances and changes
in  dollar  amounts  of deposits in the various types of accounts offered by the
Company  at  the  dates  indicated.


                                      -17-
<PAGE>
<TABLE>
<CAPTION>
                                                                        At September 30,
                                                      2001                            2000                 1999
                                                    --------                        --------              -------
                                                    Percent                         Percent                        Percent
                                                       of      Increase                of      Increase               of
                                           Amount    Total    (Decrease)   Amount    Total    (Decrease)  Amount    Total
                                          --------  --------  -----------  -------  --------  ----------  -------  --------
<S>                                       <C>       <C>       <C>          <C>      <C>       <C>         <C>      <C>
                                                                             (Dollars in Thousands)
Non-interest bearing                      $  9,129     9.12%       2,965   $ 6,164     7.22%        768   $ 5,396     6.57%
NOW checking                                 8,462     8.45%       1,084     7,378     8.65%       (995)    8,373    10.19%
Regular savings accounts (1)                10,973    10.96%       3,609     7,364     8.63%        998     6,366     7.75%
Money Market deposits                        6,141     6.13%          97     6,044     7.08%        816     5,228     6.36%
                                          --------  --------  -----------  -------  --------  ----------  -------  --------
                                            34,705    34.66%       7,755    26,950    31.58%      1,587    25,363    30.87%
Fixed-rate certificates which mature (1)
 Within 1 year                              41,634    41.58%         149    41,485    48.61%      7,961    33,524    40.81%
 After 1 year, but before 2 years           14,579    14.56%       5,955     8,624    10.11%     (6,301)   14,925    18.17%
 After 2 years, but before 5 years           7,976     7.97%        (198)    8,174     9.58%        (17)    8,191     9.97%
 Certificates maturing thereafter            1,235     1.23%       1,130       105     0.12%        (42)      147     0.18%
                                          --------  --------  -----------  -------  --------  ----------  -------  --------
                                            65,424    65.34%       7,036    58,388    68.42%      1,601    56,787    69.13%
                                          --------  --------  -----------  -------  --------  ----------  -------  --------
      Total                               $100,129   100.00%  $   14,791   $85,338   100.00%      3,188   $82,150   100.00%
                                          ========  ========  ===========  =======  ========  ==========  =======  ========

<FN>
(1)     Included in savings accounts and certificate balances were individual retirement account ("IRA") balances of
        $6,784,000,  $6,711,000 and $6,649,000 at September 30, 2001, 2000 and 1999, respectively.
</TABLE>

     TIME  DEPOSITS  BY RATES.  The following table sets forth the time deposits
in  the  Company  classified  by  rates  at  the  dates  indicated.

                               At September 30,
                           2001     2000     1999
                          -------  -------  -------
                               (In Thousands)

         2.00 - 2.99%     $    41  $     -  $     -
         3.00 - 3.99%       4,316      125      551
         4.00 - 4.99%      14,771      394    9,426
         5.00 - 5.99%      14,217   29,159   32,953
         6.00 - 6.99%      20,558   18,092    7,800
         7.00 - 7.99%      11,521    6,451    2,012
         8.00 - 8.99%           -    4,167    4,045
                          -------  -------  -------
            Total         $65,424  $58,388  $56,787
                          =======  =======  =======


                                      -18-
<PAGE>
          The  following  table  sets  forth  the  amount and maturities of time
deposits  at  September  30,  2001.

<TABLE>
<CAPTION>
                                                                                        Percent
                                             Amount Due                                of Total
                        Less Than     1-2        2-3       3-4     After             Certificates
                         One Year    Years      Years     Years   4 Years    Total     Accounts
                        ----------  -------  -----------  ------  --------  -------  -------------
<S>                     <C>         <C>      <C>          <C>     <C>       <C>      <C>
                                                      (in Thousands)
        2.00 - 2.99%    $       41  $     -  $         -  $    -  $      -  $    41          0.06%
        3.00 - 3.99%         3,819      497            -       -         -    4,316          6.60%
        4.00 - 4.99%        10,761    2,861          684     341       124   14,771         22.58%
        5.00 - 5.99%         9,155    2,188        1,843     314       717   14,217         21.73%
        6.00 - 6.99%        10,625    5,066        2,984     979       904   20,558         31.42%
        7.00 - 7.99%         7,233    3,967           82     139       100   11,521         17.61%
                        ----------  -------  -----------  ------  --------  -------  -------------
                        $   41,634  $14,579  $     5,593  $1,773  $  1,845  $65,424        100.00%
                        ==========  =======  ===========  ======  ========  =======  =============
</TABLE>

     DEPOSIT  ACTIVITIES.  The following table sets forth the deposit activities
of  the  Company  for  the  periods  indicated.

                                               Year Ended September 30,
                                               2001      2000     1999
                                             --------  --------  -------
        In Thousands
        Beginning balance                    $ 85,338  $85,150   $76,764
        Net Deposits (withdrawals) before
         interest credited                     10,433   (3,853)    4,075
        Interest credited                       4,358    4,041     4,311
                                             --------  --------  -------
        Net increase (decrease) in Deposits    14,791      188     8,386
                                             --------  --------  -------
        Ending balance                       $100,129  $85,338   $85,150
                                             ========  ========  =======

     BORROWINGS.  The  Company has the ability to use advances from the FHLB-Des
Moines to supplement its supply of lendable funds and to meet deposit withdrawal
requirements.  The FHLB-Des Moines functions as a central reserve bank providing
credit  for  savings  and  loan  associations and certain other member financial
institutions.  As  a  member  of  the  FHLB-Des  Moines,  the  Company's banking
subsidiaries  are authorized to apply for advances on the security of such stock
and  certain of its mortgage loans and other assets (principally securities that
are  obligations  of,  or  guaranteed  by, the U.S. Government) provided certain
creditworthiness standards have been met.  Advances are made pursuant to several
different  credit  programs.  Each  credit program has its own interest rate and
range  of  maturities.  Depending  on  the program, limitations on the amount of
advances  are based on the financial condition of the member institution and the
adequacy  of  collateral  pledged  to  secure  the  credit.


                                      -19-
<PAGE>
     The  Company  had  total new advances totaling $3.5 million during the year
ended  September 30, 2001. The following table sets forth advances for the three
years  ended  at  September  30,  2001:

<TABLE>
<CAPTION>
                                                               Year Ended September 30,
                                                               --------------------------
                                                                 2001     2000     1999
                                                               --------  -------  -------
<S>                                                            <C>       <C>      <C>
                                                                   (in Thousands)
        Average balance outstanding                            $ 8,802   $5,182   $4,280
                                                               ========  =======  =======
        Maximum amount outstanding
          at any month end                                     $10,403   $7,003   $5,494
                                                               ========  =======  =======
        Balance outstanding at end of period.                  $10,337   $7,003   $5,162
                                                               ========  =======  =======
        Weighted average interest rate
          during period                                           4.83%    5.11%    5.26%
                                                               ========  =======  =======
        Weighted average interest rate
          at end of period                                        5.45%    5.54%    5.07%
                                                               ========  =======  =======
</TABLE>


                                      -20-
<PAGE>
                                   REGULATION

GENERAL

     As  a  savings and loan holding company, the Company is required by federal
law  to  file  reports with, and otherwise comply with the rules and regulations
of,  the  OTS.  B  &  L Bank is subject to extensive regulation, examination and
supervision  by  the OTS, as its primary federal regulator, and the FDIC, as the
deposit  insurer.  B  & L Bank is a member of the FHLB, and its deposit accounts
are insured up to applicable limits by the SAIF managed by the FDIC.  B & L Bank
must  file  reports  with  the  OTS  and  the FDIC concerning its activities and
financial  condition  in  addition  to  obtaining  regulatory approvals prior to
entering  into  certain  transactions  such as mergers with, or acquisitions of,
other  savings  institutions.  The  OTS  and/or  the  FDIC  conduct  periodic
examinations  to  test  B  &  L  Bank's safety and soundness and compliance with
various  regulatory requirements.  This regulation and supervision establishes a
comprehensive  framework of activities in which an institution can engage and is
intended primarily for the protection of the insurance fund and depositors.  The
regulatory  structure also gives the regulatory authorities extensive discretion
in  connection with their supervisory and enforcement activities and examination
policies,  including  policies  with respect to the classification of assets and
the  establishment  of adequate loan loss reserves for regulatory purposes.  Any
change  in  such  regulatory  requirements and policies, whether by the OTS, the
FDIC or the Congress, could have a material adverse impact on the Company, B & L
Bank and their operations.  Certain of the regulatory requirements applicable to
B  &  L  Bank and to the Company are referred to below or elsewhere herein.  The
description  of  statutory  provisions  and  regulations  applicable  to savings
institutions  and  their  holding  companies  set  forth in this report does not
purport  to be a complete description of such statutes and regulations and their
effects  on  the  Company  and  B  &  L  Bank.

HOLDING  COMPANY  REGULATION

     The  Company  is  a nondiversified unitary savings and loan holding company
within  the meaning of federal law.  Under prior law, a unitary savings and loan
holding  company,  such  as  the  Company was not generally restricted as to the
types  of  business  activities  in  which it may engage, provided that the Bank
continued  to  be  a  qualified thrift lender.  See "Federal Savings Institution
Regulation  -  QTL  Test."  The  Gramm-Leach-Bliley Act of 1999 provides that no
company may acquire control of a savings association after May 4, 1999 unless it
engages  only  in  the  financial  activities  permitted  for  financial holding
companies  under  the  law or for multiple savings and loan holding companies as
described  below.  Further,  the  Gramm-Leach-Bliley Act specifies that existing
savings  and  loan  holding  companies  may only engage in such activities.  The
Gramm-Leach-Bliley  Act,  however,  grandfathered the unrestricted authority for
activities  with  respect to unitary savings and loan holding companies existing
prior to May 4, 1999, so long as the Bank continues to comply with the QTL Test.
The Company does not qualify for the grandfather inasmuch as it acquired control
of  B  &  L  Bank  after  the  applicable  date.

     A  savings  and  loan  holding  company  is  prohibited  from,  directly or
indirectly,  acquiring  more  than  5%  of  the  voting stock of another savings
institution  or savings and loan holding company, without prior written approval
of  the  OTS and from acquiring or retaining control of a depository institution
that  is  not  insured  by  the  FDIC.  In  evaluating  applications  by holding
companies  to  acquire savings institutions, the OTS considers the financial and
managerial  resources  and  future  prospects  of  the  company  and institution
involved,  the  effect  of  the acquisition on the risk to the deposit insurance
funds,  the  convenience  and  needs  of  the community and competitive factors.

     The  OTS  may  not  approve any acquisition that would result in a multiple
savings  and  loan holding company controlling savings institutions in more than
one state, subject to two exceptions: (i) the approval of interstate supervisory
acquisitions by savings and loan holding companies and (ii) the acquisition of a
savings  institution  in  another  state  if the laws of the state of the target
savings  institution  specifically permit such acquisitions.  The states vary in
the  extent  to  which  they  permit interstate savings and loan holding company
acquisitions.

     Although  savings  and  loan  holding companies are not subject to specific
capital  requirements  or  specific  restrictions on the payment of dividends or
other  capital distributions, federal regulations do prescribe such restrictions
on  subsidiary  savings institutions as described below.  B & L Bank must notify
the  OTS 30 days before declaring any dividend to the Company.  In addition, the
financial  impact of a holding company on its subsidiary institution is a matter


                                      -21-
<PAGE>
that  is evaluated by the OTS and the agency has authority to order cessation of
activities  or divestiture of subsidiaries deemed to pose a threat to the safety
and  soundness  of  the  institution.

     ACQUISITION  OF  THE COMPANY.  Under the Federal Change in Bank Control Act
("CIBCA"),  a  notice  must  be  submitted to the OTS if any person (including a
company),  or  group  acting  in  concert,  seeks  to acquire 10% or more of the
Company's  outstanding  voting  stock,  unless  the  OTS  has  found  that  the
acquisition  will  not  result in a change of control of the Company.  Under the
CIBCA,  the  OTS has 60 days from the filing of a complete notice to act, taking
into  consideration  certain  factors,  including  the  financial and managerial
resources  of  the  acquirer and the anti-trust effects of the acquisition.  Any
company  that  so  acquires  control  would  then  be subject to regulation as a
savings  and  loan  holding  company.

FEDERAL  SAVINGS  INSTITUTION  REGULATION

     BUSINESS  ACTIVITIES.  The  activities  of federal savings institutions are
governed  by  federal law and regulations.  These laws and regulations delineate
the  nature  and  extent of the activities in which federal savings associations
may  engage.  In  particular,  many  types  of  lending  authority  for  federal
associations, e.g., commercial, non-residential real property loans and consumer
loans,  are  limited  to  a specified percentage of the institution's capital or
assets.  In  addition, certain activities, such as mergers and acquisitions, and
branching  are  subject  to  the  prior  approval  of  the  OTS.

     CAPITAL  REQUIREMENTS.  The  OTS  capital  regulations  require  savings
institutions  to  meet  three minimum capital standards: a 1.5% tangible capital
ratio,  a  4%  leverage  ratio (3% for institutions with the highest examination
rating)  and an 8% risk-based capital ratio.  In addition, the prompt corrective
action  standards  discussed  below  also  establish,  in  effect,  a minimum 2%
tangible  capital  standard,  a 4% leverage ratio (3% for institutions receiving
the  highest  examination  rating),  and  together  with  the risk-based capital
standard  itself,  a 4% Tier I risk-based capital standard.  The OTS regulations
also  require  that,  in  meeting  the tangible, leverage and risk-based capital
standards,  institutions  must  generally  deduct  investments  in  and loans to
subsidiaries  engaged  in activities as principal that are not permissible for a
national  bank.

     The  risk-based  capital  standard  for  savings  institutions requires the
maintenance of Tier I (core) and total capital (which is defined as core capital
and  supplementary  capital)  to  risk-weighted  assets  of  at least 4% and 8%,
respectively.  In  determining  the  amount of risk-weighted assets, all assets,
including  certain  off-balance  sheet  assets,  are multiplied by a risk-weight
factor  of 0% to 100%, assigned by the OTS capital regulation based on the risks
believed  inherent  in  the  type of asset.  Core (Tier I) capital is defined as
common stockholders' equity (including retained earnings), certain noncumulative
perpetual  preferred stock and related surplus, and minority interests in equity
accounts  of  consolidated  subsidiaries  less  intangibles  other  than certain
mortgage  servicing  rights  and  credit  card relationships.  The components of
supplementary  capital  currently  include cumulative preferred stock, long-term
perpetual  preferred  stock, mandatory convertible securities, subordinated debt
and  intermediate  preferred  stock,  the  allowance  for  loan and lease losses
limited  to  a  maximum  of  1.25%  of  risk-weighted  assets  and  up to 45% of
unrealized  gains  on  available-for-sale  equity  securities  with  readily
determinable  fair values. Overall, the amount of supplementary capital included
as  part  of  total  capital  cannot  exceed  100%  of  core  capital.

     The  capital  regulations also incorporate an interest rate risk component.
Savings institutions with "above normal" interest rate risk exposure are subject
to  a  deduction from total capital for purposes of calculating their risk-based
capital requirements.  For the present time, the OTS has deferred implementation
of the interest rate risk component.  At September 30, 2001, B & L Bank met each
of  its  capital  requirements.


                                      -22-
<PAGE>
<TABLE>
<CAPTION>
     The following table presents B & L Bank's capital position at September 30,
2001.

                                                                 CAPITAL
                                                EXCESS      -------------------
                         ACTUAL   REQUIRED   (DEFICIENCY)    ACTUAL   REQUIRED
                        CAPITAL    CAPITAL      AMOUNT      PERCENT    PERCENT
                        --------  ---------  -------------  --------  ---------
<S>                     <C>       <C>        <C>            <C>       <C>
                                          (DOLLARS IN THOUSANDS)

Tangible                $ 12,413  $   1,885  $      10,528     9.87%       1.5%

Core (Leverage)         $ 12,413  $   2,785  $       9,628    17.83        4.0

Risk-based              $ 12,997  $   5,570  $       7,427    18.67        8.0
</TABLE>

     PROMPT  CORRECTIVE  REGULATORY ACTION.  The OTS is required to take certain
supervisory actions against undercapitalized institutions, the severity of which
depends  upon  the  institution's  degree  of undercapitalization.  Generally, a
savings institution that has a ratio of total capital to risk weighted assets of
less  than  8%, a ratio of Tier I (core) capital to risk-weighted assets of less
than  4%  or a ratio of core capital to total assets of less than 4% (3% or less
for  institutions  with  the  highest  examination  rating)  is considered to be
"undercapitalized."  A  savings  institution that has a total risk-based capital
ratio  less  than 6%, a Tier I capital ratio of less than 3% or a leverage ratio
that  is less than 3% is considered to be "significantly undercapitalized" and a
savings institution that has a tangible capital to assets ratio equal to or less
than  2%  is  deemed  to  be "critically undercapitalized."  Subject to a narrow
exception,  the  OTS  is  required  to  appoint a receiver or conservator for an
institution that is "critically undercapitalized."  The regulation also provides
that a capital restoration plan must be filed with the OTS within 45 days of the
date  a  savings  institution  receives  notice  that  it is "undercapitalized,"
"significantly  undercapitalized"  or "critically undercapitalized."  Compliance
with  the  plan must be guaranteed by any parent holding company in an amount of
up  to  the  lesser  of 5% of the institution's assets or the amount which would
bring  the institution into compliance with all capital standards.  In addition,
numerous  mandatory  supervisory  actions  become  immediately  applicable to an
undercapitalized  institution,  including,  but  not  limited  to,  increased
monitoring  by  regulators and restrictions on growth, capital distributions and
expansion.  The  OTS  could  also  take  any  one  of  a number of discretionary
supervisory  actions,  including  the  issuance  of  a capital directive and the
replacement  of  senior  executive  officers  and  directors.

     INSURANCE  OF  DEPOSIT  ACCOUNTS.  Deposits of the B & L Bank are presently
insured by the SAIF.  The FDIC maintains a risk-based assessment system by which
institutions  are  assigned  to  one  of  three  categories  based  on  their
capitalization  and  one of three subcategories based on examination ratings and
other  supervisory  information.  An  institution's assessment rate depends upon
the  categories  to  which  it  is  assigned.  Assessment  rates for SAIF member
institutions  are  determined  semiannually by the FDIC and currently range from
zero  basis  points  for  the healthiest institutions to 27 basis points for the
riskiest.

     The  Federal  Deposit  Insurance  Association  has  authority  to  increase
insurance  assessments.  A significant increase in Savings Association Insurance
Fund  premiums would likely have an adverse effect on the operating expenses and
results  of  operations of B & L Bank.  Management cannot predict what insurance
assessments  rates  will  be  in  the  future.

     In  addition  to  the  assessment  for  deposit insurance, institutions are
required  to  make payments toward interest payments on bonds issued in the late
1980s  by  the Financing Company ("FICO") to recapitalize the predecessor to the
SAIF.  By  law,  there  has been equal sharing of FICO payments between SAIF and
Bank  Insurance  Fund  members since January 1, 2000.  The FDIC has authority to
increase  insurance  assessments.  A  significant  increase  in  SAIF  insurance
premiums  would  likely  have  an  adverse  effect on the operating expenses and
results  of  operations  of  the  B  &  L  Bank.  Management cannot predict what
insurance  assessment  rates  will  be  in  the  future.


                                      -23-
<PAGE>
     Insurance of deposits may be terminated by the FDIC upon a finding that the
institution  has  engaged  in  unsafe  or  unsound practices, is in an unsafe or
unsound  condition  to  continue  operations or has violated any applicable law,
regulation,  rule,  order  or  condition  imposed  by  the FDIC or the OTS.  The
management  of  B & L Bank does not know of any practice, condition or violation
that  might  lead  to  termination  of  deposit  insurance.

     LOANS  TO ONE BORROWER.  Federal law provides that savings institutions are
generally  subject to the limits on loans to one borrower applicable to national
banks.  A  savings  institution may not make a loan or extend credit to a single
or  related  group  of  borrowers in excess of 15% of its unimpaired capital and
surplus.  An  additional  amount may be lent, equal to 10% of unimpaired capital
and  surplus,  if  secured  by  specified  readily-marketable  collateral.  At
September  30,  2001,  the  B & L Bank's limit on loans to one borrower was $2.0
million,  and the B & L Bank's largest aggregate outstanding balance of loans to
one  borrower  was  $1.8  million.

     QTL  TEST.  Federal  law  requires savings institutions to meet a qualified
thrift  lender test.  Under the test, a savings B & L Bank is required to either
qualify as a "domestic building and loan association" under the Internal Revenue
Code  of  1986,  as  amended  (the  "Code"),  or  maintain  at  least 65% of its
"portfolio  assets" (total assets less: (i) specified liquid assets up to 20% of
total  assets;  (ii)  intangibles,  including  goodwill;  and (iii) the value of
property  used  to  conduct  business) in certain "qualified thrift investments"
(primarily  residential  mortgages  and  related  investments, including certain
mortgage-backed securities) in at least nine months out of each 12-month period.

     A  savings  institution  that  fails  the  qualified  thrift lender test is
subject  to  certain  operating restrictions and may be required to convert to a
bank charter.  As of September 30, 2001, the B & L Bank met the qualified thrift
lender  test.  Recent  legislation  has  expanded  the extent to which education
loans,  credit  card loans and small business loans may be considered "qualified
thrift  investments."

     LIMITATION  ON  CAPITAL  DISTRIBUTIONS.  OTS regulations impose limitations
upon  all  capital  distributions  by  a  savings  institution,  including  cash
dividends,  payments  to  repurchase  its shares and payments to shareholders of
another institution in a cash-out merger.  Under OTS regulations, an application
to  and  the  prior  approval  of  the OTS will be required prior to any capital
distribution  if  the  institution  does  not  meet  the criteria for "expedited
treatment"  of  applications  under OTS regulations (i.e., generally, safety and
soundness,  compliance and Community Reinvestment Act examination ratings in the
two  top  categories),  the  total  capital  distributions for the calendar year
exceed  net  income for that year plus the amount of retained net income for the
preceding  two  years,  the  institution would be undercapitalized following the
distribution  or  the  distribution  would  otherwise  be contrary to a statute,
regulation  or  agreement  with  OTS.  If  an  application  is not required, the
institution  must still provide prior notice to OTS of the capital distribution.
In  the event the B & L Bank's capital fell below its regulatory requirements or
the OTS notified it that it was in need of more than normal supervision, the B &
L  Bank's  ability  to  make  capital  distributions  could  be  restricted.  In
addition,  the  OTS  could  prohibit  a  proposed  capital  distribution  by any
institution,  which  would  otherwise be permitted by the regulation, if the OTS
determines  that  such  distribution  would  constitute  an  unsafe  or  unsound
practice.

     ASSESSMENTS.  Savings  institutions  are required to pay assessments to the
OTS  to  fund  the  agency's  operations.  The  general  assessments,  paid on a
semi-annual  basis,  are  computed  upon the savings institution's total assets,
including  consolidated  subsidiaries,  as  reported  in the B & L Bank's latest
quarterly  thrift  financial  report.

     TRANSACTIONS WITH RELATED PARTIES.  The B & L Bank's authority to engage in
transactions  with  "affiliates"  (e.g.,  any  company that controls or is under
common  control  with  an institution, including the Company and its non-savings
institution  subsidiaries)  is  limited by federal law.  The aggregate amount of
covered  transactions  with  any  individual  affiliate is limited to 10% of the
capital and surplus of the savings institution.  The aggregate amount of covered
transactions  with all affiliates is limited to 20% of the savings institution's
capital  and  surplus.  Certain  transactions with affiliates are required to be
secured  by collateral in an amount and of a type described in federal law.  The
purchase  of  low  quality  assets from affiliates is generally prohibited.  The
transactions  with affiliates must be on terms and under circumstances, that are
at  least  as  favorable  to the institution as those prevailing at the time for
comparable  transactions  with  non-affiliated  companies.  In addition, savings
institutions  are  prohibited  from  lending to any affiliate that is engaged in
activities  that  are  not permissible for bank holding companies and no savings
institution  may  purchase  the  securities  of  any  affiliate  other  than  a
subsidiary.


                                      -24-
<PAGE>
     The  B  &  L  Bank's  authority  to  extend  credit  to executive officers,
directors  and  10%  shareholders ("insiders"), as well as entities such persons
control, is also governed by federal law.  Such loans are required to be made on
terms  substantially  the  same as those offered to unaffiliated individuals and
not  involve  more  than  the normal risk of repayment.  An exception exists for
loans  made  pursuant  to  a  benefit  or  compensation  program  that is widely
available  to  all  employees of the institution and does not give preference to
insiders over other employees.  The law limits both the individual and aggregate
amount  of  loans  the  B & L Bank may make to insiders based, in part, on B & L
Bank's  capital  position  and  requires certain board approval procedures to be
followed.  Special  limitations apply to loans made to executive officers of the
institution.

     ENFORCEMENT.  The  OTS  has primary enforcement responsibility over savings
institutions  and has the authority to bring actions against the institution and
all  institution-affiliated  parties, including stockholders, and any attorneys,
appraisers  and  accountants who knowingly or recklessly participate in wrongful
action  likely  to  have  an  adverse  effect on an insured institution.  Formal
enforcement  action  may range from the issuance of a capital directive or cease
and  desist  order  to  removal  of  officers and/or directors to institution of
receivership,  conservatorship  or  termination  of  deposit  insurance.  Civil
penalties cover a wide range of violations and can amount to $25,000 per day, or
even  $1  million  per  day  in  especially  egregious  cases.  The FDIC has the
authority  to recommend to the Director of the OTS that enforcement action to be
taken  with respect to a particular savings institution.  If action is not taken
by  the  Director,  the  FDIC  has  authority  to take such action under certain
circumstances.  Federal  law  also  establishes  criminal  penalties for certain
violations.

     STANDARDS  FOR  SAFETY  AND  SOUNDNESS.  The  federal banking agencies have
adopted  Interagency  Guidelines prescribing Standards for Safety and Soundness.
The  guidelines  set  forth  the safety and soundness standards that the federal
banking  agencies  use  to  identify  and address problems at insured depository
institutions  before  capital  becomes  impaired.  If  the OTS determines that a
savings institution fails to meet any standard prescribed by the guidelines, the
OTS  may  require  the  institution  to  submit  an  acceptable  plan to achieve
compliance  with  the  standard.

FEDERAL  HOME  LOAN  BANK  SYSTEM

     The  B  &  L  Bank  is  a  member  of the FHLB System, which consists of 12
regional  FHLBs.  The  FHLB  provides  a  central  credit facility primarily for
member  institutions.  The  B  &  L Bank, as a member of the FHLB-Des Moines, is
required  to  acquire and hold shares of capital stock in the FHLB-Des Moines in
an amount at least equal to 1.0% of the aggregate principal amount of its unpaid
residential  mortgage  loans  and  similar  obligations at the beginning of each
year,  or  1/20 of its advances (borrowings) from the FHLB-Des Moines, whichever
is  greater.  FHLB advances must be secured by specified types of collateral and
all  long-term  advances may only be obtained for the purpose of providing funds
for  residential  housing  finance.

     The  FHLBs  are  required  to provide funds for the resolution of insolvent
thrifts  and  to  contribute  funds  for  affordable  housing  programs.  These
requirements  could  reduce  the amount of dividends that the FHLBs pay to their
members and could also result in the FHLBs imposing a higher rate of interest on
advances  to  their  members.

FEDERAL  RESERVE  SYSTEM

     The  Federal  Reserve  Board  regulations  require  savings institutions to
maintain  non-interest  earning  reserves  against  their  transaction  accounts
(primarily  NOW  and  regular  checking  accounts).  The  regulations  currently
provide  that  reserves  be maintained against aggregate transaction accounts as
follows:  for  accounts aggregating $41.3 million or less (subject to adjustment
by  the  Federal  Reserve Board) the reserve requirement is 3%; and for accounts
aggregating  greater  than  $41.3  million,  the  reserve  requirement is $1.239
million  plus 10% (subject to adjustment by the Federal Reserve Board between 8%
and  14%)  against that portion of total transaction accounts in excess of $41.3
million.  The  first  $5.7  million of otherwise reservable balances (subject to
adjustments  by  the  Federal  Reserve  Board)  are  exempted  from  the reserve
requirements.  The  B  &  L  Bank  complies  with  the  foregoing  requirements.


                                      -25-
<PAGE>
                                    TAXATION

FEDERAL  TAXATION

     GENERAL.  The  Company  reports its income on a fiscal year basis using the
accrual  method  of accounting and will be subject to federal income taxation in
the  same  manner  as  other  corporations  with  some  exceptions,  including
particularly  the  Banks'  reserve for bad debts discussed below.  The following
discussion  of tax matters is intended only as a summary and does not purport to
be  a  comprehensive description of the tax rules applicable to the Banks or the
Company.  For additional information regarding income taxes, see Note I of Notes
to  Consolidated  Financial  Statements.

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

     The  thrift bad debt rules were revised by Congress in 1996.  The new rules
eliminated  the  percentage  of taxable income method for deducting additions to
the tax bad debt reserves for all thrifts for tax years beginning after December
31,  1995.  These  rules  also required that all institutions recapture all or a
portion  of their bad debt reserves added since the base year (last taxable year
beginning  before  January 1, 1988).  For taxable years beginning after December
31, 1995, B&L Bank's  bad debt deduction must be determined under the experience
method  using  a  formula  based  on actual bad debt experience over a period of
years  or,  if  the Bank is a "large" Bank (assets in excess of $500 million) on
the  basis of net charge-offs during the taxable year.  The new rules allowed an
institution  to  suspend  bad  debt  reserve recapture for the 1996 and 1997 tax
years  if  the  institution's  lending  activity  for those years is equal to or
greater  than  the  institutions  average  mortgage lending activity for the six
taxable  years  preceding  1996  adjusted for inflation.  For this purpose, only
home  purchase  or  home  improvement loans are included and the institution can
elect to have the tax years with the highest and lowest lending activity removed
from  the  average  calculation.  If an institution is permitted to postpone the
reserve  recapture,  it must begin its six year recapture no later than the 1998
tax  year.  The unrecaptured base year reserves will not be subject to recapture
as  long  as  the institution continues to carry on the business of banking.  In
addition,  the balance of the pre-1988 bad debt reserves continues to be subject
to  provisions  of  present  law referred to below that require recapture of the
pre-1988  bad  debt  reserve  in  the  case  of  certain excess distributions to
shareholders.

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

     CORPORATE  ALTERNATIVE  MINIMUM TAX.  The Code imposes a tax on alternative
minimum taxable income ("AMTI") at a rate of 20%. Only 90% of AMTI can be offset
by  net  operating loss carryovers.  AMTI is increased by an amount equal to 75%
of  the amount by which the Company's adjusted current earnings exceeds its AMTI


                                      -26-
<PAGE>
(determined  without  regard  to  this preference and prior to reduction for net
operating  losses).  For  taxable  years  beginning after December 31, 1986, and
before  January  1,  1996,  an  environmental tax of 0.12% of the excess of AMTI
(with  certain  modification)  over  $2.0  million  is  imposed on corporations,
including  the  Company,  whether  or  not  an  Alternative Minimum Tax is paid.

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

     AUDITS.  There  have  not  been  any Internal Revenue Service audits of the
Company's  Federal  income  tax  returns  during  the  past  five  years.

STATE  TAXATION

     MISSOURI  TAXATION.  Missouri-based  financial  institutions,  such  as B&L
Bank,  are  subject to a special financial institutions tax, based on net income
without  regard  to  net  operating loss carryforwards, at the rate of 7% of net
income.  This  tax  is  in  lieu  of  certain  other  state  taxes  on financial
institutions,  on  their  property,  capital or income, except taxes on tangible
personal  property  owned by B&L Bank and held for lease or rental to others and
on real estate, contributions paid pursuant to the Unemployment Compensation Law
of Missouri, social security taxes, sales taxes and use taxes.  In addition, B&L
Bank  is  entitled  to  credit  against  this tax all taxes paid to the State of
Missouri  or  any  political  subdivision,  except  taxes  on  tangible personal
property  owned  and  held  for  lease  or  rental to others and on real estate,
contributions  paid  pursuant  to the Unemployment Compensation Law of Missouri,
social  security  taxes,  sales and use taxes, and taxes imposed by the Missouri
Financial  Institutions  Tax  Law.  Missouri  also  has  a corporate income tax.
However,  the  Company has not been subject to the Missouri corporate income tax
because  of income generated on its portfolio of Federal agency securities which
are  exempt  from  corporate  income  tax.

     There  have  not  been  any  audits of B & L Bank's Missouri tax returns by
Missouri  tax  authorities  during  the  past  five  years.

     As  a  Missouri-chartered  corporation,  the  Company  is subject to annual
franchise  and  income  taxes imposed by the State of Missouri.  Franchise taxes
are  assessed at a rate of 1/20 of 1% of the par value of outstanding shares and
surplus.  Income taxes are assessed at a rate of 6.25% of federal taxable income
derived  from  Missouri  sources.

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

COMPETITION

     Due to the proximity of Lexington to the Kansas City metropolitan area, the
Company  operates  in  an  extremely  competitive  market  for the attraction of
savings  deposits  (its primary source of lendable funds) and in the origination
of  loans.  Historically,  its  most direct competition for savings deposits has
come from commercial banks and thrift institutions operating in its market area.
Some  of  these  commercial  banks  are  subsidiaries  of large regional holding
companies  having  vastly greater resources at their disposal.  At September 30,
2001,  there  were  10  commercial  banks,  and  no other thrift institutions in
Lafayette  County.  Particularly  in  times  of  high market interest rates, the
Company  has faced competition for investors' funds from short-term money market
securities  and  corporate and U.S. Government securities.  The Company competes
for  loan originations with mortgage bankers, thrift institutions, credit unions
and  commercial  banks.  Such  competition  for deposits and loans may limit the
Company's  future  growth  and  earnings  prospects.


                                      -27-
<PAGE>
PERSONNEL

     As  of  September  30,  2001, the Company had 26 full-time and 10 part-time
employees.  The  employees  are not represented by a collective bargaining unit.
The  Company  believes  its  relationship  with  its  employees  is  good.


                                      -28-
<PAGE>
EXECUTIVE  OFFICERS

     The  following table sets forth certain information regarding the executive
officers  of  the  Company  as  of  September  30,  2001:

Name                         Age(1)    Position
----                         ------    --------
Erwin  Oetting,  Jr.           61      President  and  Chief  Executive  Officer

E.  Steva  Vialle              50      Executive Vice President, Chief Operating
Officer,  and  Secretary

William J. Huhmann             62      Senior Vice President and Chief
Financial  Officer

Mark  D.  Summerlin            41      Senior  Vice  President

Terry  L.  Thompson            48      Vice  President

     The  following table sets forth certain information regarding the executive
officers  of  B&L  Bank.

Name                         Age(1)   Position
----                         ------   --------
B&L  Bank:

Erwin  Oetting,  Jr.          61       President  and  Chief  Executive Officer

E.  Steva  Vialle             50       Executive Vice President, Chief Operating
Officer  and  Secretary

Kathryn  M.  Swafford         39       Senior  Vice  President  and  Treasurer

Mark  D.  Summerlin           41       Senior  Vice  President

William  J.  Huhmann          62       Senior  Vice  President

Terry  L.  Thompson           48       Senior  Vice  President

Carol  Summerlin              61       Vice  President

(1)  As  of  September  30,  2001.

     Erwin  Oetting,  Jr.  has been employed as an officer of the B&L Bank since
1960  and  has  been  President and Chief Executive Officer since 1985.  He is a
member  of  the  LIDC  Authority,  the  Lexington  Advisory Board, the Lexington
Chamber of Commerce, Director National Military Education Center and Museum, and
a  trustee  of  Wentworth  Military  Academy.

     E.  Steva  Vialle has been employed by the B&L Bank since 1984 and has been
Executive  Vice President, Chief Operating Officer and Secretary since 1994.  He
is  a  member of the Lexington Industrial Development Corporation, the Lexington
Loins  Club,  Lexington  Booster  Club  and  Machpelah  Cemetery  Board.

            William  J.  Huhmann  has  served as Senior Vice President and Chief
Financial  Officer  of  the  Company  since September 1997 and of B&L Bank since
April  2001.  Mr.  Huhmann  served  as  Chairman  and Chief Financial Officer of
Lafayette  County  Bank  from  1991  until  April  2001.  He  is a member of the
American  Institute  of  CPAs  and  the  Missouri  Society  of  CPAs.


                                      -29-
<PAGE>
     Mark D. Summerlin has been employed by the B&L Bank since 1985 and has been
Senior  Vice President since April 2001.  He is a member of the Rotary Club, the
Lexington  Park  Board, the Chamber of Commerce, the Knights of Columbus and the
Wentworth  Country  Club  Board.

     Terry  L.  Thompson  has  served as Senior Vice President of B&L Bank since
April  2001.  Mr.  Thompson  served  as President and Chief Executive Officer of
Lafayette  County  Bank  from  1990 until April 2001. He is member of the Rotary
Club,  Lexington  R-V  School  Board  and  serves  on  several committees of the
Missouri  Bankers  Association.

     Carol  Summerlin has served as Vice President of B&L Bank since April 2001.
Mrs.  Summerlin  served as Senior Vice President and Cashier of Lafayette County
Bank  from 1979 until 2001. She is a member of the Lexington Chamber of Commerce
and  other  local  civic  organizations.

     Kathryn  M.  Swafford has been employed by B&L Bank since 1984 and has been
Senior  Vice  President  since April 2001. She is a member of the Lexington Park
Board.


ITEM  2.  DESCRIPTION  OF  PROPERTY
-----------------------------------

     B&L  Bank  owns  its main office located at 205 S. 13th  Street, Lexington,
Missouri.  The  office was opened in 2001. The new facility was constructed at a
total  cost,  including  land,  of  approximately  $2.9  million  and  contains
approximately  7,500  square  feet.  In  addition  B&L Bank has two other branch
offices  located  in  Wellington  and  Callao,  Missouri.  The  branch office in
Wellington  was constructed around 1920 and has been remodeled several times and
contains  approximately  2,000  square feet.   The Callao office was constructed
around  1930  and  has approximately 2,000 square feet.  All banking offices are
owned  and  have  vaults  and  contain  rental  safe deposit boxes. The previous
banking  offices  of  Lafayette County Bank in Lexington, Missouri will be sold.
At  September  30,  2001,  the  net  book  value  of  the Company's premises and
equipment  (land,  building  and improvements, furniture and equipment) was $3.9
million.

ITEM  3.  LEGAL  PROCEEDINGS
----------------------------

     Periodically,  there  have  been  various claims and lawsuits involving the
Company, such as claims to enforce liens, condemnation proceedings on properties
on  which  the Company holds security interests, claims involving the making and
servicing  of  real  property  loans  and other issues incident to the Company's
business.  The  Company  is not a party to any pending legal proceedings that it
believes  would  have  a  material  adverse effect on the financial condition or
operations  of  the  Company.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
---------------------------------------------------------------------

     No  matters  were submitted to a vote of security holders during the fourth
quarter  of  the  fiscal  year  ended  September  30,  2001.


                                    PART II

ITEM  5.   MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS
--------------------------------------------------------------------------

     The  information  contained  under  the  section  captioned  "Common  Stock
Information" on page 2 of the Annual Report to Stockholders ("Annual Report") is
incorporated  herein  by  reference.

ITEM  6.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND
--------------------------------------------------------------------------------
           RESULTS  OF  OPERATIONS  OR  PLAN  OF  OPERATIONS
           -------------------------------------------------

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


                                      -30-
<PAGE>
ITEM  7.   FINANCIAL  STATEMENTS
--------------------------------

     (a)  Financial  Statements
          Independent  Auditor's  Report*
          Consolidated  Statements  of  Financial  Condition as of September 30,
            2001  and  2000*
          Consolidated  Statements  of  Stockholders' Equity for the Years Ended
            September  30,  2001,  2000  and  1999*
          Consolidated  Statements  of  Income for the Years Ended September 30,
            2001,  2000  and  1999*
          Consolidated  Statements  of  Cash Flows for the Years Ended September
            30,  2001,  2000  and  1999*
          Notes  to  the  Consolidated  Financial  Statements*

     *  Included  in  the  Annual  Report  attached  as  Exhibit  13  hereto and
     incorporated  herein  by  reference. All schedules have been omitted as the
     required information is either inapplicable or included in the Consolidated
     Financial  Statements  or  related  Notes  contained  in the Annual Report.

ITEM  8.   CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
--------------------------------------------------------------------------------
           FINANCIAL  DISCLOSURE
           ---------------------

     Not  applicable.

                                    PART III

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
--------------------------------------------------------------------------------
             COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT
             --------------------------------------------------------

     The  information  contained  under  the  section  captioned  "Proposal  1--
Election  of  Directors" contained in the Company's Proxy Statement, and "Part I
--  Business -- Personnel -- Executive Officers" of this report, is incorporated
herein  by  reference.  Reference  is  made to the cover page of this report for
information  regarding  compliance  with  Section  16(a)  of  the  Exchange Act.

ITEM  10.  EXECUTIVE  COMPENSATION
----------------------------------

     The  information  contained  under  the  sections  captioned  "Executive
Compensation,"  "Directors'  Compensation"  under  "Proposal  1  --  Election of
Directors"  in  the  Proxy  Statement  is  incorporated  herein  by  reference.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT
--------------------------------------------------------------------------------

     (a)  Security  Ownership  of  Certain  Beneficial  Owners

          Information  required by this item is incorporated herein by reference
          to  the  section  captioned  "Stock Ownership" of the Proxy Statement.


                                      -31-
<PAGE>
     (b)  Security  Ownership  of  Management

          The  information  required  by  this  item  is  incorporated herein by
          reference  to  the  sections  captioned  "Proposal  1  --  Election of
          Directors"  and  "Stock  Ownership"  of  the  Proxy  Statement.

     (c)  Changes  in  Control

          The  Company is not aware of any arrangements, including any pledge by
          any person of securities of the Company, the operation of which may at
          a  subsequent  date  result  in  a  change  in control of the Company.

     The  information  required by this item is incorporated herein by reference
to  the  sections  captioned  "Proposal  1  -- Election of Directors" and "Stock
Ownership"  of  the  Proxy  Statement.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
-------------------------------------------------------------

     The  information  set  forth under the section captioned "Transactions with
Management"  in  the  Proxy  Statement  is  incorporated  herein  by  reference.

                                    PART IV

ITEM  13.  EXHIBITS  LIST  AND  REPORTS  ON  FORM  8-K
------------------------------------------------------

     (a)     Exhibits

     3(a)     Articles  of  Incorporation  of  the  Registrant*
     3(b)     Amended  and  Restated  Bylaws  of  the  Registrant****
     10(a)    Employment  Agreement  with  Erwin  Oetting,  Jr.**
     10(b)    Employment  Agreement  with  E.  Steva  Vialle**
     10(c)    Salary  Continuation  Agreement  with  Erwin  Oetting,  Jr.**
     10(d)    Salary  Continuation  Agreement  with  E.  Steva  Vialle**
     10(e)    Severance  Agreement  with  Mark  D.  Summerlin**
     10(f)    Severance  Agreement  with  Kathryn  M.  Swafford**
     10(g)    1996  Stock  Option  Plan***
     10(h)    Management  Recognition  and  Development  Plan***
     (13)     Annual  Report  to  Stockholders
     (21)     Subsidiaries  of  the  Registrant
     (23)     Consent  of  Independent  Auditor
___________________
*     Incorporated  by  reference  to the Registrant's Registration Statement on
      Form  S-1,  filed  on  February  16,  1996.
**    Incorporated  by reference to the Registrant's Annual Report on Form 10-K
      for  the  year  ended  September  30,  1996.
***   Incorporated by reference to the Registrant's Definitive Proxy Statement
      for  the  1997  Annual  Meeting  of  Stockholders.
****  Incorporated  by  Reference  to the Registrant's Current Report on Form
      8-K  filed  on  November  12,  1999.

     (b)  Reports  on  Form  8-K

          No  Reports  on Form 8-K were filed during the quarter ended September
          30,  2001.


                                      -32-
<PAGE>
                                   SIGNATURES

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

                                       LEXINGTON B & L FINANCIAL CORP.



Date:  December  21,  2001             By: /s/  Erwin  Oetting,  Jr.
                                           ---------------------------
                                           Erwin  Oetting,  Jr.
                                           President and Chief Executive Officer

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

SIGNATURES                               TITLE                       DATE
------------------------  -----------------------------------  -----------------

/s/ Erwin Oetting, Jr.    President, Chief Executive Officer   December 21, 2001
------------------------  and Director (Principal Executive
Erwin Oetting, Jr.
Officer)


/s/ E. Steva Vialle       Executive Vice President, Chief      December 21, 2001
------------------------  Operating Officer, Secretary
E. Steva Vialle           and Director



/s/ William J. Huhmann    Senior Vice President and Chief      December 21, 2001
------------------------  Financial Officer (Principal
William J. Huhmann        Financial and Accounting Officer)
                          and Director


/s/ Steve Oliaro          Director                             December 21, 2001
------------------------
Steve Oliaro


/s/ Norman Vialle         Director                             December 21, 2001
------------------------
Norman Vialle


/s/ Charles R. Wilcoxon   Director                             December 21, 2001
------------------------
Charles R. Wilcoxon


<PAGE>