<PAGE> 1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-K

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

      For the fiscal year ended December 31, 1996 or

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

      For the transition period from                   to

      Commission file number 0-17403.

                        ROOSEVELT FINANCIAL GROUP, INC.
             (Exact Name of Registrant as Specified in its Charter)

                     DELAWARE                           43-1498200
          (State or other jurisdiction of            (I.R.S. Employer
          incorporation or organization)            Identification No.)

  900 ROOSEVELT PARKWAY, CHESTERFIELD, MISSOURI            63017
    (Address of principal executive offices)            (Zip Code)

      (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE): (314) 532-6200

          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
        6 1/2% NON-CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A AND
                       SERIES F, PAR VALUE $.01 PER SHARE
                               (Title of Classes)

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

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

   As of February 28, 1997, there were issued and outstanding 42,644,404 shares
of the Registrant's Common Stock. The aggregate market value of the voting
stock held by nonaffiliates of the Registrant, computed by reference to the
closing price of such stock as of February 28, 1997, was $980,821,292. (The
exclusion from such amount of the market value of the shares owned by any
person shall not be deemed an admission by the Registrant that such person
is an affiliate of the Registrant.)

                      DOCUMENTS INCORPORATED BY REFERENCE

   PART III of Form 10-K--Portions of Proxy Statement for the 1997 Annual
Meeting of Stockholders.



<PAGE> 2

<TABLE>
                        ROOSEVELT FINANCIAL GROUP, INC.
                         1996 ANNUAL REPORT ON FORM 10K
                               TABLE OF CONTENTS


<CAPTION>
                                                                          Page
                                                                          ----

<S>                                                                       <C>
PART I                                                                      1
   Item 1. BUSINESS                                                         1
           General                                                          1
           Forward Looking Statements                                       2
           Acquisitions                                                     3
           Lending Activities                                               3
           Investment and Mortgage-Backed Securities                        7
           Classified Assets, Loan Delinquencies and Defaults               11
           Provisions for Losses on Loans and Real Estate Owned             11
           Deposits and Other Sources of Funds                              14
           Asset/ Liability Management                                      15
           Subsidiaries                                                     15
           Regulation                                                       16
           Competition                                                      23
           Management of Registrant and Its Subsidiaries                    24
           Employees                                                        24
   Item 2. PROPERTIES                                                       25
   Item 3. LEGAL PROCEEDINGS                                                25
   Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS              25
PART II                                                                     26
   Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
            HOLDER MATTERS                                                  26
           Common Stock                                                     26
           Payment of Dividends                                             26
   Item 6. SELECTED FINANCIAL DATA                                          27
   Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS                                           29
           General                                                          29
           Results of Operations                                            29
           Financial Condition                                              39
           Asset Quality                                                    41
           Asset/Liability Management                                       42
           Liquidity and Capital Resources                                  45
           Impact of Inflation and Changing Prices                          46
           Accounting and Regulatory Developments                           46
           Selected Quarterly Financial Data                                47
   Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                      49
   Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE                                            86
PART III                                                                    86
   Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT              86
   Item 11. EXECUTIVE COMPENSATION                                          86
   Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
             MANAGEMENT                                                     86
   Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                  86
PART IV                                                                     86
   Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
             FORM 8-K                                                       86
           SIGNATURES                                                       90
</TABLE>



<PAGE> 3

                                   PART I
ITEM 1. BUSINESS

GENERAL

Roosevelt Financial Group, Inc. (Roosevelt or the Company) is a Delaware
corporation which was organized in 1988 by Roosevelt Bank, a federal savings
bank (the Bank) for the purpose of becoming a thrift institution holding
company for the Bank.  The Bank is a federally chartered stock savings bank
with 79 full service offices at December 31, 1996.  The Bank has 37 offices
serving the St. Louis metropolitan area, including Alton and Granite City,
Illinois and ten offices serving the Kansas City metropolitan area.  The
remaining 32 offices are located in Staunton, Illinois and Pittsburgh,
Kansas and the Missouri cities of Hannibal(2), Springfield(3), Columbia,
Union, Warrenton, St. James, Washington, Sikeston, Dexter, Malden, Poplar
Bluff, Hayti, Portageville, Cape Girardeau, Mexico, Jefferson City, Trenton,
Marshall, Sedalia, Clinton, Maryville, St. Joseph, Nevada, Lamar, Joplin(2)
and Kirksville.  Incorporated as a Missouri chartered mutual savings and
loan in 1924, the Bank converted to a federally chartered savings and loan
in 1935.  In 1987, the Bank became a stock savings and loan and, one year
later, converted to a stock savings bank, changing its name to Roosevelt
Bank, a federal savings bank.

Effective December 30, 1988, the Bank completed a holding company
reorganization of the Bank and the Company acquired all of the issued and
outstanding shares of common stock of the Bank.  On December 2, 1996, the
Company reorganized as both a thrift institution holding company and a bank
holding company and thereafter acquired all of the issued and outstanding
shares of common stock of Community Charter Corporation, Inc., the holding
company of Missouri State Bank (MSB) which has two offices in the city of
St. Louis, Missouri.   The principal assets of the Company are the common
stock of the Bank and MSB, both of which are wholly-owned subsidiaries.  The
Company's common stock is traded on the Nasdaq National Market under the
symbol "RFED".

On December 23, 1996, Roosevelt Financial Group, Inc. announced its
plans to merge with Mercantile Bancorporation Inc. (MTL).  Pursuant to the
agreement, Roosevelt shareholders will be able to elect to receive either
$22 in cash or .4211 shares of common stock (subject to the issuance of
a maximum number of shares of MTL common stock). Plans call for the
merger, which is subject to the approval of Roosevelt shareholders and all
appropriate regulatory agencies, to be completed in mid-1997.

Roosevelt's business consists primarily of attracting deposits from the
general public and using those deposits, together with borrowings and other
funds, to acquire real estate and consumer loans and mortgage-backed
securities, to perform loan servicing functions for others, and to provide
other retail banking and financial services to consumers.

The Company and the Bank are subject to examination and comprehensive
regulation and oversight by the Federal Reserve Board and the Office of
Thrift Supervision (the OTS), respectively. MSB is subject to examination
and comprehensive regulation and oversight by the Missouri Division of
Finance (MDF) and the Federal Deposit Insurance Corporation (FDIC). The
deposits of the Company's banking subsidiaries are primarily insured by
the Savings Association Insurance Fund (SAIF) and, to a lesser extent, by
the Bank Insurance Fund (BIF).  As such, the Bank subsidiaries are subject
to regulation by the FDIC.

Roosevelt's executive offices are located at 900 Roosevelt Parkway,
Chesterfield, Missouri 63017, and its telephone number is (314) 532-6200.
Unless otherwise indicated, references herein to Roosevelt or the Company
include the Bank and its subsidiaries and MSB on a consolidated basis.

CURRENT OPERATING STRATEGIES

Roosevelt's management believes that the long-term value of a financial
institution is related to having strong relationships with its customers
whereby a household seeks to derive most of its financial services from a
single vendor (like Roosevelt).  To position itself in this manner,
Roosevelt's business plan emphasizes 1) the origination of a higher
percentage of its assets; 2) the diversification of the balance sheet away
from only mortgage and real estate related assets; 3) the expansion of its
retail deposit base with a simultaneous shift within that deposit base
toward checking and transaction accounts; and 4) growth in fee income by
providing other services such as insurance, brokerage and mortgage loan
servicing for other investors.


<PAGE> 4


FORWARD-LOOKING STATEMENTS

When used in this Form 10-K or future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases "will
likely result", "are expected to", "will continue", "is anticipated",
"estimate", "project" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.  The Company wishes to caution readers not to
place undue reliance on any such forward-looking statements, which speak
only as of the date made, and to advise readers that various factors,
including regional and national economic conditions, substantial changes in
levels of market interest rates, credit and other risks of lending and
investment activities and competitive and regulatory factors could affect
the Company's financial performance and could cause the Company's actual
results for future periods to differ materially from those anticipated or
projected.

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


                                    2
<PAGE> 5

ACQUISITIONS

A substantial portion of the Company's growth since 1990 has occurred as a
result of acquisitions.  The following table summarizes Roosevelt's
acquisitions since the formation of the Company in 1988.

<TABLE>
<CAPTION>
               Acquisition                              Date
                   Name                               Acquired          Loans        Deposits        Assets     Branches
-----------------------------------------        ------------------    -------       --------        ------     --------
                                                                               (dollars in millions)
<S>                                               <C>                <C>            <C>            <C>           <C>
Home Federal Savings of Alton                     March 19, 1990      $   67.2       $   12.1       $   99.1        4
Hannibal Mutual Loan and Building Association     October 18, 1991         7.8           17.8           18.0        1
Conservative Bank, FSB                            November 9, 1992        41.5           61.2           64.5        4
First Granite City Savings and Loan               November 9, 1992        43.4           42.0           49.2        2
Brookside Savings Bank, FSB                       December 1, 1992        16.1          145.7          218.7        1
First Nationwide (branch purchases)               June 11, 1993           --            591.1           --         11
Home Savings of America (branch purchases)        November 8, 1993        --            738.1           --         13
Home Federal Bancorp of Missouri, Inc.            April 22, 1994         480.7          466.5          532.7        9
Farm & Home Financial Corporation                 June 30, 1994        1,843.3        2,094.7        3,173.5       27
WSB Bancorp, Inc.                                 October 20, 1995        80.9           80.8           96.9        2
Kirksville Bancshares, Inc.                       December 29, 1995       69.4          101.9          130.7        1
Mutual Bancompany, Inc.                           October 25, 1996        37.3           41.4           48.8        1
Sentinel Financial Corporation                    October 31, 1996        81.2          119.7          143.8        2
Community Charter Corporation                     December 2, 1996        54.0           67.2           76.8        2
</TABLE>

LENDING ACTIVITIES

The Company's lending activities are principally conducted through the
origination and purchase of loans.

Residential Lending - The Company's origination activities are generally
focused on communities in Missouri, southern Illinois, and eastern Kansas in
which its branches are located and in other midwestern states through its
correspondent network.  Primary emphasis is on mortgage loans secured by
existing one- to four-family residential properties.  At December 31, 1996,
loans secured by residential real estate totaled $3.8 billion, which
represented 87.74% of the Company's loan portfolio.

The Company's residential loan pricing discipline takes into consideration
duration of the loan, prepayment risks, servicing costs, and credit risk.  In
underwriting residential real estate loans, the Company evaluates both the
borrower's ability to make monthly payments and the value of the property
securing the loan.  Under federal regulations, a real estate loan may not
exceed 100% of the appraised value of the property securing the loan at the
time of origination.  The Company has adopted a policy of generally limiting
the loan-to-value ratio on originated loans and refinanced loans, depending
upon loan type, and generally requiring that all loans exceeding 80% of the
appraised value of the property or its purchase price, whichever is less, be
insured by a mortgage insurance company approved by the Federal Home Loan
Mortgage Corporation (FHLMC) in an amount sufficient to reduce the Company's
exposure to no greater than such 80% level.

In addition to interest earned on loans, the Company receives fees in
connection with the origination of loans, loan commitments, late payments,
and other miscellaneous services.  The amounts of such fees vary from time to
time, generally depending on competitive conditions in the mortgage market.

As described below, the Company currently offers several types of residential
loans.

Adjustable-Rate Mortgage Loans - The Company originates secured
adjustable-rate mortgage loans (ARMs) in principal amounts of up to $750,000,
depending upon loan type, loan-to-value ratio, and term.  The majority of
adjustable-rate mortgage loans which have been originated by the Company are
held in its portfolio.  ARM loans offered consist of a variety of types, with
interest rate adjustments ranging from one month to 10 years.  The ARMs
generally provide for adjustments to the interest rate based upon the one
or three year U.S. Treasury Bill Index adjusted to constant maturity, plus
a margin which is determined at the time of application and remains
constant for the life of the loan.  Interest rate adjustments are limited
to a maximum of 2% per year and a maximum of 6% over the life of the loan
on both one-year and the three-year adjustable mortgages.

                                    3
<PAGE> 6

Fixed-Rate Loans - The Company also originates secured fixed-rate mortgage
loans in principal amounts of up to $750,000, depending upon loan type,
loan-to-value ratio, and term.  The Company's fixed-rate loans generally have
terms from 15 to 30 years with monthly payments which fully amortize the
principal and interest over the life of the loan.  The Company may
occasionally originate balloon/interest reset mortgages that are fixed-rate.

FHA/VA Loans - The Company originates FHA insured and VA guaranteed single
family mortgage loans.  Guidelines for processing, underwriting, and closing
of these loans, which typically have terms to maturity of 25 to 30 years, are
established by the FHA and the VA.

The types of loans which the Bank may originate are restricted by the Home
Owner's Loan Act and other laws and are regulated by the OTS.  MSB is
similarly restricted by Missouri law and regulation by MDF. Roosevelt is
permitted to originate or purchase loans and loan participations secured
by real estate located in any part of the United States.  Roosevelt's
residential lending is primarily concentrated in the geographical location
of its branches and in other midwestern states through the Company's
correspondent network.

Commercial Real Estate and Construction Lending - Loans originated by the
Company generally are secured by first liens on the properties to which they
relate.  The Company also purchases real estate loans and loan participations
from selected sellers.  The Company focuses its originations on properties
located within its retail markets of Missouri, southern Illinois and eastern
Kansas.

At December 31, 1996, loans secured by commercial real estate (including
multi-family residential properties) and construction lending totaled $181.3
million of which loans secured by commercial real estate totaled $153.4
million, representing 3.55% of the Company's total loan portfolio.  The
Company's portfolio of commercial real estate loans is secured by liens on
office buildings, apartments, land, and shopping centers.

Consumer Lending - Federal regulations permit federally chartered thrift
institutions to make secured and unsecured consumer loans up to a maximum of
35% of the institution's total assets, less permissible investments in
commercial paper and corporate debt.  In addition, federal thrift
institutions have lending authority above the 35% limit for certain consumer
loans such as home equity loans, property improvement loans, mobile home
loans, credit card loans and deposit secured loans.

The Company offers various variable-rate and fixed-rate consumer loans,
including automobile, marine, recreational vehicle, home improvement,
unsecured personal, credit card and home equity loans.  The Company also
offers loans to its depositors on the security of their deposit accounts.

Substantially all consumer loans made directly to the borrower are originated
in branches within the states of Missouri and Illinois.  Roosevelt has placed
a renewed emphasis on the origination of consumer loans due to their
generally higher yielding nature.  During the second half of 1995, Roosevelt
began purchasing "A" quality indirect auto lease paper originated by a
leasing company.  These loans are secured by the types of autos which
generally hold their value well and have good mechanical histories.  Indirect
auto lease originations totaled $34.9 million during 1996.

During the second half of 1996, Roosevelt entered into an agreement with a
third party to solicit, administer and service credit card accounts.
Underwriting guidelines have been established by Roosevelt.  Two types of
cards are offered; VISA Gold, which provides a $15,000 unsecured line of
credit and VISA Classic which provides a $5,000 unsecured line of credit.
Credit card originations resulting from this agreement totaled $165.1 million
during 1996.

At December 31, 1996, the Company's consumer loan balances totaled $348.3
million which represented 8.07% of the Company's total loan portfolio.

                                    4
<PAGE> 7

<TABLE>
Loan Portfolio Composition   The following table sets forth information
concerning the composition of the Company's loan portfolio in dollar amounts
and in percentages by type of loan at the dates indicated.

<CAPTION>

                                                                        DECEMBER 31,
                         ----------------------------------------------------------------------------------------------------------
                                 1996                1995                1994                   1993                  1992
                         -------------------  -------------------  -------------------   -------------------   --------------------
                         AMOUNT      PERCENT  AMOUNT      PERCENT  AMOUNT      PERCENT   AMOUNT      PERCENT   AMOUNT       PERCENT
                         ------      -------  ------      -------  ------      -------   ------      -------   ------       -------
                                                               (DOLLARS IN THOUSANDS)
<S>                      <C>         <C>      <C>         <C>      <C>         <C>       <C>         <C>       <C>          <C>
REAL ESTATE LOANS:
  Residential            $3,791,145   87.74%  $3,320,098   92.35%  $2,887,992   92.48%   $2,465,592   89.78%   $2,141,863    88.36%
  Commercial                153,375    3.55      137,507    3.83      132,316    4.24       144,295    5.25       134,321     5.54
  Construction               27,876    0.64       11,969    0.33       18,489    0.59        95,550    3.48       109,627     4.52
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------     ---------   ------
    Total real estate
     loans held to
     maturity             3,972,396   91.93    3,469,574   96.51    3,038,797   97.31     2,705,437   98.51     2,385,811    98.42

CONSUMER LOANS              348,280    8.07      125,633    3.49       84,013    2.69        40,831    1.49        38,381     1.58
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------     ---------   ------
    Total loans           4,320,676  100.00%   3,595,207  100.00%   3,122,810  100.00%    2,746,268  100.00%    2,424,192   100.00%
                                     ======               ======               ======                ======                 ======

LESS:
  Loans in process           10,131                4,266               28,348                59,146                41,833
  Deferred fees and
   discounts (premiums)     (10,643)              (8,806)                (604)                6,256                21,835
  Allowance for losses       22,719               21,855               22,915                 9,056                10,753
                         ----------           ----------           ----------            ----------            ----------
    Loans, net           $4,298,469           $3,577,892           $3,072,151            $2,671,810            $2,349,771
                         ==========           ==========           ==========            ==========            ==========
</TABLE>

                                    5
<PAGE> 8

<TABLE>
The following table shows the composition of the Company's fixed- and
adjustable-rate loans at the dates indicated.

<CAPTION>

                                                                        DECEMBER 31,
                         ----------------------------------------------------------------------------------------------------------
                                 1996                1995                1994                   1993                  1992
                         -------------------  -------------------  -------------------   -------------------   --------------------
                         AMOUNT      PERCENT  AMOUNT      PERCENT  AMOUNT      PERCENT   AMOUNT      PERCENT   AMOUNT       PERCENT
                         ------      -------  ------      -------  ------      -------   ------      -------   ------       -------
                                                               (DOLLARS IN THOUSANDS)
<S>                      <C>         <C>      <C>         <C>      <C>         <C>       <C>         <C>       <C>          <C>
FIXED-RATE LOANS:
  Real estate:
    Residential          $1,192,987   27.61%  $1,226,691   34.12%  $1,107,604   35.47%   $1,171,453   42.66%   $1,437,122    59.29%
    Commercial              108,576    2.51       74,271    2.07       77,164    2.47        82,209    2.99        82,275     3.39
    Construction             18,694     .43        1,202     .03           --      --            --      --            --       --
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------    ----------   ------
      Total fixed-rate
        real estate
        loans             1,320,257   30.55    1,302,164   36.22    1,184,768   37.94     1,253,662   45.65     1,519,397    62.68
    Consumer                135,444    3.14       58,645    1.63       28,715    0.92        22,680    0.83        25,396     1.05
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------    ----------   ------
      Total fixed-rate
        loans             1,455,701   33.69    1,360,809   37.85    1,213,483   38.86     1,276,342   46.48     1,544,793    63.73
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------    ----------   ------
ADJUSTABLE-RATE LOANS:
  Real estate:
    Residential           2,598,158   60.13    2,093,407   58.23    1,780,388   57.01     1,294,139   47.12       704,741    29.07
    Commercial               44,799    1.04       63,236    1.76       55,152    1.77        62,086    2.26        52,046     2.15
    Construction              9,182     .21       10,767    0.30       18,489    0.59        95,550    3.48       109,627     4.52
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------    ----------   ------
      Total adjustable-
        rate real estate
        loans             2,652,139   61.38    2,167,410   60.29    1,854,029   59.37     1,451,775   52.86       866,414    35.74
    Consumer                212,836    4.93       66,988    1.86       55,298    1.77        18,151    0.66        12,985     0.53
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------    ----------   ------
      Total adjustable-
        rate loans        2,864,975   66.31    2,234,398   62.15    1,909,327   61.14     1,469,926   53.52       879,399    36.27
                         ----------  ------   ----------  ------   ----------  ------    ----------  ------    ----------   ------
      Total loans         4,320,676  100.00%   3,595,207  100.00%   3,122,810  100.00%    2,746,268  100.00%    2,424,192   100.00%
                                     ======               ======               ======                ======                 ======
LESS:
  Loans in process           10,131                4,266               28,348                59,146                41,833
  Deferred fees and
    discounts (premiums)    (10,643)              (8,806)                (604)                6,256                21,835
  Allowance for losses       22,719               21,855               22,915                 9,056                10,753
                         ----------           ----------           ----------            ----------            ----------
      Loans, net         $4,298,469           $3,577,892           $3,072,151            $2,671,810            $2,349,771
                         ==========           ==========           ==========            ==========            ==========
</TABLE>

                                    6
<PAGE> 9


INVESTMENT AND MORTGAGE-BACKED SECURITIES

The Company invests in short-term investments such as United States Treasury
securities and United States agency securities, commercial paper, short-term
corporate debt securities, and overnight federal funds.  The Company is
required by federal regulations to maintain a minimum amount of liquid assets
that may be invested in specific securities and is also permitted to make
certain other securities investments.  The balance of the investment
securities maintained by the Company in excess of regulatory requirements
reflects management's objective of maintaining liquidity at a level that
assures the availability of adequate funds, taking into account anticipated
cash flows and available sources of credit, for meeting withdrawal requests
and loan commitments and making other investments.  See
"Regulation-Liquidity."

The acquisition of mortgage-backed securities is designed to (i) generate
positive interest rate spreads on large principal balances with minimal
administrative expense, (ii) lower the credit risk of the Company's loan
portfolio, and (iii) enable the Company to use these mortgage-backed
securities as collateral for financings in the capital markets.
Mortgage-backed securities acquired by the Company for investment typically
consist of FHLMC mortgage participation certificates (FHLMC Certificates),
FNMA mortgage pass-through certificates (FNMA Certificates) and/or GNMA
fully-modified, pass- through mortgage-backed certificates (GNMA
Certificates), and private issue pass-through certificates, each of which is
described below.

FHLMC Certificates - FHLMC Certificates represent undivided interests in
specified pools of fixed, variable, or adjustable rate, conventional
residential mortgage loans or participation interests in conventional
residential mortgage loans purchased by FHLMC.  FHLMC guarantees to each
registered holder of a FHLMC Certificate the timely payment of interest.
FHLMC also guarantees to each registered holder of a FHLMC Certificate the
ultimate collection by such holder of principal thereof, but, except in
certain cases, does not guarantee the timely payment of principal thereof.
The obligations of FHLMC are not backed by, nor entitled to, the full faith
and credit of the United States.  Neither the United States nor any agency or
instrumentality of the United States is obligated to finance the operations
of FHLMC or to assist FHLMC in any other manner.  There is currently an
active secondary market for FHLMC Certificates, but there is no assurance
that this market will continue in the future.

FNMA Certificates - FNMA Certificates represent undivided interests in
specified pools of fixed, variable, or adjustable rate one- to four-family
residential mortgage loans.  FNMA guarantees the timely payment of scheduled
principal and interest (at the applicable certificate rate).  The obligations
of FNMA under its guarantees are obligations solely of FNMA and are not
backed by, nor entitled to, the full faith and credit of the United States.
Neither the United States nor any agency or instrumentality of the United
States is obligated to finance FNMA's operations or to assist FNMA in any
other manner.  There is currently an active secondary market for FNMA
Certificates, but there can be no assurance that this market will continue in
the future.

GNMA Certificates - GNMA Certificates are issued and serviced by a mortgage
banking company or financial institution approved by GNMA as a
seller-servicer of Federal Housing Administration (FHA) insured mortgage
notes or Veterans Administration (VA) guaranteed mortgage notes.  The full and
timely payment of principal of, and interest on, each GNMA Certificate is
guaranteed by GNMA, which obligation is backed by the full faith and credit of
the United States.  Each GNMA Certificate evidences a fractional undivided
interest in a pool of FHA insured mortgage notes and VA guaranteed mortgage
notes secured by mortgages on single family dwellings.  There is currently an
active secondary market for GNMA Certificates, but there is no assurance that
this market will continue in the future.

Private-Issue Certificates - Private pass-through certificates represent
primarily undivided interests in specified pools of fixed, variable or
adjustable rate one-to-four family residential mortgage loans.  Such
securities are issued by private entities such as commercial banks, thrifts,
and other financial entities.  At December 31, 1996, the Company's $2.3
billion portfolio of private pass-throughs was primarily comprised  of
adjustable rate securities. The repricing characteristics of such securities
were primarily tied to the one year constant maturity treasury rate. These
securities are not guaranteed nor insured by any government agency.  Instead,
the credit risk on such securities is lowered through mortgage pool
insurance, letters of credit, guarantees, or subordinated interests.  At
December 31, 1996, there were approximately $1.1 billion of private issue
pass-through certificates with related unrealized losses totaling $15.3
million. None of the individual unrealized losses exceeded $1.3 million or
5.4% of the respective security balance.

Since mortgage-backed securities are asset-backed, they are subject to
inherent risks based upon the future performance of the underlying collateral
(i.e., mortgage loans) for these securities.  Among these risks, are
prepayment risk and interest-rate risk.  Should general interest-rate levels
decline, the mortgage-backed securities portfolio would be subject to i)
prepayments as borrowers typically would seek to obtain financing at lower
rates, ii) a decline in interest income received on adjustable-rate
mortgage-backed securities, and iii) an increase in fair value of fixed rate
mortgage-backed securities.  Conversely, should general interest rate levels
increase,

                                    7
<PAGE> 10
the mortgage-backed securities portfolio would be subject to i) a longer term
to maturity as borrowers would be less likely to prepay their loans, ii) an
increase in interest income received on adjustable-rate mortgage-backed
securities, iii) a decline in fair value of fixed-rate mortgage-backed
securities, and iv) a decline in fair value of adjustable-rate
mortgage-backed securities to an extent dependent upon the level of
interest-rate increases, the time period of the next interest rate repricing
date for the individual security and the applicable periodic (annual and/or
lifetime) cap which could limit the degree to which the individual security
could reprice within a given time period.

Unlike U.S. Government agency mortgage-backed securities which include a full
guarantee of principal and interest, private issuer mortgage-backed
securities are generally structured with a senior ownership position and
subordinate ownership position(s) providing credit support of the senior
position.  In a limited number of cases, this support is provided through
letters of credit or cash reserves.  Given the structure of the private
issuer mortgage-backed securities, the Company has credit risk in addition to
interest-rate and prepayment risk discussed above.  In this regard,
management has instituted a monitoring system tracking the major factors
affecting the performance of a private issuer mortgage-backed security
including i) a review of delinquencies, foreclosures, repossessions and
recovery rates relative to the underlying mortgage loans collateralizing each
security, ii) the level of available subordination or other credit
enhancement and iii) the rating assigned to each security by independent
national rating agencies.


SECURITIES AVAILABLE FOR SALE

The following table sets forth information concerning the Company's
securities available for sale portfolio at the dates indicated, at fair
value:

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                  ----------------------------------------
                                                       1996          1995          1994
                                                      ------        ------        ------
                                                                (in thousands)
<S>                                              <C>           <C>           <C>
Investment Securities:
  U.S. Government and agency obligations          $    12,398   $    11,085   $        --
  Corporate securities                                 15,037        16,763            --
  FHLB stock                                          155,792       132,009       109,136
                                                   ----------    ----------    ----------
                                                      183,227       159,857       109,136
                                                   ----------    ----------    ----------
Mortgage-backed Securities:
  Mortgage-backed certificates                        373,970     1,372,947     1,533,312
  Private pass-throughs                             2,334,617            --            --
  Collateralized mortgage obligations                 168,361            --            --
  Other                                                38,573        60,701        59,703
  Derivative financial instruments:
    Interest rate exchange agreements                      --       (6,528)         3,476
    Interest rate cap agreements                       57,333         8,738        57,897
    Interest rate floor agreements                      1,676        10,746         1,582
    Exchange traded options                                --            --           593
                                                   ----------    ----------    ----------
                                                    2,974,530     1,446,604     1,656,563
                                                   ----------    ----------    ----------
                                                  $ 3,157,757   $ 1,606,461   $ 1,765,699
                                                   ==========    ==========    ==========
</TABLE>


                                    8
<PAGE> 11


The following schedule illustrates the contractual maturities of the
Company's securities available for sale portfolio at December 31, 1996.

<TABLE>
<CAPTION>
                                                       DUE AFTER ONE  DUE AFTER FIVE
                                           DUE WITHIN   BUT WITHIN      BUT WITHIN    DUE AFTER     NO STATED
                                            ONE YEAR    FIVE YEARS      TEN YEARS     TEN YEARS     MATURITY         TOTAL
                                           ----------  ------------   -------------   ---------    ----------       -------
                                                                    (in thousands)

<S>                                       <C>           <C>            <C>         <C>             <C>          <C>
Investment Securities:
  U.S. Government and agency obligations   $  1,999      $  10,399      $     --    $        --     $      --     $    12,398
  Corporate securities                        1,869         11,821         1,313             34            --          15,037
  FHLB stock                                     --             --            --             --       155,792         155,792
                                            -------       --------       -------     ----------      --------      ----------
                                              3,868         22,220         1,313             34       155,792         183,227
                                            -------       --------       -------     ----------      --------      ----------
Mortgage-backed Securities:
  Mortgage-backed certificates               10,258         61,439        10,464        291,809            --         373,970
  Private pass-throughs                          --         25,046           246      2,309,325            --       2,334,617
  Collateralized mortgage obligations           161          2,962            --        165,238            --         168,361
  Other                                          --             --            --         38,573            --          38,573
  Derivative financial instruments:
    Interest rate cap agreements                 --          5,818        51,515             --            --          57,333
    Interest rate floor agreements            1,676             --            --             --            --           1,676
                                            -------       --------       -------     ----------      --------      ----------
                                             12,095         95,265        62,225      2,804,945            --       2,974,530
                                            -------       --------       -------     ----------      --------      ----------
                                           $ 15,963      $ 117,485      $ 63,538    $ 2,804,979     $ 155,792     $ 3,157,757
                                            =======       ========       =======     ==========      ========      ==========

Weighted average yield                        6.15%          6.63%         7.80%          7.37%          7.00%         7.42%
                                              ====           ====          ====           ====           ====          ====
</TABLE>


                                    9
<PAGE> 12

At December 31, 1996, the Company held certain mortgage-backed securities
classified as available for sale (which are included in the preceding
securities available for sale composition table) whose amortized cost by
issuer exceeded ten  percent of the Company's stockholders' equity.  Such
investments are detailed as follows:

<TABLE>
<CAPTION>
       Issuer                                       Amortized Cost  Market Value
       ------                                       --------------  ------------
                                                           (in thousands)

<S>                                                  <C>            <C>
       Resolution Trust Corporation                   $ 329,177      $ 325,570
       Prudential Home Mortgage Services                324,229        323,518
       Ryland Mortgage Securities Corporation           275,557        275,277
       Saxon Mortgage Securities Corporation            137,950        137,936
       Capstead Securities Corporation                  195,920        195,395
       Nomura Asset Capital Corporation                 127,605        125,103
       Securitized Asset Sales, Inc.                    106,614        107,500
       Sears Mortgage Securities                         87,991         87,322
       Greenwich Capital Acceptance, Inc.                87,178         90,617
       Donaldson, Lufkin & Jenrette Securities Corp.     72,039         74,183
       Citicorp Mortgage Securities, Inc.                65,488         65,994
       Residential Funding Corporation                   60,414         59,861
       Guardian Savings & Loan Association               55,253         57,045
</TABLE>



SECURITIES HELD TO MATURITY

The following table sets forth information concerning the Company's
securities held to maturity portfolio at the dates indicated, at
amortized cost:

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                              ---------------------------------------------------
                                                   1996              1995              1994
                                                 --------          --------          --------
                                                                (in thousands)
<S>                                             <C>            <C>               <C>
Investment Securities:
 U.S. Government and agency obligations          $     --       $   113,554       $   115,500
 Corporate securities                                  --             5,632            41,273
                                                   ------         ---------         ---------
                                                       --           119,186           156,773
                                                   ------         ---------         ---------
Mortgage-backed Securities:
  Mortgage-backed certificates                         --           384,795           459,190
  Private pass-throughs                                --         2,705,311         2,271,272
  Collateralized mortgage obligations                  --           340,848           388,827
                                                   ------         ---------         ---------
                                                       --         3,430,954         3,119,289
                                                   ------         ---------         ---------

                                                 $     --       $ 3,550,140       $ 3,276,062
                                                   ======         =========         =========
</TABLE>

In December 1996, the Company reclassified its entire investment and
mortgage-backed securities portfolio from held to maturity to available for
sale.  The securities transferred consisted of investment securities with
approximate amortized cost and market values of $114.3 million and
$114.9 million, respectively and mortgage-backed securities with
approximate amortized cost and market values of $3.1 billion.  This action
was taken to provide the Company maximum flexibility to manage its
portfolio.

                                    10
<PAGE> 13

CLASSIFIED ASSETS, LOAN DELINQUENCIES AND DEFAULTS

Federal regulations provide for the classification of loans, debt and equity
securities, and other assets considered to be of lesser quality as
"substandard",  "doubtful" or "loss" assets.  The regulations require
institutions to classify their own assets and to establish prudent general
allowances for losses for assets classified "substandard" or "doubtful."  The
OTS may require the establishment of a general allowance for losses based on
assets classified as "substandard" and "doubtful" or based on the general
quality of the asset portfolio of an institution.  For the portion of assets
classified as "loss," an institution is required to either establish specific
allowances of 100% of the amount classified or charge such amount off its
books.  Assets which do not currently expose the institution to sufficient
risk to warrant classification in one of the aforementioned categories but
possess potential weaknesses are required to be designated "special mention"
by management.

When a borrower fails to make a required payment on the loan, the Company
attempts to cause the delinquency to be cured by contacting the borrower.  In
the case of residential loans, telephone contacts are normally made after a
payment is 19 days past due.  In most cases, delinquencies are cured
promptly.  If the delinquency is not cured by the 30th day, written contacts
or personal calls are made to the borrower.  If the delinquency continues for
a period of 90 days, the Company usually institutes appropriate action to
foreclose the property.  If foreclosed, the property is sold at public
auction and may be purchased by the Company.  Under Missouri law, subject to
rights of redemption and certain homestead and other exemptions, property
normally may be foreclosed after payments become more than 31 days past due,
by publishing or posting appropriate notices of the foreclosure action during
a subsequent period of 20 days.  Delinquent consumer loans are generally
handled in a similar manner, except that initial telephone contacts are made
when the payment is five days past due.  The Company's procedures for
repossession and sale of consumer collateral are subject to various
requirements under Missouri consumer protection laws.  See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Asset Quality" for further discussion.

PROVISIONS FOR LOSSES ON LOANS AND REAL ESTATE OWNED

The Company establishes valuation allowances for anticipated losses on loans,
foreclosed assets, and real estate acquired for development and sale, as
described below.  Although management believes it uses the best available
information in establishing valuation allowances, future provisions for loss
charged to expense may be necessary if circumstances differ substantially
from the assumptions currently used.

Loans - The allowance for loan losses is maintained at an amount considered
adequate to provide for losses.  The provision for loan losses charged to
expense is based on periodic analysis of the loan portfolio by management.
In this regard, management considers various risk factors including, but not
limited to, general economic conditions, loan portfolio composition, prior
loss experience, and independent appraisals.  In addition to an allowance for
losses on identified problem loans, an overall unallocated allowance is
maintained to provide for unidentified credit losses.  In estimating such
losses, management considers various risk factors including geographic
location, loan collateral, and prior loss experience.

The allowance for loan losses increased significantly during 1994 when
compared to prior years.  After combining the Roosevelt, Farm & Home, and
Home Federal loan portfolios which resulted in a combined portfolio
approximately five times the size of Roosevelt's March 31, 1994 portfolio
(approximately $650 million to $3.0 billion), management determined it was
necessary to substantially increase the allowance for loan losses to achieve
higher and more conservative coverage levels.  Factors considered by
management in determining the necessity and amount of the provision necessary
to bring the overall allowance to the desired level were i) the need to
conform Farm & Home's coverage ratio (ratio of allowance for loan losses to
total gross loans) of .24% at December 31, 1993, to that of Roosevelt's which
was .61% at the comparable date.  This resulted in an additional required
provision of approximately $7.3 million, ii) the previously discussed five
fold increase in the size of the overall loan portfolio coupled with the fact
that, at the time, Roosevelt management had no previous track record of
managing a portfolio of that size, and iii) the Farm & Home and Home Federal
mergers effectively doubled the overall size of the entity resulting in the
Company moving up to a new peer group whose average allowance for loan losses
as a percentage of total loans far exceeded the allowances of the unadjusted
combined entity.  Also, since just prior to the merger, both Farm & Home and
Roosevelt had recently been through examinations by the OTS, the Company
initiated conversations with the OTS to obtain their concurrence with the
planned addition to the allowance for loan losses.  Such concurrence was
received and the resulting $11.4 million provision was recorded.

                                    11
<PAGE> 14


Real Estate Owned - Real estate owned includes properties acquired through
foreclosure and properties acquired for development and sale. Real estate
acquired through foreclosure is transferred to real estate owned at estimated
fair value, which represents the new recorded basis of the property.
Subsequently, properties are evaluated and any additional declines in value
are provided for in an allowance for losses on real estate. Real estate
acquired for development and sale is carried at the lower of cost or
estimated net realizable value.

While the valuation allowances for losses on loans, foreclosed assets, and
real estate acquired for development and sale are considered adequate, the
Company's allowances are subject to review by regulatory authorities.  In the
course of their periodic examinations, the Company may be instructed to
establish additional general or specific reserves in addition to the amounts
previously established.

                                    12
<PAGE> 15
<TABLE>
The following table sets forth an analysis of the Company's allowance for
loan losses.

<CAPTION>
                                                                            DECEMBER 31,
                               ---------------------------------------------------------------------------------------------------
                                      1996                1995               1994               1993               1992
                               ---------------------------------------------------------------------------------------------------
                                       CATEGORY'S            CATEGORY'S          CATEGORY'S        CATEGORY'S           CATEGORY'S
                                         PERCENT               PERCENT             PERCENT           PERCENT              PERCENT
                                        OF TOTAL              OF TOTAL            OF TOTAL          OF TOTAL             OF TOTAL
                               AMOUNT    LOANS     AMOUNT      LOANS     AMOUNT    LOANS    AMOUNT   LOANS     AMOUNT     LOANS
                               ------  ----------  ------    ---------- ------  ---------- ------ ----------  ------   ----------
                                                           (DOLLARS IN THOUSANDS)

<S>                           <C>        <C>      <C>        <C>      <C>         <C>      <C>       <C>      <C>        <C>
Balance at beginning of
 period                       $ 21,855            $ 22,915            $  9,056             $10,753            $  9,063
Charge-offs:
  Residential                    1,930               3,177                 358                 824                 468
  Commercial real estate            13                 155                 696               1,535               1,611
  Consumer                         230                 114                  33                 169                  66
  Construction                      --                  87                  --                  --                  --
                               -------             -------             -------              ------             -------
                                 2,173               3,533               1,087               2,528               2,145
                               -------             -------             -------              ------             -------
Recoveries:
  Residential                      497                   3                  16                  --                  --
  Commercial real estate            --                  74                   5                 125                  21
  Consumer                          36                  30                  10                  --                 184
  Construction                      --                  --                  --                  --                  --
                               -------             -------             -------              ------             -------
                                   533                 107                  31                 125                 205
                               -------             -------             -------              ------             -------
    Net charge-offs              1,640               3,426               1,056               2,403               1,940

Additions charged to
 operations                      1,262               1,200              12,432                 706               2,648
Additions acquired
 through acquisitions            1,242               1,166               2,483                  --                 982
                               -------             -------             -------              ------             -------
Balance at end of period        22,719            $ 21,855            $ 22,915             $ 9,056            $ 10,753
                               =======             =======             =======              ======             =======
Ratio of net charge-offs
 during the period to
 average loans outstanding
 during the period                 .04%                .10%                .04%                .09%                .13%
                               =======             =======             =======              ======             =======
Allowance distribution:
  Residential                 $ 15,827    87.8%   $ 17,309    92.4%   $ 17,570     92.5%   $ 4,245    89.8%   $  4,208    88.4%
  Commercial real estate         4,017     3.5       4,220     3.8       4,776      4.2      4,463     5.2       5,835     5.5
  Consumer                       2,767     8.1         326     3.5         410      2.7        348     1.5         710     1.6
  Construction                     108      .6          --      .3         159       .6         --     3.5          --     4.5
                               -------   -----     -------   -----     -------    -----     ------   -----     -------   -----
                              $ 22,719   100.0%   $ 21,855   100.0%   $ 22,915    100.0%   $ 9,056   100.0%   $ 10,753   100.0%
                               =======   =====     =======   =====     =======    =====     ======   =====     =======   =====
</TABLE>

                                    13
<PAGE> 16

DEPOSITS AND OTHER SOURCES OF FUNDS

Deposit accounts have traditionally been a principal source of the Company's
funds for use in lending and for other general business purposes.  In addition
to deposits, the Company derives funds from loan repayments, loan and
securities sales, cash flows generated from operations (including interest
credited to deposit accounts), FHLB advances, and collateralized borrowings.
Borrowings may be used on a short-term basis to compensate for seasonal
reductions in deposits or for deposit inflows at less than projected levels
and may be used on a longer-term basis to support expanded lending activities.

Deposits - The Company attracts both short-term and long-term deposits from
the general public by offering a wide assortment of accounts and rates.  The
Company offers checking accounts, various money market accounts, regular
passbook accounts, fixed interest rate certificates with varying maturities,
negotiated rate certificates of deposit in minimum amounts of $100,000
("Jumbo" accounts), and individual retirement accounts.  The Company does not
generally seek to attract Jumbo accounts or brokered deposits.

The Company's variety of deposit accounts has allowed it to remain competitive
and respond to changes in consumer demands.  The Company has become more
subject to short-term fluctuations in deposit flows, as many customers have
become more interest rate conscious.  The ability of the Company to attract
and maintain deposits, which affects its cost of funds, will continue to be
significantly affected by market conditions.

The following table sets forth the deposit flows of the Company during the
periods indicated.  Net deposits (withdrawals) refers to the amount of
deposits (exclusive of interest credited) during a period less the amount of
withdrawals during the period.  The net deposit inflows during 1996 resulted
from an aggressive marketing campaign by the Company to attract retail
deposits, especially checking and money market accounts.  The net deposit
outflows in 1995 and 1994 resulted from conservative pricing and a general
industry trend of depositors seeking improved yields in a relatively low
interest rate environment. Deposit flows at savings institutions may also be
influenced by external factors such as governmental credit policies.

<TABLE>
<CAPTION>
                                                          FOR THE YEAR ENDED DECEMBER 31,
                                                  ----------------------------------------------
                                                      1996            1995              1994
                                                  ------------    ------------      ------------
                                                                  (IN THOUSANDS)

<S>                                             <C>             <C>               <C>
Net deposits (withdrawals)                         $  24,756      $ (346,551)       $ (711,218)
Deposits assumed from acquisitions                   228,242         182,566           468,877
Deposits sold                                             --              --           (68,134)
Interest credited                                    186,022         172,774           132,330
Unearned discount on brokered certificates                68            (117)               --
Net adjustment related to purchase method of
  accounting                                             486            (564)           (3,962)
                                                   ---------       ---------         ---------
Net increase (decrease) in deposits                  439,574           8,108          (182,107)
Beginning balance                                  4,907,497       4,899,389         5,081,496
                                                   ---------       ---------         ---------
Ending balance                                   $ 5,347,071     $ 4,907,497       $ 4,899,389
                                                   =========       =========         =========

     Percent increase (decrease)                         9.0 %           0.2 %            (3.6) %
                                                         ===             ===              =====
</TABLE>


                                    14
<PAGE> 17

Borrowings -  The Company's other sources of funds include securities sold
under agreements to repurchase, advances from the FHLB of Des Moines, and
longer-term borrowings such as its mortgage-backed bonds and subordinated
notes.  These borrowings totaled $3.1 million, $1.8 billion and $0.00, and
$1.1 billion, $2.4 billion and $47.5 million at December 31, 1996 and 1995,
respectively.

As a member of the FHLB of Des Moines, the Company is required to own capital
stock in the FHLB of Des Moines and is authorized to apply for advances from
the FHLB of Des Moines.  All long-term FHLB advances must be for the purpose
of financing residential housing.  Members must meet community lending
standards established by Federal Housing Finance Board (FHFB) regulations to
have continued access to long-term FHLB advances.  The Company does not expect
that these limitations will have a significant impact on its access to
long-term advances.  Each FHLB credit program has its own interest rate, which
may be fixed or variable, and range of maturities.  The FHLB of Des Moines may
prescribe additional acceptable uses to which these advances may be put, as
well as limitations on the size of the advances and repayment provisions.  See
"Regulation--Federal Home Loan Bank System."

The form of agreement to repurchase securities sold used by the Company is a
sale of securities to primary dealers with a commitment to repurchase
securities at a predetermined price at a future date, typically ranging
between 30 days and 90 days from the date of the initial sale.

See Notes 11, 12, 13 and 14 of Notes to Consolidated Financial Statements for
further information regarding deposits and other borrowings.

ASSET/LIABILITY MANAGEMENT

The long-term profitability of the Company depends not only on the success of
the services it offers to its customers and the quality of its loans and
investments, but also the extent to which its earnings and net market value
are affected by changes in interest rates.   Roosevelt's asset and liability
management strategy attempts to reduce the variability in net interest income
and net market value caused by interest rate changes.

One means of reducing the effect of interest rate volatility on net interest
income is to shorten asset maturities.  In recent years, Roosevelt has
attempted to do this by emphasizing the origination and purchase of
adjustable-rate mortgage loans and the purchase of adjustable-rate
mortgage-backed securities.  In addition to the origination and purchase of
adjustable-rate loans and investments discussed above, the Company will also
utilize derivative financial instruments; such as interest exchange
agreements, interest rate cap and floor agreements and, to a much lesser
extent, interest rate futures contracts to help manage its interest rate risk.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Asset/Liability Management" and Note 15 to Notes to
Consolidated Financial Statements for further information regarding the
Company's interest rate risk management practices.

SUBSIDIARIES

Roosevelt is permitted, through the Bank, to invest in the capital stock,
obligations, or other specified types of securities of subsidiaries (referred
to as "service corporations") and to make loans to such subsidiaries, and
joint ventures in which such subsidiaries are participants, in an aggregate
amount not exceeding 2% of the Bank's assets.  The Bank may invest an
additional 1% of its assets in service corporation activities that serve
primarily specified community or inner-city developments.  Federal regulations
also permit institutions to make specified types of loans to such service
corporation subsidiaries (other than special-purpose finance subsidiaries), in
which the institution owns more than 10% of the stock, in an aggregate amount
not exceeding 50% of the institution's regulatory capital.  In addition,
federal savings associations are permitted to invest unlimited amounts in
subsidiaries that are engaged solely in activities that the association may
conduct.  At December 31, 1996, the Bank is in compliance with the
requirements.

Roosevelt Financial Services, Inc. (prior to 1994 known as Roosevelt Insurance
Agency, Inc.) is a diversified general insurance agency.  It provides life,
health, property, casualty, commercial insurance coverages, and tax deferred
annuities  and other investment products to Roosevelt's customers and the
general public.  Stocks and bonds are offered to Roosevelt's customers on a
discount basis through a clearing broker/dealer.  Mutual funds are offered to
the Roosevelt's customers and the general public by registered representatives
through an arrangement between Roosevelt Financial Services, Inc. and a
registered broker/dealer.


F&H Realty, a subsidiary of Roosevelt Financial Group, Inc., is a
Missouri-chartered real estate investment company.  It owns real estate held
for investment or for the purpose of developing and selling lots, primarily
for single-family dwellings.  It was formed in December 1992 and was later
transferred to the Company under the name Farm & Home as a dividend-in-kind
from the Bank, previously known as Farm & Home Savings Association.

                                    15
<PAGE> 18

REGULATION

The Company currently has two financial institution subsidiaries, the Bank,
which is a Federally chartered savings bank, and MSB, a Missouri chartered bank
and trust company.  The deposits of the Bank and Missouri State Bank are
federally insured up to applicable limits by the FDIC and are backed by the
full faith and credit of the United States Government. The Bank is subject to
broad federal regulation and oversight extending to all its operations.  The
Bank is a member of the FHLB of Des Moines and is subject to certain limited
regulation by the Federal Reserve Board (the FRB).  The Company is also subject
to federal regulation and oversight as a bank holding company. Missouri State
Bank is subject to extensive regulation, supervision and examination by the
Missouri Division of Finance (the MDF) and the FDIC, which are its state and
primary federal banking regulators, respectively.  As with the Bank, this
supervision governs the activities which it can engage in. Certain of these
regulatory requirements and restrictions are discussed below and elsewhere in
this document. See "Bank Holding Company Regulation".

FEDERAL REGULATION OF FINANCIAL INSTITUTIONS
The OTS, as the primary federal regulatory agency of the Bank, and the
FDIC, as insurer and back-up regulator, have extensive supervisory
authority over the operations of savings associations.  The Bank is
required to file periodic reports with the OTS and may be examined
periodically by the OTS and FDIC. Missouri State Bank is also required to
file periodic reports with the MDF and the FDIC and is periodically
examined by such agencies.  The Bank was most recently examined by the OTS
and the FDIC in April, 1996.  All savings associations are subject to an
annual assessment to fund the operations of the OTS.  The general
assessment, to be paid on a semi-annual basis, is computed based upon the
savings association's total assets, as reported in the association's
latest quarterly thrift financial report.  The Bank's OTS assessment for
1996 was $1.2 million.

The pervasive regulatory authority of the federal banking regulators is backed
by extensive enforcement authority over all FDIC-insured institutions,
including the Bank and Missouri State Bank.  This enforcement authority
includes among other things, the ability to impose operational restrictions,
to commence cease-and-desist proceedings, to assess civil money penalties and
to initiate proceedings to remove individuals from their positions and
prohibit them from service with any savings association.  Such actions may
generally be initiated to prevent, terminate or remedy violations of laws,
regulations or unsafe or unsound practices.  Additional grounds include
failure to file accurate and timely reports with the federal banking
regulators.

The Bank's general permissible lending limit for loans-to-one borrower is
equal to 15% of unimpaired capital and surplus (except for loans fully secured
by certain readily marketable collateral, in which case this limit is
increased to 25% of unimpaired capital and surplus).  At December 31, 1996,
the Bank's lending limit under this restriction was $66.2 million.  The Bank
is in compliance with the loans-to-one borrower limitation.

The OTS, as well as the other federal banking agencies, have adopted
guidelines establishing safety and soundness standards.  Any institution which
fails to comply with these standards must submit a compliance plan.  A failure
to submit a plan or to comply with an approved plan will subject the
institution to further enforcement action.

INSURANCE OF ACCOUNTS AND REGULATION BY THE FDIC
The Bank is a member of the SAIF and Missouri State Bank is a member of the
BIF, each of which is administered by the FDIC. Their deposits are insured up
to applicable limits by the FDIC and such insurance is backed by the full
faith and credit of the United States Government.  As insurer, the FDIC
assesses deposit insurance premiums and is authorized to conduct examinations
of and to require reporting by FDIC insured institutions.  It may also
prohibit any FDIC insured institution from engaging in any activity the FDIC
determines by regulation or order to pose a serious risk to the BIF or
the SAIF.  The FDIC also has the authority to initiate enforcement actions
against savings associations, after giving the OTS an opportunity to take
such action, and may terminate the deposit insurance if it determines that
the institution has engaged or is engaging in unsafe or unsound practices,
or is in an unsafe or unsound condition.

The FDIC's deposit insurance premiums are assessed through a risk-based system
under which all insured depository institutions are placed into one of nine
categories and assessed insurance premiums based on their level of capital and
supervisory evaluation.  The assessment schedule for BIF and SAIF insured
institutions ranged from .23% to .31% of deposits during the first half of
1995.  Under this system, institutions classified as well-capitalized (i.e., a
core capital ratio of at least 5%, a ratio of Tier 1 or core capital to
risk-weighted assets (Tier 1 risk-based capital) ratio of at least 6% and a
risk-based capital ratio of at least 10%) and considered healthy would pay the
lowest premium while institutions that are less than adequately capitalized
(i.e., core or Tier 1 risk-based capital ratios of less than 4% or a
risk-based capital ratio of less than 8%) and considered of substantial
supervisory concern would pay the highest premium.  Risk classification of all
insured

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<PAGE> 19
institutions will be made by the FDIC for each semi-annual assessment
period. The Bank and Missouri State Bank qualify as "well-capitalized".

The FDIC is authorized to increase such assessment rates, on a semiannual
basis, if it determines that the reserve ratio of the SAIF will be less than
the designated reserve ratio of 1.25% of SAIF insured deposits.  In setting
these increased assessments, the FDIC must seek to restore the reserve ratio
to that designated reserve level, or such higher reserve ratio as established
by the FDIC.  In addition the FDIC may impose special assessments on SAIF
members to repay amounts borrowed from the United States Treasury or for any
other reason deemed necessary by the FDIC.

As in the case with the SAIF, the FDIC is authorized to adjust the insurance
premium rates for banks that are insured by the BIF of the FDIC in order to
maintain the reserve ratio of the BIF at 1.25% of BIF insured deposits.  As a
result of the BIF reaching its statutory reserve ratio the FDIC revised the
premium schedule for BIF insured institutions to provide a range of .04% to
 .31% of deposits.  The revisions became effective in the third quarter of
1995.  The BIF premium schedule was further revised, effective January 1996,
to provide a range of 0% to .27%.  The SAIF rates, however, were not adjusted.

At the time the FDIC revised the BIF premium schedule, it noted that, absent
legislative action (as discussed below), the SAIF would not attain the
designated reserve ratio until the year 2002.  As a result, SAIF insured
members would continue to be generally subject to higher deposit insurance
premiums than BIF insured institutions until, all things being equal, the SAIF
attained the required reserve ratio.

In order to eliminate this disparity and any competitive disadvantage caused
thereby, legislation to recapitalize the SAIF was enacted in September 1996.
The legislation provided for a one-time assessment to be imposed on all
deposits assessed at the SAIF rates, as of March 31, 1995, in order to
recapitalize the SAIF. It also provided for the merger of the BIF and SAIF on
January 1, 1999, if no savings association then exists.  The special
assessment ratio was established at 0.657% of deposits by the FDIC and
resulted in an assessment to the Bank of $27.4 million or $17.8 million
after the effect of taxes.  This special assessment, which was paid in
November 1996, significantly increased noninterest expense and adversely
affected the Bank's results of operations for 1996.

Prior to the enactment of the legislation, a portion of the SAIF assessment
was used to repay obligations issued by a federally chartered corporation to
provide financing (FICO) for resolving the thrift crisis in the 1980's.
Although the SAIF assessment schedule was equalized with the BIF assessment
schedule, effective October 1, 1996, SAIF-insured institutions continue
to be subject to a FICO assessment as a result of this continuing obligation.
The legislation also now requires assessments to be made on BIF-assessable
deposits for this purpose, effective January 1, 1997, however, that assessment
will be limited to 20% of the rate imposed on SAIF assessable deposits until
the earlier of December 31, 1999 or when no savings association continues to
exist, thereby imposing a greater burden on SAIF member institutions such as
the Bank.  Thereafter, assessments on BIF-member institutions will be made on
the same basis as SAIF-member institutions.  The rates established by the FDIC
to implement this requirement for all FDIC-insured institutions are 6.48 basis
points assessment on SAIF deposits and 1.30 basis points on BIF deposits until
BIF insured institutions participate fully in the assessment.  These rates may
be revised in the future based upon changes in the BIF and SAIF assessment
base.


REGULATORY CAPITAL REQUIREMENTS
Federally insured financial institutions, such as the Bank and Missouri State
Bank, are required to maintain a minimum level of regulatory capital.  The OTS
has established capital standards, including a tangible capital requirement, a
leverage ratio (or core capital) requirement and a risk-based capital
requirement applicable to such savings associations.  Missouri State Bank is
also subject to a core capital and risk-based capital requirement established
by the FDIC that are similar to that imposed on the Bank.

Tangible Capital - The capital regulations require tangible capital of at
least 1.5% of adjusted total assets (as defined by regulation).  Tangible
capital generally includes common stockholders' equity and certain
noncumulative perpetual preferred stock.  In addition, all intangible
assets, other than a limited amount of purchased mortgage servicing rights,
must be deducted from tangible capital.

The OTS regulations establish special tangible capital requirements for
savings associations that own subsidiaries.  In determining compliance with
the capital requirements, all subsidiaries engaged solely in activities
permissible for national banks or engaged in certain other activities solely
as an agent for its customers, are "includable" subsidiaries that are
consolidated for capital purposes in proportion to the association's level of
ownership, including the assets of includable subsidiaries in which the
association has a minority interest that are not consolidated for generally
accepted accounting principles.  For excludable subsidiaries, the debt and
equity investments in such subsidiaries must be deducted from assets and
capital.

                                    17
<PAGE> 20

At December 31, 1996, the Bank had tangible capital of approximately $423.2
million, or 5.44% of adjusted total assets, which is approximately $306.6
million above the minimum requirement of 1.50% adjusted total assets in effect
on that date.

Core Capital - The capital standards also require core capital equal to at
least 3% of adjusted total assets.  Core capital generally consists of
tangible capital plus certain intangible assets.  At December 31, 1996, the
Bank had $2.0 million of core deposit intangibles included in core capital
under these tests and had core capital equal to approximately $425.3 million,
or 5.47% of adjusted total assets, which is $192.0 million above the minimum
leverage ratio requirement of 3% in effect on that date.  As a result of the
prompt corrective action provisions discussed below, however, all FDIC insured
institutions must maintain a core capital level of at least 4% to be
considered adequately capitalized unless its supervisory condition is such to
allow it to maintain a 3% ratio.  Missouri State Bank was also in compliance
with its core capital requirement on such date.

Risk-Based Capital - The OTS risk-based requirement requires savings
associations to have total capital of at least 8% of risk-weighted assets.
Total capital consists of core capital, as defined above, and supplementary
capital.  Supplementary capital consists of certain permanent and maturing
capital instruments that do not qualify as core capital and general valuation
loan and lease loss allowances up to a maximum of 1.25% of risk-weighted
assets.  Supplementary capital may be used to satisfy the risk-based
requirement only to the extent of core capital.  The federal banking
regulators are also authorized to require a savings association to maintain
additional risk-based capital to account for concentration of credit risk and
the risk of non-traditional activities.  At December 31, 1996, the Bank did
not have any capital instruments that qualified as supplementary capital and
had $18.9 million of general loss allowances, which was less than 1% of
risk-weighted assets.

In determining the amount of risk-weighted assets, all assets, including the
credit equivalent amount of certain off-balance sheet items, will be
multiplied by a risk weight ranging from 0% to 100% based on the risks
inherent in the type of asset.  For example, the OTS has assigned a risk
weight of 50% for performing and prudently underwritten permanent one- to
four-family first mortgage loans not more than 90 days past due and with a
loan-to-value ratio of not more than 80% at origination unless insured to such
ratio by an insurer approved by the FNMA or FHLMC.

On December 31, 1996, the Bank had total risk-weighted capital of
approximately $444.2 million (including $18.9 million of general loss
allowances).  The Bank had risk-weighted assets of $3.8 billion (including
$162.8 million in credit equivalent amounts of converted off-balance sheet
items) for total risk-weighted capital of 11.75% of risk-weighted assets.
This amount was approximately $141.7 million above the 8% requirement in
effect on that date.  Missouri State Bank was also in compliance with its
requirement on such date.

Every savings association with more than normal interest rate risk is required
to deduct from its total capital, for purposes of determining compliance with
such requirement, an amount equal to 50% of its interest-rate risk exposure
multiplied by the present value of its assets.  This exposure is a measure of
the potential decline in the net portfolio value of a savings association,
greater than 2% of the present value of its assets, based upon a hypothetical
200 basis point increase or decrease in interest rates (whichever results in a
greater decline).  Net portfolio value is the present value of expected cash
flows from assets, liabilities and off-balance sheet contracts.  The
regulation provides for a two quarter lag between calculating interest rate
risk and recognizing any deduction from capital.  The OTS recently announced
that it will delay the effective date of the regulation until it evaluates the
process by which an association may appeal an interest-rate risk capital
deduction determination.  If the regulation had been in effect at December 31,
1996, the Bank would have had no such deduction from total capital on such
date.

An FDIC-insured institution's primary federal regulator is authorized and,
under certain circumstances required, to take certain actions against
institutions that fail to meet their capital requirements.   The regulator is
generally required to take action to restrict the activities of an
"undercapitalized institution" (generally defined to be one with less than a
4% core and Tier 1 risk-based capital ratios and less than an 8% risk-based
capital ratio).  Any such institution must submit a capital restoration plan
and until such plan is approved by its regulator may not increase it assets,
acquire another institution, establish a branch or engage in any new
activities, and generally may not make capital distributions.  The regulator
is authorized to impose the additional restrictions, discussed below, that are
applicable to significantly undercapitalized institutions.

As a condition to the approval of the capital restoration plan, any company
controlling an undercapitalized association must agree that it will enter into
a limited capital maintenance guarantee with respect to the institution's
achievement of its capital requirements.  In any bankruptcy proceedings by
the Company, any claim against the Company under such a guarantee would have
priority over the claims of unsecured creditors.

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<PAGE> 21


Any institution that fails to comply with its capital plan or is
"significantly undercapitalized" (i.e., Tier 1 risk-based or core capital
ratios of less than 3% or a risk-based capital ratio of less than 6%) must be
subjected by its regulator to one or more of a number of additional specified
actions and operating restrictions which may cover all aspects of its
operations and include a forced merger or acquisition of the institution.  An
institution that becomes "critically undercapitalized" (i.e., a tangible
capital ratio of 2% or less) is subject to further mandatory restrictions on
its activities in addition to those applicable to significantly
undercapitalized institutions.  In addition, a receiver (or conservator with
the concurrence of the FDIC) must be appointed for an institution, with
certain limited exceptions, within 90 days after it becomes critically
undercapitalized.

An institution's primary federal regulator is also generally authorized to
reclassify an institution into a lower capital category and impose the
restrictions applicable to such category if it determines that an institution
is in an unsafe or unsound condition or is engaged in an unsafe or unsound
practice.

The imposition of any of these measures on the Bank may have substantial
adverse effect on the Bank's operations and profitability and the value of
Roosevelt's common and preferred stock.  Roosevelt stockholders do not have
preemptive rights, and therefore, if Roosevelt is directed by the OTS or the
FDIC to issue additional shares of common or preferred stock, such issuance
may result in the dilution in the percentage of ownership of the stockholders
of Roosevelt.

LIMITATIONS ON DIVIDENDS AND OTHER CAPITAL DISTRIBUTIONS
OTS regulations impose various restrictions on associations, including the
Bank, with respect to their ability to make capital distributions, which
include dividends, stock redemptions or repurchases, cash-out mergers,
interest payments on certain convertible debt, and other transactions charged
to the capital account.  As of December 31, 1996, the Bank would have been
permitted to pay dividends of $70.8 million consistent with these
restrictions, subject to giving the notice referred to below and receiving no
objection from the OTS.

Generally, associations such as the Bank that before and after the proposed
distribution meet or exceed their capital requirements, may make capital
distributions during any calendar year up to the greater of 100% of net income
for the year-to-date plus 50% of the amount by which the lesser of the
association's tangible, core, or risk-based capital exceeds its requirement
for such capital component, as measured at the beginning of the calendar year,
or 75% of net income for the most recent four quarter period.  However, an
association deemed to be in need of more than normal supervision by the OTS
may have its dividend authority restricted.  Missouri State Bank is generally
authorized to pay dividends out of current and retained earnings.

Associations proposing to make any capital distribution must submit written
notice to the OTS 30 days prior to such distribution.  Associations that do
not meet minimum capital requirements that propose to make any capital
distribution must obtain OTS approval prior to making such distributions.  The
OTS may object to the distribution during that 30-day period based on safety
and soundness concerns.

The OTS has proposed regulations that would revise the current capital
distribution restrictions.  Under the proposal a savings association may make
a capital distribution without notice to the OTS (unless it is a subsidiary of
a holding company) provided that it has a CAMEL 1 or 2 rating, is not of
supervisory concern and would remain adequately capitalized (as defined in the
OTS prompt corrective action regulations) following the proposed distribution.
Savings associations that would remain adequately capitalized following the
proposed distribution but do not meet the other noted requirements must notify
the OTS 30 days prior to declaring a capital distribution.  The OTS stated,
however, it will generally regard as permissible that amount of capital
distributions that do not exceed 50% of the institution's excess regulatory
capital plus net income to date during the calendar year.  A savings
association may not make a capital distribution without prior approval of the
OTS and the FDIC if it is undercapitalized before, or as a result of, such a
distribution.  As under the current rule, the OTS may object to a capital
distribution if it would constitute an unsafe or unsound practice.  No
assurance may be given as to whether or in what form the proposed regulations
may be adopted.

LIQUIDITY
Each savings association, including the Bank, is required to maintain an
average daily balance of liquid assets equal to a certain percentage of the
sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less.  This liquid asset ratio requirement
may vary from time to time (between 4% and 10%) depending on the economic
conditions and savings flows of all savings associations.  At the present
time, the minimum liquid asset ratio is 5%.

In addition, short-term liquid assets (e.g., cash, certain time deposits,
certain bankers' acceptances and short-term United States Treasury
obligations) currently must constitute at least 1% of an association's average
daily balance of net withdrawable deposit accounts and current borrowings.
Penalties may be imposed upon associations for violations of either liquid
asset ratio requirement.  At December 31, 1996, the Bank was in compliance
with both requirements.

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<PAGE> 22

QUALIFIED THRIFT LENDER TEST
All savings associations, including the Bank, are required to meet a qualified
thrift lender (QTL) test to avoid certain restrictions on their operations.
The QTL test requires a savings association to have at least 65% of its
portfolio assets (which consist of total assets less intangibles, properties
used to conduct the savings association's business and liquid assets not
exceeding 20% of total assets) in qualified thrift investments and to meet
that test on a monthly average for nine out of every 12 months on a rolling
basis.  Such assets primarily consist of residential housing related loans and
investments.  As of December 31, 1996, the Bank had a QTL ratio of 98.6%,
which was in compliance with the 65% QTL test, and has always been in
compliance with the QTL requirement.

Any savings association that fails to meet the test must convert to a national
bank charter, unless it requalifies as a QTL and thereafter remains a QTL.  If
the association does not requalify and converts to a national bank charter, it
must remain SAIF insured until the FDIC permits it to transfer to the BIF. If
an association that fails the test has not yet requalified and has not
converted to a national bank, its new investments and activities are limited
to those permissible for a national bank and it is limited to national bank
branching rights in its home state.  In addition, the association is
immediately ineligible to receive any new FHLB borrowings and is subject to
national bank limits for payment of dividends.  If such association has not
requalified or converted to a national bank within three years after the
failure, it must divest of all investments and cease all activities not
permissible for a national bank.  In addition, it must repay promptly any
outstanding FHLB borrowings, which may result in prepayment penalties.

TRANSACTION WITH AFFILIATES
Transactions between an FDIC-insured institution, such as the Bank or Missouri
State Bank or any of its subsidiaries, and its affiliates are subject to
numerous restrictions.  Generally, such transactions must be on terms at least
as favorable to the Bank as those prevailing at the time for comparable
transactions with nonaffiliated companies.  Most transactions are also subject
to quantitative ceilings, and many must be secured by eligible collateral.  In
addition, savings associations are prohibited from investing in the securities
of an affiliate (other than a subsidiary) or extending credit to an affiliate
engaged in activities not permissible for a bank holding company.  For these
purposes, an affiliate is defined as a company that controls, or is under
common control with, the Bank but does not include a subsidiary of the Bank
unless specially determined by OTS or the FRB.  None of the Bank's
subsidiaries have been so designated.

Certain transactions with directors, officers or controlling persons are also
subject to conflict of interest laws and regulations enforced by federal
banking regulators.  These regulations and other statutes also impose
restrictions on loans to such persons and their related interests.  Among
other things, such loans must be made on terms substantially the same as for
loans to unaffiliated individuals unless made pursuant to an employee benefits
program.


BANK HOLDING COMPANY REGULATION

General - As a bank holding company, Roosevelt is subject to comprehensive
regulation by the FRB under the Bank Holding Company Act of 1956 (the BHCA).
Roosevelt is required to file reports with the FRB and is subject to regular
inspections by the FRB. The FRB also has extensive enforcement authority over
bank holding companies, including, among other things, the ability to assess
civil money penalties, to issue cease and desist or removal orders and to
require that a holding company divest subsidiaries (including its bank
subsidiaries).  In general, enforcement actions may be initiated for
violations of law and regulations and unsafe or unsound practices.

Under FRB policy, a bank holding company must serve as a source of strength
for its subsidiary banks.  Under this policy the FRB may require, and has
required in the past, a holding company to contribute additional capital to an
undercapitalized subsidiary bank.

Under the BHCA, a bank holding company must obtain FRB approval before: (i)
acquiring, directly or indirectly, ownership or control of any voting shares
of another bank or bank holding company if, after such acquisition, it would
own or control more than 5% of such shares (unless it already owns or controls
the majority of such shares); (ii) acquiring all or substantially all of the
assets of another bank or bank holding company; or (iii) merging or
consolidating with another bank holding company.

The BHCA prohibits a bank holding company, with certain exceptions, from
acquiring direct or indirect ownership or control of more than 5% of the
voting shares of any company which is not a bank or bank holding company, or
from engaging directly or indirectly in activities other than those of
banking, managing or controlling banks, or providing services for its
subsidiaries.  The principal exceptions to these prohibitions involve certain
non-bank activities which, by statute or by FRB regulation or order, have been
identified as activities closely related to the business of banking or
managing or controlling banks.  The list of activities permitted by the FRB
includes, among other things, operating a savings institution (such as the
Bank), mortgage company, finance company, credit card company or factoring
company; performing certain data processing operations; providing certain
investment and financial advice; underwriting and acting as an insurance

                                    20
<PAGE> 23
agent for certain types of credit-related insurance; leasing property on a
full-payout, non-operating basis; selling money orders, travelers' checks and
United States Savings Bonds; real estate and personal property appraising;
providing tax planning and preparation services; and, subject to certain
limitations, providing securities brokerage services for customers.  The scope
of permissible activities may be expanded from time to time by the FRB.  Such
activities may also be affected by federal legislation.

Interstate Banking and Branching - In 1994, the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994 (the Riegle-Neal Act) was enacted to
ease restrictions on interstate banking.  Effective September 29, 1995, the
Riegle-Neal Act allows the FRB to approve an application of an adequately
capitalized and adequately managed bank holding company to acquire control of,
or acquire all or substantially all of the assets of, a bank located in a
state other than such holding company's home state, without regard to whether
the transaction is prohibited by the laws of any state.  The FRB may not
approve the acquisition of a bank that has not been in existence for the
minimum time period (not exceeding five years) specified by the statutory law
of the host state.  The Riegle-Neal Act also prohibits the FRB from approving
an application if the applicant (and its depository institution affiliates)
controls or would control more than 10% of the insured deposits in the United
States or 30% or more of the deposits in the target bank's home state or in
any state in which the target bank maintains a branch.  The Riegle-Neal Act
does not affect the authority of states to limit the percentage of total
insured deposits in the state which may be held or controlled by a bank or
bank holding company to the extent such limitation does not discriminate
against out-of-state banks or bank holding companies.  Individual states may
also waive the 30% state-wide concentration limit contained in the Riegle-Neal
Act.

Additionally, beginning on June 1, 1997, the federal banking agencies will be
authorized to approve interstate merger transactions without regard to whether
such transaction is prohibited by the law of any state, unless the home state
of one of the banks opts out of the Riegle-Neal Act by adopting a law after
the date of enactment of the Riegle-Neal Act and prior to June 1, 1997 which
applies equally to all out-of-state banks and expressly prohibits merger
transactions involving out-of-state banks.  Interstate acquisitions of
branches will be permitted only if the law of the state in which the branch is
located permits such acquisitions. Interstate mergers and branch acquisitions
will also be subject to the nationwide and statewide insured deposit
concentration amounts described above.

The Riegle-Neal Act authorizes the Office of the Comptroller of the Currency
and the FDIC to approve interstate branching de novo by national and state
banks, respectively, only in states which specifically allow for such
branching.  The Riegle-Neal Act also requires the appropriate federal banking
agencies to prescribe regulations by June 1, 1997 which prohibit any
out-of-state bank from using the interstate branching authority primarily for
the purpose of deposit production.  These regulations must include guidelines
to ensure that interstate branches operated by an out-of-state bank in a host
state are reasonably helping to meet the credit needs of the communities which
they serve.  The State of Missouri has not yet authorized interstate merger
transactions or de novo interstate branching.

Any future acquisitions of thrift institutions by Roosevelt will continue to
be subject to the HOLA.  As a federal thrift institution, the Bank, subject to
certain conditions, has nationwide branching authority.

Dividends - The FRB has issued a policy statement on the payment of cash
dividends by bank holding companies, which expresses the FRB's view that a
bank holding company should pay cash dividends only to the extent that its net
income for the past year is sufficient to cover both the cash dividends and a
rate of earning retention that is consistent with the holding company's
capital needs, asset quality and overall financial condition.  The FRB also
indicated that it would be inappropriate for a company experiencing serious
financial problems to borrow funds to pay dividends.  Furthermore, under the
prompt corrective action regulations adopted by the FRB, the FRB may prohibit
a bank holding company from paying any dividends if the holding company's bank
subsidiary is classified as "undercapitalized".

Bank holding companies are required to give the FRB prior written notice of
any purchase or redemption of its outstanding equity securities if the gross
consideration for the purchase or redemption, when combined with the net
consideration paid for all such purchases or redemptions during the preceding
12 months, is equal to 10% or more of their consolidated net worth.  The FRB
may disapprove such a purchase or redemption if it determines that the
proposal would constitute an unsafe or unsound practice or would violate any
law, regulation, FRB order, or any condition imposed by, or written agreement
with, the FRB. This notification requirement does not apply to any company
that meets the well-capitalized standard for commercial banks, has a safety
and soundness examination rating of at least a "2" and is not subject to any
unresolved supervisory issues.

Capital Requirements - The FRB has established capital requirements for bank
holding companies that generally parallel the capital requirements for
national banks and federal thrift institutions such as the Bank.

                                    21
<PAGE> 24

FEDERAL SECURITIES LAW
The stock of Roosevelt is registered with the Securities and Exchange
Commission (SEC) under the Securities Exchange Act of 1934, as amended (the
Exchange Act).  Roosevelt is subject to the information, proxy solicitation,
insider trading restrictions and other requirements of the SEC under the
Exchange Act.

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

FEDERAL RESERVE SYSTEM
The FRB requires all depository institutions to maintain non-interest-bearing
reserves at specified levels against their transaction accounts (primarily
checking, NOW and Super NOW checking accounts).  At December 31, 1996 the Bank
and Missouri State Bank were in compliance with these reserve requirements.
The balances maintained to meet the reserve requirements imposed by the FRB
may be used to satisfy liquidity requirements that may be imposed by the OTS.

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

FEDERAL HOME LOAN BANK SYSTEM
The Bank is a member of the FHLB of Des Moines which is one of 12 regional
FHLBs that regulate the home financing credit function of savings
associations.  Each FHLB serves as a reserve or central bank for its members
within its assigned region.  It is funded primarily from proceeds derived from
the sale of consolidated obligations of the FHLB System.  It makes loans to
members (i.e., advances) in accordance with policies and procedures
established by the board of directors of the FHLB.  These policies and
procedures are subject to the regulation and oversight of the Federal Housing
Finance Board.  All advances from the FHLB are required to be fully secured by
sufficient collateral as determined by the FHLB.  In addition, all long-term
advances are required to provide funds for residential home financing.

As a member, the Bank is required to purchase and maintain stock in the FHLB
of Des Moines.  At December 31, 1996 the Bank had approximately $155.8 million
in FHLB of Des Moines stock, which was in compliance with this requirement.

The FHLBs are required to provide funds for the resolution of troubled savings
associations and to contribute to low and moderately priced housing programs
through direct loans or interest subsidies on advances targeted for community
investment and low-and moderate-income housing projects.  These contributions
have adversely affected the level of FHLB dividends paid and could continue to
do so in the future.  For 1996 cash dividends paid by the FHLB of Des Moines
to the Bank totaled $10.1 million, all of which was paid as a cash dividend.

TAXATION
For federal income tax purposes, Roosevelt reports its income and expenses
using the accrual method of accounting and uses the calendar year as its
tax year.  Roosevelt is subject to federal income tax under existing
provisions of the Internal Revenue Service Code in generally the same manner
as other corporations.

Missouri-based thrift institutions, such as the Bank, are subject to a special
financial institutions tax, based on net income without regard to net
operating loss carryforwards at the rate of 7% of net income.  This tax is in
lieu of all other state taxes on thrift institutions on their property,
capital or income.

As a Delaware business corporation, Roosevelt is required to file annual
returns with and pay annual fees to the State of Delaware.  Roosevelt is also
subject to an annual franchise tax imposed by the State of Delaware based on
the number of authorized shares of its common stock.  If and to the extent
Roosevelt carries on activities in other states, it may in certain
circumstances be subject to such states' tax laws.

COMMUNITY REINVESTMENT ACT
The Community Reinvestment Act (CRA) requires financial institutions regulated
by the federal financial supervisory agencies to ascertain and help meet the
credit needs of their delineated communities, including low-income and
moderate-income neighborhoods within those communities, while maintaining safe
and sound banking practices.  The agencies evaluate an institution's CRA
performance based on a four-tiered descriptive rating system and are required
to make public an institution's rating and written evaluation.  The four
possible ratings

                                    22
<PAGE> 25
of meeting community credit needs are outstanding, satisfactory, needs to
improve, and substantial noncompliance.

Many factors play a role in assessing a financial institution's CRA
performance.  The institution's regulator must consider its financial capacity
and size, legal impediments, local economic conditions and demographics,
including the competitive environment in which it operates.  The evaluation
does not rely on absolute standards and the institutions are not required to
perform specific activities or to provide specific amounts or types of credit.

During 1996, the Bank received a satisfactory rating from the OTS.  This
rating reflects Roosevelt's commitment to meeting the credit needs of the
communities it serves.  The Bank maintains a CRA statement for public viewing,
as well as an annual CRA highlights document.  These documents describe the
Bank's credit programs and services, community outreach activities,  public
comments and other efforts to meet community credit needs.  Missouri State
Bank also received a satisfactory rating on its latest CRA examination.

COMPETITION

The Company faces strong competition both in originating real estate and other
loans and in attracting deposits.  Competition in originating real estate
loans comes primarily from other savings institutions, commercial banks, and
mortgage bankers making loans secured by real estate located in the Company's
market area.  Commercial banks and finance companies, including finance
company affiliates of automobile manufacturers, provide vigorous competition
in consumer lending.  The Company competes for real estate and other loans
principally on the basis of the interest rates and loan fees it charges, the
types of loans it originates, and the quality of services it provides to
borrowers.

The Company faces substantial competition in attracting deposits from other
savings institutions, commercial banks, money market and mutual funds, credit
unions, and other investment vehicles.  The ability of the Company to attract
and retain deposits depends on its ability to provide investment opportunities
that satisfy the requirements of investors as to rate of return, liquidity,
risk, and other factors.  The Company attracts a significant amount of
deposits through its branch offices, primarily from the communities in which
those branch offices are located; therefore, competition for those deposits is
principally from other savings institutions and commercial banks located in
the same communities.  The Company competes for these deposits by offering a
variety of deposit accounts at competitive rates, convenient business hours,
and convenient branch locations with interbranch deposit and withdrawal
privileges at each.


                                    23
<PAGE> 26


MANAGEMENT OF REGISTRANT AND ITS SUBSIDIARIES

The following table sets forth certain information with respect to each
executive officer of the Company and the Bank as of  February 28, 1997.

<TABLE>
<CAPTION>
NAME                              AGE         POSITION HELD
----                              ---         -------------

<S>                              <C>     <C>
Stanley J. Bradshaw               39     Chairman, President and
                                         Chief Executive Officer

Anat Bird                         45     Senior Executive Vice President and
                                         Chief Operating Officer

Gary W. Douglass                  46     Executive Vice President and
                                         Chief Financial Officer
</TABLE>

The following is a description of the principal occupation and employment of
the executive officers of the Company and the Bank during at least the last
five years.  Except as otherwise indicated, all officers of the Company have
held their positions since the formation of the Company in 1988.

Stanley J. Bradshaw - Mr. Bradshaw joined Roosevelt in 1985 as Vice President
and Chief Lending Officer and in 1987 was elected Senior Vice President and
Chief Investment Officer.  During 1988, he was elected Executive Vice
President and became Roosevelt's Chief Operating Officer.  He joined the Board
of Directors and became President and Chief Executive Officer in 1991.  During
1996, he was appointed Chairman of the Board of Directors at the Company and
the Bank and now carries the title of Chairman, President and Chief Executive
Officer.

Anat Bird - Mrs. Bird joined the Company and the Bank as Senior Executive Vice
President and Chief Operating Officer in July 1995.  In January 1991, Mrs.
Bird founded the Financial Institutions Consulting Group (FIGC) at BDO
Seidman, New York, New York and developed and managed FIGC through June 1994.
In June 1994, Mrs. Bird Founded SCB Forums, LTD., a financial institutions
consulting firm located in New York City and the successor to FinExc
Group, L.L.C.

Gary W. Douglass - Mr. Douglass joined the Company and the Bank as Executive
Vice President and Chief Financial Officer on March 9, 1995.  Prior to joining
the Company and the Bank, Mr. Douglass was a partner for Deloitte & Touche
LLP, a big six international accounting firm where he was the partner in
charge of the accounting and auditing function and financial institution
practice of the firm's St. Louis office.


EMPLOYEES

At December 31, 1996, the Company had a total of 1,357 employees, including
178 part-time employees.  None of the Company's employees are represented by a
collective bargaining group.  Management considers its employee relations to
be good.


                                    24
<PAGE> 27


ITEM 2. PROPERTIES

The Company's headquarters, which is a leased facility, is located in
Chesterfield, Missouri.  The Company's mortgage loan servicing office (owned)
is located in Nevada, Missouri and a consumer loan servicing office (leased)
is located in Creve Coeur, Missouri.  In addition to these, the Company has an
additional 81 branch offices, of which 76 are located in the State of
Missouri, four are located in the State of Illinois, and one is located in the
State of Kansas.  39 of these offices are located in the St. Louis
metropolitan area of which 29 branches are owned by the Company and 10 are
leased.  The leases expire from 1997 through 2010.  Ten of these offices are
located in the Kansas City metropolitan area of which four branches are owned
by the Company and six are leased.  The leases expire from 1997 to 2014.  The
remaining 32 offices are located in Staunton, Illinois and Pittsburgh, Kansas
and the Missouri cities of Hannibal(2), Springfield(3), Columbia, Nevada,
Union, Warrenton, St. James, Washington, Sikeston, Dexter, Malden, Poplar
Bluff, Hayti, Portageville, Cape Girardeau, Mexico, Jefferson City, Trenton,
Marshall, Sedalia, Clinton, Maryville, St. Joseph, Lamar, Joplin(2) and
Kirksville.  26 of these offices are owned by the Company and six offices are
leased.  The leases expire from 1997 through 2009.  The Company's net
investment in its home and branch offices, premises, equipment, and leaseholds
was $55.0 million at December 31, 1996.

ITEM 3. LEGAL PROCEEDINGS

Roosevelt has certain litigation and claims in process resulting from
activities arising from normal operations.  In the opinion of management, none
of these matters is likely to have a material adverse effect on its financial
position.

Among the matters referred to above and as a result of the acquisition of Farm
& Home Financial Corporation (Farm & Home) which was completed in June 1994,
the Company has become successor to certain legal proceedings which involved
Farm & Home Savings Association, a Farm & Home subsidiary (Farm & Home
Savings).  The following is a discussion of such proceedings.  Prior to 1985,
the Southbend Subdivision was developed by Farm & Home Savings and a
co-developer on property owned by Farm & Home Savings adjacent to a toxic
waste disposal site near Houston, Texas (the Brio Site).  Neither Farm & Home,
Farm & Home Savings nor the Company has been designated a "potentially
responsible party" with respect to the Brio Site or any remediation thereof.

Farm & Home Savings (and the Bank as successor to Farm & Home Savings) has
been named in a number of lawsuits by various parties claiming personal injury
and property damage from exposure to the Brio Site wastes as a result of Farm
& Home Savings' development of Southbend Subdivision.  These claims have
involved homeowners and their children who lived in the Southbend Subdivision
as well as others who have visited the subdivision or attended Weber
Elementary School, which was located within the Southbend Subdivision, and
others who either played on ball fields that were in close proximity to the
subdivision or in some cases lived in neighboring subdivisions (the Claims).
Pursuant to settlement agreements dated May 1987 and March 1993 between Farm &
Home, Farm & Home Savings, and United States Fire Insurance Company, North
River Insurance Company and Commonwealth Lloyds Insurance Company of Texas
(the Insurance Companies), the Insurance Companies have been defending and
indemnifying Farm & Home Savings (and the Bank as successor to Farm & Home
Savings) against the Claims and have agreed to assume the exclusive obligation
and responsibility for acquiring the lots and homes in the Southbend
Subdivision.  The 1987 settlement agreement provided that the Insurance
Companies would defend and pay on behalf of Farm & Home Savings all damages
and settlements (without limitation as to time frame or dollar amount) arising
out of past, present and future claims and demands in connection with the
Southbend Subdivision's proximity to the Brio Site, and also arising out of,
resulting from, or relating to the alleged hazardous wastes at the Brio Site.

The Insurance Companies issued a reservation of rights to certain Claims filed
in 1993.  Pursuant to a further settlement agreement, the Insurance Companies
have agreed to continue to defend and indemnify the Bank against all pending
Claims, subject to the Insurance Companies' right to reassert their
reservation of rights in the future.

Currently, there are approximately nine hundred Claims pending against Farm &
Home Savings involving the Southbend Subdivision and/or the Brio Site, and it
is possible that in the future additional claims may be filed by others.
While the outcome of the Claims and any future claims cannot be predicted with
certainty, based upon consultation with outside counsel, it is the belief of
the Company that, pursuant to the settlement agreements, the Insurance
Companies are responsible for the payment of all Claims and that the risk of
significant loss to the Company related thereto would be remote.

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

No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the quarter ended December 31,
1996.

                                    25
<PAGE> 28
                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
         HOLDER MATTERS

COMMON STOCK

Roosevelt's common stock is traded on the Nasdaq National Market under the
symbol "RFED".  As of December 31, 1996, there were 44,183,124 shares of
common stock issued and outstanding held by 6,469 shareholders.

The following table sets forth the high, low and closing sales prices for the
common stock as reported by the Nasdaq Stock Market, as well as the dividends
paid, for 1996 and 1995.

<TABLE>
<CAPTION>
                                                 STOCK PRICE
                                        ----------------------------
COMMON STOCK DATA                       HIGH        LOW        CLOSE     DIVIDENDS
                                        ----        ---        -----     ---------

<S>                                  <C>         <C>         <C>          <C>
1996
   First quarter                      $19.250     $17.000     $18.500      $0.155
   Second quarter                      19.750      17.875      19.250       0.155
   Third quarter                       18.875      15.625      17.125       0.155
   Fourth quarter                      21.000      16.875      21.000       0.155


1995
   First quarter                      $17.250     $14.750     $15.750      $0.140
   Second quarter                      18.625      15.750      16.688       0.140
   Third quarter                       18.875      15.250      17.625       0.140
   Fourth quarter                      19.375      15.875      19.375       0.140
</TABLE>

PAYMENT OF DIVIDENDS

Payment of future dividends is subject to a declaration by Roosevelt's Board
of Directors.  Factors considered in determining the size of dividends are
the amount and stability of profits, adequacy of capitalization, and expected
asset and liability growth of the Bank. Roosevelt's ability to pay dividends
is also limited by regulatory restrictions and the ability of the Bank and
Missouri State Bank to make capital distributions to Roosevelt. See
"Business -- Regulation -- Limitations on Dividends and Other Capital
Distributions" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

                                    26
<PAGE> 29

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
                                               ROOSEVELT FINANCIAL GROUP, INC.
                                                      FIVE-YEAR SUMMARY
                                         SELECTED CONSOLIDATED FINANCIAL INFORMATION

<CAPTION>
At or for the year ended December 31,              1996            1995             1994             1993             1992
(dollars in thousands, except per share data)  ------------    ------------     ------------     ------------     ------------

<S>                                            <C>             <C>              <C>              <C>             <C>
SUMMARY OF FINANCIAL CONDITION
 Total assets                                   $ 7,796,412     $ 9,013,061      $ 8,431,866      $ 7,595,161     $ 6,038,732
 Securities available for sale                    3,157,757       1,606,461        1,765,699        1,665,879          52,399
 Securities held to maturity                             --       3,550,140        3,276,062        2,642,916       2,219,147
 Loans                                            4,298,469       3,577,892        3,072,151        2,671,810       2,349,771
 Deposits                                         5,347,071       4,907,497        4,899,389        5,081,496       4,300,981
 Other borrowings                                 1,840,851       3,507,475        2,963,449        1,975,661       1,319,154
 Stockholders' equity                               497,427         496,906          441,626          378,462         288,545

SUMMARY OF OPERATIONS
 Total interest income                          $   640,311     $   647,795      $   533,286      $   486,940     $   439,173
 Total interest expense                             462,724         466,433          347,574          321,490         314,728
 Provision for losses on loans                        1,262           1,200           12,432              706           2,648
                                                 ----------      ----------       ----------       ----------      ----------
 Net interest income after provision
   for losses on loans                              176,325         180,162          173,280          164,744         121,797
                                                 ----------      ----------       ----------       ----------      ----------
 Retail banking fees                                 17,157          10,706            8,682            6,260           4,870
 Insurance and brokerage sales commissions            8,494           7,506            6,538            5,737           4,347
 Loan servicing fees (expenses), net                 10,982           7,401            7,359          (11,145)          8,392
 Net gain (loss) from financial instruments         (76,634)        (58,216)         (10,660)          10,646          11,394
 Unrealized losses on impairment of mortgage-
   backed securities held to maturity                    --         (27,063)              --               --              --
 Other                                                4,034           4,526            5,337            2,759           1,790
                                                 ----------      ----------       ----------       ----------      ----------
     Total noninterest income (loss)                (35,967)        (55,140)          17,256           14,257          30,793
                                                 ----------      ----------       ----------       ----------      ----------
     Total noninterest expense                      123,409          87,666          115,576           98,598         100,452
                                                 ----------      ----------       ----------       ----------      ----------
 Income before income tax expense,
   extraordinary items, and cumulative
   effect of change in accounting principles         16,949          37,356           74,960           80,403          52,138
 Income tax expense                                   5,835          10,258           25,384           27,134          17,887
 Extraordinary items, net                            (1,452)             --           (7,849)          (1,908)         (3,796)
 Cumulative effect of change in accounting
   principles                                            --              --               --           (6,489)<F1>         --
                                                 ----------      ----------       ----------       ----------      ----------
           Net income                           $     9,662     $    27,098      $    41,727      $    44,872     $    30,455
                                                 ==========      ==========       ==========       ==========      ==========
 Net income attributable to common stock        $     5,452     $    22,855      $    36,543      $    41,057     $    28,866
                                                 ==========      ==========       ==========       ==========      ==========

PER SHARE DATA:
 Primary earnings per share:
   Income before extraordinary items and
    cumulative effect of change in
    accounting principle                        $      0.16     $      0.56      $      1.17      $      1.54     $      1.09
   Extraordinary items                                (0.03)             --            (0.21)           (0.06)          (0.13)
   Cumulative effect of change
    in accounting principle                              --              --               --            (0.20)             --
                                                 ----------      ----------       ----------       ----------      ----------
      Net income                                $      0.13     $      0.56      $      0.96      $      1.28     $      0.96
                                                 ==========      ==========       ==========       ==========      ==========
 Fully-diluted earnings per share:
   Income before extraordinary items and
    cumulative effect of change
    in accounting principle                     $      0.16     $      0.56      $      1.15      $      1.32     $      0.99
   Extraordinary items                                (0.03)             --            (0.21)           (0.05)          (0.11)
   Cumulative effect of change in
    accounting principle                                 --              --               --            (0.16)             --
                                                 ----------      ----------       ----------       ----------      ----------
      Net income                                $      0.13     $      0.56      $      0.94      $      1.11     $      0.88
                                                 ==========      ==========       ==========       ==========      ==========


                                    27
<PAGE> 30

ITEM 6.  SELECTED FINANCIAL DATA, CONTINUED

<CAPTION>
                                               ROOSEVELT FINANCIAL GROUP, INC.
                                                      FIVE-YEAR SUMMARY
                                         SELECTED CONSOLIDATED FINANCIAL INFORMATION

<S>                                            <C>             <C>              <C>              <C>             <C>
 Other Data:
 Ratio of net interest income to general
   and administrative expense                      1.44x<F4>        2.07x<F3>       1.67x<F2>        1.82x           1.55x
 Effective net spread during the period            2.02%            2.06%           2.29%            2.40%           2.32%
 Nonperforming assets to total assets,
   end of period                                   0.99             0.90            0.41             0.46            0.78
 Return on assets (ratio of net income to
   average total assets)                           0.11<F4>         0.30<F3>        0.49<F2>         0.61            0.54
 Return on equity (ratio of net income to
   average stockholders' equity)                   1.87<F4>         5.97<F3>       10.30<F2>        12.86           11.11
 Equity-to-assets ratio (ratio of average
   stockholders' equity to average total
   assets)                                         5.61             4.97            4.80             4.75            4.84
 Cash dividends per share of common stock       $  0.62         $   0.56         $  0.43          $  0.31         $  0.21
 Dividends on common stock payout ratio
   (dividends paid per share of common stock
   divided by primary net income per share)      476.92%<F4>      100.00%<F3>      44.79%<F2>       18.72%          18.63%
 Book value per share, end of year              $ 10.15         $  10.60         $  9.79          $  9.18         $  9.29

<FN>
<F1> During December, 1993, Roosevelt adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities," on a prospective basis.  As a result,
Roosevelt recorded a $6.5 million charge, net of applicable income taxes, as
a cumulative effect of a change in accounting principle to reflect an other
than temporary impairment of certain interest-only stripped coupon
mortgage-backed pass-through certificates and collateralized mortgage
obligation residual interests.

<F2> Includes a $57.3 million net expense(net of income tax benefit) of
merger-related expenses as a result of the acquisition of Farm & Home.  Such
merger-related expenses included $11.4 million in provision for losses on
loans, $38.4 million of net loss from financial instruments, $3.7 million in
provision for real estate losses, $6.3 million in compensation and employee
benefits, occupancy expense of $5.9 million, transaction related fees of $7.0
million, and $1.8 million of other expenses.  This amount was reduced by the
income tax effect of $25.0 million.  An extraordinary item totaling $7.8
million was recorded related to the early extinguishment of debt. Also
included are gains resulting from the mark to market of the Company's
financial futures positions used to reduce the interest rate risk of certain
mortgage-backed securities in the available for sale portfolio totaling $39.5
million ($25.1 million, net of income taxes).  Not including the
aforementioned charges and gains for 1994, the ratio of net interest income
to general and administrative expense would have been 2.08x, return on assets
would have been 0.96%, return on equity would have been 20.01%, and the
dividend on common stock payout ratio would have been 18.40%.

<F3> Such ratios for 1995 include the impact of the impairment charge related
to certain mortgage-backed securities of $27.1 million, losses resulting from
the mark to market of the Company's financial futures positions used to
reduce the interest rate risk of certain mortgage-backed securities in the
available for sale portfolio totaling $71.0 million and merger related
expenses of $1.6 million.  If such expenses (net of income tax benefit) were
not included, the ratio of net interest income to general and administrative
expense would have been 2.11x, return on assets would have been 0.95%, return
on equity would have been 18.96% and the dividend on common stock payout
ratio would have been 27.59%.

<F4> Such ratios for 1996 include the impact of the one-time SAIF assessment
of $27.4 million, the extraordinary items related to the early extinguishment
of debt of $1.5 million and the recognition of previously deferred expense
related to the termination of interest rate exchange agreements of $80.5
million. If such expenses (net of tax benefit) were not included, the ratio
of net interest income to general and administrative expense would have been
1.85x, return on assets would have been 0.88%, return on equity would have
been 15.75% and the dividend on common stock payout ratio would have been
34.4%.
</TABLE>



                                    28
<PAGE> 31


Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

GENERAL

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and notes thereto, and with reference to
the discussion of the operations and other financial information presented
elsewhere in this report.


RESULTS OF OPERATIONS

Roosevelt's operating results depend primarily upon its net interest income,
which is the difference between the interest income earned on its interest
earning assets (loans, mortgage-backed securities and investment securities)
and the interest expense paid on its interest bearing liabilities (deposits
and borrowings).  Operating results are also significantly affected by
provisions for losses on loans, noninterest income and noninterest expense.
Each of these factors is significantly affected not only by Roosevelt's
operating strategies, but, to varying degrees, by general economic and
competitive conditions and by policies of federal regulatory authorities.

Two of Roosevelt's operating strategies impacted net income in each of the
three years ended December 31, 1996.  The first of these strategies was
growth through acquisition.  In 1994 the Company acquired Farm and Home
Financial Corporation and Home Federal Bancorp of Missouri increasing its
assets by $3.7 billion.  These acquisitions, which were preceded by seven
others in the four years preceding 1994 and followed by a total of five
smaller acquisitions in 1995 and 1996, dramatically increased Roosevelt's
retail customer base and provided opportunities to improve its physical plant
and technology platforms necessary to maintain and grow a retail customer
base.  The second strategy impacting operating results was internal growth
via development of a diversified, retail-based operation.  Actions taken to
achieve this latter strategy primarily affected operating results in 1996 and
included the sale of marginally profitable assets, the repayment of higher
cost wholesale liabilities and the removal of derivative positions which had
been designated as synthetic alterations of some of the assets sold or the
liabilities repaid.

Roosevelt reported net income of $9.7 million for 1996 compared with $27.1
million for 1995 and $41.7 million for 1994. Net income on a fully diluted
per share basis was $0.13 for 1996 compared with $0.56 for 1995 and $0.94 for
1994.  Net income in 1996 was adversely impacted by a $27.4 million pre-tax
charge imposed by the Federal Deposit Insurance Corporation (FDIC) in order
to recapitalize the Savings Association Insurance Fund; an $80.5 million
pre-tax charge related to the termination of interest rate exchange
agreements which had been designated as synthetic alterations of short-term
wholesale borrowings that were repaid during the year; and a $1.5 million
after-tax charge related to the extinguishment of the Company's
long-term debt. Net income in 1995 was adversely impacted by pre-tax charges
of $71.0 million and $27.1 million resulting from marking to market the
Company's financial futures positions used to reduce the interest rate risk
of certain mortgage-backed securities in the available for sale portfolio
and for unrealized losses on the impairment of mortgage-backed securities,
respectively, and by an after-tax charge of approximately $1.6 million for
merger expenses related to the acquisition of WSB Bancorp, Inc. and
Kirksville Bancshares, Inc.  For a further discussion of expenses related to
the termination of interest rate exchange agreements and financial futures,
see "Results of Operations--Net Gain (Loss) from Financial Instruments" and
Note 15 of the Notes to Consolidated Financial Statements.

Net income for 1994 was impacted by merger related expenses related to the
acquisition of Farm & Home Financial Corporation (Farm & Home).  The
components of the merger related expenses (in millions) are as follows:

<TABLE>
<S>                                                 <C>
       Provision for losses on loans                  $ 11.4
       Net loss from financial instruments              38.4
       Provision for real estate losses                  3.7
       Compensation and employee benefits                6.3
       Occupancy                                         5.9
       Transaction related fees                          7.0
       Other                                             1.8
                                                      ------
         Income before income tax expense
          and extraordinary item                        74.5
       Income tax expense                               25.0
                                                      ------
         Income before extraordinary item               49.5
       Extraordinary item (net of tax effect)            7.8
                                                      ------
         Total                                        $ 57.3
                                                      ======
</TABLE>


                                    29
<PAGE> 32

In connection with the acquisition of Farm & Home and a review of the
combined loan portfolio, including the increased concentration of loans in
various geographic areas, and after discussion with the OTS regarding the
level of the allowance for loan losses as compared to a new peer group as a
result of the dramatic increase in size, management recorded an $11.4 million
addition to the allowance.  Net loss from financial instruments totaled $38.4
million and included $25.6 million in loss from the sale of Farm & Home
fixed-rate mortgage-backed securities that did not meet Roosevelt's
asset/liability management objectives.  In addition, $8.9 million of the loss
on financial instruments resulted from the cancellation of interest rate
exchange agreements of Farm & Home.  As a result of Roosevelt's desire to
accelerate the disposition of Farm & Home's real estate owned portfolio,
Roosevelt increased its estimate of reserves required to record its real
estate owned portfolio at its estimated fair value which resulted in the
additional $3.7 million provision.  Compensation and employee benefits
expense totaling $6.3 million related to the severance benefits for the Farm
& Home executives and the Missouri and Texas employees whose employment did
not continue with the combined entity after June 30, 1994.  Occupancy expense
totaled $5.9 million and was comprised of losses on the termination of 11
facility leases, including the write-off of leasehold improvements associated
with the leases, and anticipated losses on the sale of two closed branch
facilities.  Transaction related fees totaled $7.0 million and included
advisory, legal, and accounting fees.  Other expenses totaled $1.8 million
and related to other miscellaneous costs such as printing, travel and
lodging.  The extraordinary item related to early extinguishment of debt and
totaled $7.8 million, net of applicable income taxes.  Roosevelt recorded a
$4.6 million loss due to the retirement of $60.9 million of 10.125%
mortgage-backed bonds.  A loss of $2.6 million was recorded as a result of
the redemption of Farm & Home's 13.0% debentures.  Additionally, a loss of
$637,000 was recorded as a result of the prepayment of $101.0 million of
Federal Home Loan Bank (FHLB) of Des Moines advances.


NET INTEREST INCOME
Net interest income in 1996 was $177.6 million, a decline of $3.8 million or
2.1% from the $181.4 million recorded in 1995.  A change in the composition
of interest-bearing assets and liabilities, a decline in overall interest
rates earned and paid and small decreases in the average balances of
interest-bearing assets and liabilities all contributed to the decline in net
interest income.  Consistent with its strategy to develop its retail
businesses, the Company grew its higher yielding loan portfolios and its
lower costing deposit balances while at the same time shrinking its lower
yielding investment portfolios and higher costing wholesale borrowings.
These actions contributed to an increase in net interest income due to volume
changes of $6.5 million.  However, this favorable impact was more than offset
by a $10.3 million decrease in net interest income resulting from a net
decline in yield earned on assets of 5 basis points partially offset by a 3
basis points decline in the cost of all interest bearing liabilities.  While
the overall decline in interest rates proved beneficial for gross
interest-bearing liabilities it increased the cost of interest rate exchange
agreements which had been utilized by the Company, prior to the cancellation
on September 30, 1996, to manage its interest rate risk.  Under the terms of
these agreements, the Company generally paid a fixed rate of interest and
received a variable rate.  The lower interest rates resulted in an increased
cost in 1996.  Ignoring the impact of the interest rate exchange agreements,
the Company's cost of funds would have declined 15 basis points from 1995.
As a result of the above items, the effective net interest rate spread
decreased 4 basis points from 2.06% in 1995 to 2.02% in 1996.

Net interest income of $181.4 million for 1995 was down 2.3% from $185.7
million for 1994.  The decrease in net interest income was primarily the
result of the average interest rates paid on interest bearing liabilities
increasing more than the average interest rates earned on interest earning
assets.  The average rate earned on interest earning assets increased 77
basis points from 6.58% for 1994 to 7.35% for 1995.  The average rate paid on
interest bearing liabilities increased 107 basis points from 4.41% for 1994
to 5.48% for 1995.  The effective net interest rate spread decreased 23 basis
points from 2.29% for 1994 to 2.06% for 1995, primarily as a result of severe
retail deposit pricing pressure (unrelated to the outright level of interest
rates) in the Company's market areas during 1995.  The decrease in net
interest income due to the decreasing average spread was partially offset by
a growth in interest earning assets and interest bearing liabilities.  The
average balance of interest earning assets and interest bearing liabilities
increased 8.8% and 8.1%, respectively, during 1995 as compared to 1994.


                                    30
<PAGE> 33

The following table presents Roosevelt's average consolidated balance sheets
and reflects the average yield on assets and the average cost of liabilities
for the periods indicated.  Average rates earned and paid are derived by
dividing income or expense by the average balance of assets and liabilities,
respectively.

<TABLE>
<CAPTION>
                                                                             Year Ending December 31,
                                         -------------------------------------------------------------------------------------------
                                                      1996                            1995                           1994
                                         ----------------------------    ----------------------------   ---------------------------
                                                    Interest                        Interest                       Interest
                                         Average    Income/   Average    Average    Income/   Average   Average    Income/  Average
                                         Balance    Expense   Rate %     Balance    Expense   Rate %    Balance    Expense  Rate %
                                         -------    -------   ------     -------    -------   ------    -------    -------  ------
                                                                    (dollars in millions)

<S>                                     <C>         <C>         <C>     <C>         <C>        <C>     <C>         <C>      <C>
Assets
 Cash equivalents                       $    35.1   $   1.8     5.15%   $    18.2   $   1.0    5.49%   $    62.8   $   2.4    3.82%
 Securities held for trading                   --        --       --           --        --      --        120.6       6.5    5.39
 Securities available for sale <F1>       1,516.6     109.8     7.24      1,815.2     135.4    7.46      2,035.1     137.9    6.78
 Securities held to maturity              3,191.5     225.4     7.06      3,683.1     259.3    7.04      2,939.5     179.1    6.09
 Securities purchased under agreement
  to resell                                    --        --       --           --        --      --         21.7       0.9    4.15
 Loans <F2> <F3>                          4,029.0     303.3     7.53      3,301.8     252.1    7.64      2,922.9     206.5    7.06
                                          -------     -----               -------     -----              -------     -----
      Total interest-earning assets       8,772.2     640.3     7.30%     8,818.3     647.8    7.35%     8,102.6     533.3    6.58%
                                                      -----     ----                  -----    ----                  -----    ----
Other assets                                417.0                           327.2                          322.2
                                          -------                         -------                        -------
                                        $ 9,189.2                       $ 9,145.5                      $ 8,424.8
                                          =======                         =======                        =======

Liabilities
  Deposits:
    NOW and money market accounts       $ 1,014.2      30.5     3.01%   $   835.8      22.7    2.73%   $ 1,049.2      23.7    2.26%
    Passbook savings deposits               304.7       7.0     2.31        350.5       8.1    2.31        411.2       9.8    2.38
    Time deposits                         3,690.4     212.3     5.75      3,615.7     203.0    5.61      3,552.6     166.7    4.69
                                          -------     -----               -------     -----              -------     -----
                                          5,009.3     249.8     4.99      4,802.0     233.8    4.87      5,013.0     200.2    3.99

  Borrowings:
    Securities sold under agreements
      to repurchase <F4>                    857.9      54.8     6.39      1,426.1      89.6    6.29      1,193.7      58.0    4.86
    Advances from FHLB <F4>               2,598.5     155.0     5.96      2,236.9     138.1    6.17      1,579.1      79.6    5.04
    Other borrowings                         29.7       3.1    10.26         47.4       4.9   10.34         90.5       9.8   10.83
                                          -------     -----               -------     -----              -------     -----
       Total interest-bearing
         liabilities                      8,495.4     462.7     5.45%     8,512.4     466.4    5.48%     7,876.3     347.6    4.41%
                                                      -----     ----                  -----    ----                  -----    ----
Other liabilities                           178.2                           178.9                          143.8
                                          -------                         -------                        -------
                                          8,673.6                         8,691.3                        8,020.1
Stockholders' equity                        515.6                           454.2                          404.7
                                          -------                         -------                        -------
    Total liabilities and stockholders'
      equity                            $ 9,189.2                       $ 9,145.5                      $ 8,424.8
                                          =======                         =======                        =======
Net interest income                                 $ 177.6                         $ 181.4                        $ 185.7
                                                      =====                           =====                          =====

Interest rate spread <F5>                                       1.85%                          1.87%                          2.17%
                                                                ====                           ====                           ====
Effective net spread <F6>                                       2.02%                          2.06%                          2.29%
                                                                ====                           ====                           ====
<FN>
<F1> The securities available for sale are included in the following table at
     historical cost with the corresponding average rate calculated based upon
     historical balances.
<F2> Average balances include non accrual loans.  Interest on such loans is
     included in interest income upon receipt.
<F3> Interest includes amortization of deferred loan fees.
<F4> Includes the effect of interest rate exchange agreements.
<F5> Equals average rate earned on all assets minus average rate paid on all
     liabilities.
<F6> Net interest income divided by average balance of all interest earning
     assets.
</TABLE>

At December 31, 1996, the weighted average yield on interest-earning assets
was 7.48% and the weighted average cost on interest-bearing liabilities was
5.14%.


                                    31
<PAGE> 34

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

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                      ----------------------------------------------------------------------
                                                 1996 v. 1995                       1995 v. 1994
                                      ---------------------------------  -----------------------------------
                                              INCREASE                           INCREASE
                                             (DECREASE)                         (DECREASE)
                                               DUE TO          TOTAL              DUE TO            TOTAL
                                      ----------------------  INCREASE   -----------------------   INCREASE
                                        VOLUME        RATE   (DECREASE)    VOLUME         RATE    (DECREASE)
                                      ----------    -------- ----------  ----------     --------  ----------
                                                             (IN THOUSANDS)
<S>                                   <C>         <C>        <C>         <C>          <C>         <C>
Interest income:
 Loans                                $  55,518   $  (4,285) $  51,233   $  26,763    $  18,841   $  45,604
 Securities available for sale          (22,663)     (2,997)   (25,660)    (15,584)      13,095      (2,489)
 Securities held to maturity            (34,579)        732    (33,847)     45,560       34,534      80,094
 Securities held for trading                 --          --         --      (6,460)          --      (6,460)
 Securities purchased under
  agreements to resell                       --          --         --        (887)          --        (887)
 Other earning assets                       944        (154)       790      (1,792)         439      (1,353)
                                        -------     -------    -------     -------      -------     -------
   Total interest income              $    (780)  $  (6,704) $  (7,484)  $  47,600    $  66,909   $ 114,509
                                        -------     -------    -------     -------      -------     -------
Interest expense:
 Deposits                             $  10,097   $   5,887  $  15,984   $  (8,427)   $  42,073   $  33,646
 Securities sold under
  agreements to repurchase              (33,687)     (3,730)   (37,417)     10,378       20,876      31,254
 Advances from
  Federal Home Loan Bank                 21,677     (11,661)    10,016      31,582       26,685      58,267
 Other borrowings                        (1,837)         --     (1,837)     (4,602)        (326)     (4,928)
 Interest rate exchange agreements       (3,539)     13,084      9,545      (1,015)       1,635         620
                                        -------     -------    -------     -------      -------     -------
   Total interest expense                (7,289)      3,580     (3,709)     27,916       90,943     118,859
                                        -------     -------    -------     -------      -------     -------
Change in net interest income         $   6,509   $ (10,284) $  (3,775)  $  19,684    $ (24,034)  $  (4,350)
                                        =======     =======    =======     =======      =======     =======
</TABLE>


                                    32
<PAGE> 35

PROVISION FOR LOSSES ON LOANS
The provision for losses on loans charged to earnings is based upon
management's judgement of the amount necessary to maintain the allowance for
loan losses at a level adequate to absorb probable losses.  As part of the
process for determining the adequacy of the allowance for loan losses,
management performs quarterly detailed reviews to identify risks inherent in
the loan portfolio and to assess the overall quality of the portfolio as well
as to determine the amounts of allowances and provisions to be reported.

The provision for loan losses was $1.3 million for 1996, $1.2 million for
1995 and $12.4 million for 1994.  During the three month period ended June
30, 1994,Roosevelt recorded an $11.4 million increase in the provision for
losses on loans.  After combining the Roosevelt, Farm & Home and Home Federal
loan portfolios which resulted in a combined portfolio approximately five
times the size of Roosevelt's March 31, 1994 portfolio (approximately $650
million to $3.0 billion), management determined it was necessary to
substantially increase the allowance for loan losses to achieve higher and
more conservative coverage levels.  Factors considered by management in
determining the necessity and amount of the provision necessary to bring the
overall allowance to the desired level were i) the need to conform Farm &
Home's coverage ratio (ratio of allowance for loan losses to total gross
loans) of .24% at December 31, 1993 to that of Roosevelt's which was .61% at
the comparable date, ii) the previously discussed five fold increase in the
size of the overall loan portfolio coupled with the fact that, at the time,
Roosevelt management had no previous track record of managing a portfolio
that size and iii) the Farm & Home and Home Federal mergers effectively
doubled the overall size of the entity resulting in Roosevelt moving up to a
new peer group whose average allowance for loan losses as a percentage of
total loans far exceeded the allowances of the unadjusted combined entity.
Also, since just prior to the merger, both Farm & Home and Roosevelt had
recently been through examinations by the OTS, Roosevelt initiated
conversations with the OTS to obtain their concurrence with the planned
addition to the allowance for loan losses.  Such concurrence was received and
the resulting $11.4 million provision was recorded.

The provisions for 1996 and 1995 reflect a more normalized level of provision
compared to the large 1994 provision discussed above.  The 1996 and 1995
provisions reflect the Company's strong level of reserves and overall strong
asset quality.  See the caption entitled "Asset Quality" under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

NONINTEREST INCOME (LOSS)
Noninterest income (loss) was $(36.0) million for 1996 as compared to $(55.1)
million for 1995 and $17.3 million for 1994.  The following is a discussion
of the major components of noninterest income (loss):

Retail Banking Fees - Retail banking fees are comprised of service charges
related to deposit accounts, fees for money orders, travelers checks, etc.
and fees related to the telephone bill paying service offered to the Bank's
depositors.  Retail banking fees increased $6.5 million, or 60.3% from $10.7
million for 1995 to $17.2 million for 1996.  Retail banking fees increased
$2.0 million, or 23.3% from $8.7 million for 1994 to $10.7 million for 1995.
Growth in both years is a result of the Company's successful efforts to
develop and grow its retail based operations which resulted in an overall
increase in utilization of these services offered by the Bank.

Insurance and Brokerage Sales Commissions - The Company offers a broad range
of insurance and investment products, including tax deferred annuities and
mutual fund products, to the general public and its customers through
Roosevelt Financial Services, Inc.  Insurance and brokerage sales commissions
increased $988,000, or 13.1% from $7.5 million in 1995 to $8.5 million for
1996.  This followed an increase of $968,000, or 14.8% from $6.5 million for
1994 to $7.5 million for 1995. The positive trend in insurance and brokerage
sales commissions is primarily the result of an increase in the sales volume
of commission generating products as the Company successfully increases its
penetration of its existing customer base as well as attracts new customers.

Loan Servicing Fees (Expenses), Net - Loan servicing fees, which primarily
consists of loan servicing revenue, net of the amortization of purchased
mortgage servicing rights, increased $3.6 million, or 48.4% from $7.4 million
for 1995 to $11.0 million for 1996. This increase is due primarily to several
purchases of loan servicing rights in 1996 that totaled $41.9 million
which represented $3.5 billion in unpaid principal balances.  Loan
servicing fees in 1995 increased $1.5 million, or 21.1% from $7.4 million
recorded in 1994 primarily as a result of a $1.5 million gain realized
upon the sale of $3.3 million book value of purchased mortgage servicing
rights.  The amortization of purchased mortgage servicing rights totaled
$6.6 million, $4.2 million and $5.6 million for 1996, 1995 and 1994,
respectively.  During 1995, the balance of mortgage loans serviced by
Roosevelt for others decreased from approximately $2.8 billion at December
31, 1994 to $2.0 billion at December 31, 1995.  This decrease resulted
from the normal amortization of the principal balance of mortgage loans
outstanding and the sale of purchased mortgage servicing rights discussed
previously.

                                    33
<PAGE> 36

Net Gain (Loss) from Financial Instruments - In the conduct of its business
operations, Roosevelt has determined the need to sell or terminate certain
assets, liabilities or off-balance sheet positions due to various unforeseen
events.  Fundamental to the conduct of such sale or termination activities is
the effect such transactions will have on the future volatility of the
Company's net market value.  Consequently, in pursuing such sale or
termination activities, Roosevelt does not seek net gains in a reporting
period to the detriment of earnings in future periods.  Following is a
discussion of the assets, liabilities and off-balance sheet items that were
sold and/or terminated during 1996, 1995 and 1994.

Net gain (loss) from financial instruments is as follows:

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                           -------------------------------------------------
                                                              1996               1995                1994
                                                           ----------        -----------          ----------
                                                                             (in thousands)

<S>                                                        <C>               <C>                  <C>
Mortgage-backed securities held to maturity                $      --         $       --           $    (231)
Investment securities held to maturity                            --                 --                 209
Mortgage-backed securities held for trading                       --                 --              (4,545)
Mark to market of financial futures contracts                     --            (71,022)             39,508
Mortgage-backed securities available for sale                  8,466             23,885             (28,208)
Investment securities available for sale                         719                 --                (115)
Cancellation cost of interest rate exchange, cap
  and floor agreements (See Note 15)                         (70,711)                --              (8,910)
Options expense                                              (15,108)           (11,079)             (8,368)
                                                            --------          ---------            --------
                                                           $ (76,634)        $  (58,216)          $ (10,660)
                                                            ========          =========            ========
</TABLE>

The net loss from financial instruments increased $18.4 million in
1996 as compared to 1995. In 1996, the Company ceased using financial
futures contracts as a means of reducing the interest rate risk of
certain mortgage-backed securities in its available for sale portfolio.
Hence, no amount of mark to market gains or losses were realized in
1996. As part of its retail transition strategy, the Company sold in
1996 those securities which were determined to be marginally profitable.
This, and prevailing market conditions, contributed to the decline in net
gains on sales of mortgage-backed and investment securities. As discussed
more fully in the following paragraphs the Company terminated all of its
interest rate exchange agreements in 1996. Options expense increased in
1996 primarily as a result of the purchase of new interest rate cap agreements
to reduce the interest rate risk of adjustable rate mortgage-backed
securities. The principal causes of the $47.6 million increase in net
loss between 1995 and 1994 include: a $110.5 million decline in the
market value of financial futures contracts; a $52.2 million increase
in net gains on sales of mortgage-backed and investment securities
resulting from favorable option-adjusted spread differentials in the
market place at the dates of their respective sales; and a decline in
cancellation costs of interest rate exchange agreements. The $8.9 million
cancellation cost realized in 1994 related to the Company's acquisition
of Farm and Home Savings as previously discussed.

As a result of its continuing transition to a more retail-oriented
institution, the Company was able to substantially reduce in 1996,
principally during the third and fourth quarters, its need for derivative
financial instruments in managing its interest rate risk.

Accordingly, the Company terminated all of its interest rate exchange
agreements, $970 million notional amount of its interest rate floor
agreements and $500 million notional amount of its interest rate cap
agreements.  The terminations of the interest rate exchange agreements were
accounted for in accordance with the provisions of Emerging Issues Task Force
Issue 84-7 (EITF 84-7) which requires that gains or losses on the termination
of such agreements be recognized when the offsetting gain or loss is
recognized on the designated asset or liability.  That is, to the extent that
the designated assets or liabilities still exist, any gain or loss on the
termination of the agreement designated as a synthetic alteration would be
deferred and amortized over the shorter term of the remaining contractual
life of the agreement or the remaining life of the asset or liability.

During the third quarter 1996, interest rate exchange agreements designated
against available for sale fixed rate mortgage-backed securities were
cancelled resulting in a $16.1 million gain which was recognized as the above
mentioned assets against which the agreements had been designated were
concurrently sold.

The remaining interest rate exchange agreements designated against short-term
wholesale borrowings were also cancelled at a cost of $68.0 million which
costs were deferred to be amortized because the underlying liabilities
against which the agreements had been designated still existed at
September 30, 1996. Efforts to further the previously discussed retail
transition continued in the fourth quarter of 1996 and resulted in
shrinkage in the Company's total assets by $1.3 billion.  This shrinkage
resulted primarily from the sale of investment and mortgage-backed
securities with the proceeds being utilized to further reduce short-term
wholesale borrowings.  Further, the Company completed two acquisitions of
thrifts during October of 1996 which further reduced such borrowings by
replacing them as a funding source with the acquired retail deposits.
Upon repayment of  the designated short-term wholesale borrowings, all
existing net deferred swap cancellation costs and certain other deferred
gains and losses related to previously terminated interest rate cap and
floor agreements in total amounting to $80.5 million were recognized
during the fourth quarter of 1996.

The terminations of the $970 million notional amount interest rate floor and
$500 million notional amount cap agreements were accounted for in accordance
with the provisions of Issue 8A of the American Institute of Certified Public
Accountants Issues Paper "Accounting for Options" (Issues Paper).  In
accordance with the conclusions expressed in the Issues Paper, the excess of
the unamortized time value of the options (the premium) over the amount of
cash received upon termination amounting to $6.4 million was recognized in
earnings when the options were terminated.

During August 1996, the Staff of the Securities and Exchange Commission
(Staff) performed a regular review of the Company's 1995 Form 10-K in
conjuction with Registration Statements on Form S-4 filed by the Company
related to three then-pending acquisitions.

As a result of this review, the Staff questioned the Company's original
accounting treatment surrounding the deferral and recognition of gains and
losses on financial futures contracts used to reduce the interest rate risk
of certain mortgage backed

                                    34
<PAGE> 37
securities in the Company's available for sale portfolio.  The Company
originally recognized a $34.8 million charge to fourth quarter 1995 earnings
regarding the cessation of deferral accounting.

At issue was the Staff's contention that the financial futures contracts did
not meet the "high correlation" criteria of Statement of Financial Accounting
Standards No. 80 "Accounting for Futures Contracts", thus not qualifying for
deferral accounting from the inception of the hedge in March 1994 and
requiring the recognition of subsequent gains and losses in income.  The
Company originally ceased deferral accounting when management concluded that
high correlation measured using the "cumulative dollar approach" was unlikely
to be achieved on a consistent basis.

Accordingly, at the Staff's request, the Company in 1996 restated its 1994
and 1995 consolidated financial statements to reflect the cessation of
deferral accounting, from the inception of the hedge, with respect to the
aforementioned financial futures contracts.  The restatement had the effect
of increasing previously reported 1994 net income and decreasing previously
reported 1995 net income by $18.0 million (on a fully-diluted per share
basis, an increase of $0.48 for 1994 and a decrease of $0.43 for 1995).  This
restatement was one of the timing of recognition of gains and losses in the
Statement of Operations and had no impact on total stockholders' equity at
any date since both the financial futures contracts and the related
mortgage-backed securities have been previously marked to market through
stockholders' equity at each reporting period.

Subsequent to December 31, 1995, the Company terminated all of its financial
futures positions and maintained its interest rate risk management position
by principally redesignating existing interest rate exchange agreements to
the available for sale portfolio.  Such interest rate exchange agreements
were utilized prior to the redesignation to manage the interest rate risk of
short-term wholesale borrowings.

In connection with its acquisition of Farm and Home in 1994, the Company sold
securities, primarily mortgage-backed securities, repaid portions of Farm and
Home's debt and terminated various interest rate exchange agreements all as
part of its efforts to rebalance its asset/liability mix following the
acquisition.  These actions, and a net improvement in the fair value of
financial futures all contributed to the $10.7 million net loss from
financial instruments in 1994.

Options expense is comprised of amortization of the premiums paid for various
interest rate cap, floor and collar agreements.  The increase in options
expense from 1995 to 1996 and 1994 to 1995 is primarily attributable to
increased notional amounts of interest cap agreements necessitated by the
generation of larger balances of adjustable rate assets in need of interest
rate cap protection.

Unrealized Losses on Impairment of Mortgage-backed Securities - The Company
purchased ownership interests in ten pools of privately issued
adjustable-rate mortgage-backed securities issued in 1989 through 1991 by
Guardian Savings and Loan Association (Guardian).  All of such Guardian
pools in which the Company purchased and currently holds an ownership
interest were rated AA  or AAA by Standard & Poors and Aa2 or Aaa by Moodys,
at the date of issuance of the securities.

Guardian issued its securities with several classes available for purchase.
Certain classes are subordinate to the position of senior classes in that
such subordinate classes absorb all credit losses and must be completely
eliminated before any losses flow to senior position holders.  The Guardian
securities purchased by the Company (the Guardian Securities) were
purchases of the most senior positions, thus intended to be protected by the
subordination credit enhancement feature.

Guardian was placed in conservatorship on June 21, 1991 by the Office of
Thrift Supervision, which appointed the Resolution Trust Corporation (RTC) as
conservator.  Subsequent to the conservatorship, the RTC replaced Guardian as
the servicer for the loans underlying the securities.  Effective November
1994, Bank of America assumed servicing responsibilities from the RTC.
Guardian was a niche player in the California mortgage market whose lending
decisions relied more on the value of the mortgaged property and the
borrower's equity in the property and less on the borrower's income and
credit standing.  All collateral underlying the Guardian Securities have the
following loan pool characteristics:

      * First lien, 30-year, six-month adjustable-rate loans tied to either
        the cost of funds index, one-year constant maturity treasury rate,
        or LIBOR.

      * 100% of the loans were originated in California.

      * The weighted average loan-to-value ratio at origination was
        approximately 66%.

Beginning in mid-1993 and continuing currently, the loan pools backing the
securities have been affected by high delinquency and foreclosure rates, and
higher than anticipated losses on the ultimate disposition of real estate
acquired through foreclosure (REO).  This has resulted in rating agency
downgrades, principally in April and May, 1994 and again in 1995 and 1996 to
the current ratings reflected in the tables on page 38 and substantial
deterioration in the amount of the loss absorption capacity provided by the
subordinated classes.

                                    35
<PAGE> 38

At December 31, 1994 and March 31, 1995, the Guardian securities owned by the
Company were performing according to their contractual terms, and all
realized losses from the disposition of REO were being absorbed by the
subordinate classes (or in the case of Pool 1990-7 at March 31, 1995, by
unamortized purchase discounts).  However, to the extent that subsequent to
March 31, 1995, the pools continue to realize losses on the disposition of
REO at levels comparable to the then current rate, the remaining balances of
the subordinate classes may not be adequate to protect the Company from
incurring some credit losses on certain of its ten pools.  As a result of
this deterioration and the continuing receipt of subsequent information, the
Company has determined that the underlying investments represented by seven
pools in which, subsequent to March 31, 1995, the subordination protection
has been either totally eliminated or has become potentially inadequate
should be considered "other than temporarily" impaired under the provisions
of Statement of Financial Accounting Standards No. 115.  As a result of this
determination, the Company recorded a $22.0 million pre-tax write-down ($14.4
million after tax or approximately $0.32 per share) for the three months
ended March 31, 1995 to reflect the impairment of these seven pools.  The
amount of the write-down was based on discounted cash flow analyses performed
by management (based upon assumptions regarding delinquency levels,
foreclosure rates and loss ratios on REO disposition in the underlying
portfolio).  Discounted cash flow analyses were utilized to estimate fair
value due to the absence of a ready market for the Guardian Securities.

In addition to the Guardian Securities discussed above, the Company has an
investment of approximately $4.5 million at December 31, 1996 after the
write-down discussed below, in another private issuer mortgage-backed
security, LB Multifamily Mortgage Trust Series 1991-4 (Lehman 91-4),
possessing similar performance characteristics to the Guardian Securities
that has also been determined to be other than temporarily impaired.
Accordingly, the Company has recorded a $5.1 million pre-tax write-down ($3.4
million after tax or approximately $0.08 per share) to reflect the impairment
of this security at March 31, 1995.

Management believes that these write-downs are adequate based upon its
evaluation.

As reflected in the following table, the Company's remaining investment at
December 31, 1996 in the Guardian Securities is approximately $55.3 million,
after the desecuritization of Guardian Pool 1990-9 discussed below:
<TABLE>
<CAPTION>
                                                                              (in millions)
<S>                                                                             <C>
        Investment in Guardian Securities, March 31, 1995                        $ 118.9

        Purchase of remaining senior position of Pool 1990-9                          .6
        Net principal payments received                                            (30.6)
        Desecuritization of Guardian Pool 1990-9 (see discussion below)            (33.6)
                                                                                  ------

        Investment in Guardian Securities, December 31, 1996                     $  55.3
                                                                                  ======
</TABLE>

Subsequent to March 31, 1995, the date of the impairment charge, through
December 31, 1996 the following events have occurred with respect to the
Guardian Securities and Lehman 91-4.

      *     During the quarter ended June 30, 1995, the Company completed its
            planned desecuritization of Guardian Pool 1990-9 and has assumed
            servicing of the underlying whole loans and REO properties
            received through the desecuritization.  As a result of this
            process, $1.1 million representing principal, interest and
            servicing related funds advanced by previous servicers to
            certificate holders on properties which were in REO at the time
            of the desecuritization was reimbursed to the servicer, $28.8
            million was transferred to mortgage loans and $2.7 million (net
            of $4.9 million of charge-offs discussed below) was transferred
            to residential REO.  REO properties and properties in
            foreclosure were written down $4.9 million to their estimated
            fair values by charges to existing unallocated REO reserves
            ($1.4 million) and loan loss reserves ($1.8 million) and to
            existing unamortized purchase discounts ($1.7 million).

      *     As expected, there were several additional rating agency
            downgrades, principally related to those Guardian pools that
            are no longer protected by remaining credit enhancement and
            which had been determined to be other than temporarily impaired
            and written down to estimated fair value by the Company during
            the quarter ended March 31, 1995.

      *     As expected, based on the low levels remaining at March 31, 1995,
            the subordination protection related to Guardian Pools 1990-1,
            1990-2, 1990-4, 1990-5, 1990-7, 1990-8 and Lehman 1991-4 was
            fully absorbed.

      *     The remaining pool Guardian 89-11, determined at March 31, 1995 to
            be other than temporarily impaired and written down to estimated
            fair value, continues to perform according to the contractual
            terms and is protected by the remaining subordination of 7.88%
            of the remaining unpaid principal balance of the pool.  Such
            remaining subordination percentage compares to the original
            subordination percentage of 8.50%.

                                    36
<PAGE> 39

      *     The two remaining Guardian pools (89-10 and 91-2), which are not
            considered to be other than temporarily impaired, continue to
            perform according to their contractual terms and are protected
            by remaining subordination of 7.85% and 18.87%, respectively.
            These remaining subordination levels compare to 8.50% and
            17.00%, respectively, at the date of issuance of the securities.

      *     In excess of $30.0 million in net principal payments have been
            received since March 31, 1995.

Accordingly, at December 31, 1996, management continues to believe that the
recorded investment in the above mentioned Guardian and Lehman pools is
recoverable.



                                    37
<PAGE> 40

Presented below is information at December 31, 1996 relating to Roosevelt's
investment in the Guardian pools, segregated between the seven pools
determined to be other than temporarily impaired and the two pools which, in
the opinion of management, continue to be adequately protected from loss
through substantial remaining subordination. The immediately succeeding table
also includes information related to Lehman 91-4 which has been determined to
be other than temporarily impaired.

<TABLE>
                                  POOLS DETERMINED TO BE OTHER THAN TEMPORARILY IMPAIRED
                                                     December 31, 1996
                                                   (dollars in thousands)

<CAPTION>
                                                   Subordination As a     Regarding Roosevelt's Interests
                                                       Percent of         -------------------------------
                               Rating                 Pool Balance        Original                           Percent of Pools
Pool     Issue       ---------------------------  --------------------      Par     Remaining  Remaining    Current or Less Than
Number   Date        Agency   At Issue   Current   At Issue   Current     At Issue     Par     Investment    90 Days Delinquent
------   ----        ------   --------   -------   --------   -------     --------     ---     ----------    ------------------

GUARDIAN POOLS
--------------

<S>    <C>           <C>       <C>        <C>      <C>        <C>        <C>        <C>       <C>                 <C>
89-11  11/30/89       S & P     AA         CCC      8.50%      7.88%      $ 33,750   $ 7,095   $ 5,134             74%
                      Moody     Aa2        B3

90-1   1/30/90        S & P     AA          D       8.50%        --          3,000       605       462             78%
                      Moody     Aa2        Caa

90-2   2/27/90        S & P     AA          D       8.50%        --         27,500     5,154     3,820             82%
                      Moody     Aa2        Caa

90-4   4/30/90        S & P     AA          D       8.75%        --         46,428    10,165     7,970             72%
                      Moody     Aa2        Caa

90-5   5/31/90        S & P     AA          D       8.75%        --         45,000    11,930     9,880             76%
                      Moody     Aa2        Caa

90-7   7/25/90        S & P     AA          D       8.75%        --         68,025    16,074    12,436             75%
                      Moody     Aa2        Caa

90-8   9/21/90        S & P     AAA        C       14.00%        --         15,000     3,956     2,801             71%
                      Moody     Aaa        B3                             --------   -------   -------

<S>                  <C>       <C>        <C>      <C>        <C>        <C>        <C>       <C>                 <C>
Total Guardian                                                            $238,703   $54,979   $42,503
                                                                          ========   =======   =======

<CAPTION>
LEHMAN POOL
-----------

<S>    <C>           <C>       <C>        <C>      <C>        <C>        <C>        <C>       <C>                 <C>
91-4   7/30/91        S & P     AA         D       23.00%        --       $ 14,000    $8,615    $4,459             84%
                      Moody     Aa3        Caa                            ========   =======   =======
</TABLE>

<TABLE>
                    GUARDIAN POOLS DETERMINED TO BE ADEQUATELY PROTECTED BY REMAINING CREDIT ENHANCEMENT
                                                      December 31, 1996
                                                   (dollars in thousands)

<CAPTION>
                                                   Subordination As a     Regarding Roosevelt's Interests
                                                       Percent of         -------------------------------
                               Rating                 Pool Balance        Original                           Percent of Pools
Pool     Issue       ---------------------------  --------------------      Par     Remaining  Remaining    Current or Less Than
Number   Date        Agency   At Issue   Current   At Issue   Current     At Issue     Par     Investment    90 Days Delinquent
------   ----        ------   --------   -------   --------   -------     --------     ---     ----------    ------------------

<S>    <C>           <C>       <C>        <C>      <C>        <C>        <C>        <C>       <C>                 <C>
89-10  10/27/89       S & P     CCC        CCC      8.50%      7.85%       $ 9,000   $ 1,405   $ 1,420             83%
                      Moody     B3         Ba3

91-2   3/28/91        S & P     AA         BB      17.00%     18.87%        39,831    11,330   $11,330             73%
                      Moody     Aaa        Baa3                            -------   -------   -------

Totals                                                                     $48,831   $12,735   $12,750
                                                                           =======   =======   =======
</TABLE>


                                    38
<PAGE> 41


NONINTEREST EXPENSE
General and Administrative - General and administrative expense increased
$35.7 million to $123.4 million for 1996 as compared to $87.7 million for
1995.  General and administrative expense in 1996 was adversely impacted by a
$27.4 million pre-tax charge imposed by the Federal Deposit Insurance
Corporation (FDIC) in order to recapitalize the Savings Association Insurance
Fund.  Without this charge, general and administrative expense in 1996 would
have increased $8.3 million , or 9.5% to $96.0 million for 1996 versus $87.7
for 1995.  This increase was due primarily to a $7.5 million increase in
compensation and employee benefits and a $4.1 million increase in other
noninterest expense which was partially offset by a $2.6 million decrease in
federal insurance premiums.  The increases in compensation and employee
benefits and other noninterest expense is primarily attributable to increased
costs associated with the mobilization of the Bank's retail efforts.  The
decrease in federal insurance premiums resulted from reductions in the rates
charged by the FDIC on the Company's deposits insured by both the Bank
Insurance Fund and the Savings Association Insurance Fund.  The Legislation
enacted to recapitalize the Savings Association Insurance Fund also provided
for further reductions in premiums charged for deposits insured by the
Savings Association Insurance Fund beginning January, 1997.  As a result, the
Company expects to realize further declines in the cost of federal deposit
insurance premiums thereafter.

General and administrative expense decreased $23.3 million, or 21.0% to $87.7
million for 1995 as compared to $111.0 million for 1994.  The major reasons
for the decrease in 1995 are due to 1994 including $19.8 million of
merger-related costs and the fact that 1995 general and administrative
expense was also positively impacted by efficiencies totaling $6.3 million
realized as a result of the Farm & Home merger.  The merger expenses related
primarily to $5.2 million in severance expense (included in "Compensation
and employee benefits"), $5.3 million in costs to dispose of excess
facilities incident to the acquisition of Farm & Home (included in
"Occupancy") and $9.3 million of transaction costs (included in "Other").

Provision for Real Estate Losses - Provisions for real estate losses totaled
$4.6 million for 1994.  During 1994, in connection with the acquisition of
Farm & Home, a  provision of $3.7 million was established.  This provision
represented a 25% reduction in net carrying value of REO to accommodate a
change in strategy whereby Roosevelt would accelerate the disposition of Farm
& Home's real estate portfolio.  Additionally, during 1994, a $839,000
provision was recorded related to six non-residential real estate properties.


INCOME TAXES
Income taxes include federal income taxes and applicable state income taxes.
Roosevelt's effective tax rates were 34.4%, 27.5% and 33.9% for 1996, 1995
and 1994, respectively.  The principal reasons for the Company's effective
tax rate being below the statutory rate for each year are the resolution of
federal tax issues after completion of examinations by the Internal Revenue
Service.

EXTRAORDINARY ITEMS
Roosevelt recorded losses on extraordinary items of $1.5 million and $7.8
million, net of income taxes, for 1996 and 1994, respectively. The  1996 loss
was the result of two transactions.  First, the Company called its 9.5%
subordinated notes resulting in an $812,000 pre-tax loss.  Second, the
Company defeased its remaining 10.125% mortgage-backed bonds resulting in a
pre-tax loss of approximately $1.4 million.  The $7.8 million loss for 1994
was the result of three transactions.  First, Roosevelt recorded a loss
totaling $4.6 million relating to the retirement of a portion of its 10.125%
mortgage-backed bonds.  Second, Roosevelt recorded a loss totaling $2.6
million relating to the retirement of the 13.0% subordinated debentures
previously issued by Farm & Home.  Third, Roosevelt recorded a loss totaling
$637,000 relating to the prepayment of advances from FHLB of Des Moines
originally entered into by Farm & Home.

FINANCIAL CONDITION
Total assets decreased $1.2 billion or 13.5% to $7.8 billion at December 31,
1996 from $9.0 billion at December 31, 1995.  In 1996 the Company continued
to focus on its strategies of originating a larger percentage of its assets,
diversifying its balance sheet from only mortgage and real estate related
assets and expanding its retail deposit base with a simultaneous shift within
that base toward checking and transaction accounts.  Additional strategies to
further the transition were undertaken primarily in the third and fourth
quarters and included the removal of marginally profitable assets, lessening
the use of higher cost wholesale fundings, simplifying the balance sheet by
using fewer derivatives as synthetic alterations and increasing the capital
to assets ratio so as to be better positioned to take advantage of future
opportunities.  All of these strategies were part of the Company's continuing
efforts to transition itself from a traditional thrift to a full service
retail bank and resulted not only in balance sheet shrinkage but also in
changes in the composition of the balance sheet.

The Company originated approximately $1.4 billion and purchased an additional
$291.6 million of loans in 1996 as compared to originations and purchases of
$688.6 million and $321.1 million in 1995.  Additionally, the Company
securitized and sold approximately $210.0 million of long term fixed rate
mortgages in 1996 and experienced principal repayments of approximately
$897.0 million contributing to the growth in net loans in 1996 of $720.6
million.  The 1996 originations included $796.6 million of adjustable rate
mortgage loans, $318.4  million of fixed rate mortgage loans, $226.2 million
of adjustable rate consumer loans and $65.6 million of fixed rate consumer
loans.  Consumer loans totaled $348.3 million or 8.1% of gross loans

                                    39
<PAGE> 42
at December 31, 1996 versus $125.6 million or 3.5% at December 31, 1995.
Total net loans were $4.3 billion or 55.1% of total assets at December 31,
1996 as compared to $3.6 billion or 39.7% at December 31, 1995.

The Company's total investment portfolios declined $2.0 billion or 38.8% to
$3.2 billion at December 31, 1996 as compared to $5.2 billion at December 31,
1995.  The Company transferred all held to maturity investment portfolios to
the available for sale portfolio in December of 1996.  This action was
undertaken to provide the Company maximum flexibility to manage its
portfolio.  Proceeds from the sale of securities were used to fund loan
originations and to repay short-term higher cost wholesale borrowings.  Total
investment securities represented 40.5% of total assets at December 31, 1996,
down from 57.2% at December 31, 1995.

Total liabilities declined $1.2 billion or 14.3% to $7.3 billion at December
31, 1996 versus $8.5 billion at December 31, 1995.  Growth in deposits of
$439.6 million (including $228.2 million resulting from the three
acquisitions completed in 1996) was more than offset by reductions in
securities sold under agreements to repurchase, advances from the Federal
Home Loan Bank, and other borrowings totaling $1.7 billion.  Total deposits
represented 73.3% of total liabilities at December 31, 1996, as compared to
57.6% at December 31, 1995.  The composition of deposits also changed.
Demand deposits at December 31, 1996 represented 27.6% of total deposits as
compared to 25.0% at December 31, 1995.  Proceeds from the sales of mortgage
loans and investment securities were used to repay, primarily in the fourth
quarter, short-term higher cost wholesale borrowings.


                                    40
<PAGE> 43

ASSET QUALITY

Maintaining a low level of nonperforming assets is critical to the success of
a financial institution.  As the percentage of assets that are classified as
nonperforming assets changes, so do expectations regarding interest income,
potential provisions for losses and operating expenses incurred to manage and
resolve these assets.

The following table sets forth the amounts and categories of nonperforming
assets. Loans are placed on nonaccrual status when the collection of
principal and/or interest becomes doubtful.  Troubled debt restructurings
involve forgiving a portion of interest or principal on any loans or making
loans at a rate materially less than that of market rates.  Foreclosed assets
include assets acquired in settlement of loans.  "Other than temporarily
impaired" mortgage-backed securities represent private issuer mortgage-backed
securities that have been determined to be "other than temporarily impaired"
under the provisions of Statement of Financial Accounting Standards No. 115
and for which the previously existing credit enhancement support, in the form
of subordination, has been totally absorbed and therefore any future losses
will flow directly to the Company as a senior position holder. These
securities were issued with several classes available for purchase.  Certain
classes are subordinate to the position of senior classes in that such
subordinate classes absorb all credit losses and must be completely
eliminated before any losses flow to senior position holders.  The securities
purchased by the Company were purchases of the most senior positions, thus
intended to be protected by the subordination credit enhancement feature.  In
an attempt toward a conservative presentation, the Company includes the
entire estimated fair value of these securities (approximately 74% of the
unpaid principal balances at December 31, 1996) in this table when the credit
enhancement, in the form of subordination, is exhausted even though a
substantial portion of the underlying loans (approximately 76% at December
31, 1996) are either current or less than 90 days delinquent.  In addition,
the remaining amount of "other than temporarily impaired" mortgage-backed
securities that continue to be protected by remaining credit enhancement, but
for which the Company has concluded it is probable that such credit
enhancement will be absorbed before the duration of the underlying security,
are disclosed in the paragraphs following the table as other potential
problem assets.  See the caption entitled "Unrealized Losses on Impairment of
Mortgage-Backed Securities Held to Maturity" under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations" for
further details.

<TABLE>
<CAPTION>
                                                               December 31,
                                        ---------------------------------------------------------
                                           1996        1995        1994        1993       1992
                                           ----        ----        ----        ----       ----
                                                          (dollars in thousands)
<S>                                     <C>        <C>         <C>         <C>         <C>
Nonperforming Assets

Nonaccruing loans:
  Residential                            $ 9,659    $  7,895    $  5,666    $  9,524    $ 12,249
  Commercial real estate                   1,968       1,415       1,626         985       7,988
  Consumer                                   597         193         269         217         217
                                          ------      ------      ------      ------      ------
    Total                                 12,224       9,503       7,561      10,726      20,454
                                          ------      ------      ------      ------      ------
Accruing loans delinquent more
  than 90 days:
  Residential                             10,126      10,500       4,598       4,056       2,110
  Commercial real estate                      --          --         482          --          --
  Consumer                                    --          --          --          --           4
  Land                                        --          --          --         360         394
                                          ------      ------      ------      ------      ------
    Total                                 10,126      10,500       5,080       4,416       2,508
                                          ------      ------      ------      ------      ------
Troubled-debt restructurings:
  Commercial real estate                      53         661       2,757       2,127       1,363
                                          ------      ------      ------      ------      ------
Foreclosed/Repossessed assets:
  Residential                              4,761       5,340       2,703       1,373       2,049
  Commercial real estate                   7,804      11,483      16,085      15,998      20,500
  Consumer                                   238          11          --          --          16
                                          ------      ------      ------      ------      ------
    Total                                 12,803      16,834      18,788      17,371      22,565
                                          ------      ------      ------      ------      ------
    Total nonperforming
      loans and REO                       35,206      37,498      34,186      34,640      46,890
    Total nonperforming loans
      and REO as a percentage
      of total assets                        .45%        .42%        .41%        .46%        .78%
                                          ======      ======      ======      ======      ======
Other than temporarily impaired
 mortgage-backed securities with
 approximately 76% of the underlying
 loans either current or less
 than 90 days delinquent                  41,828      43,429          --          --          --
                                          ------      ------      ------      ------      ------
Total "nonperforming assets"             $77,034    $ 80,927    $ 34,186    $ 34,640    $ 46,890
                                          ======      ======      ======      ======      ======
Total "nonperforming assets"
 as a percentage of total assets             .99%        .90%        .41%        .46%        .78%
                                          ======    ========      ======      ======      ======
</TABLE>

Nonperforming assets have decreased $3.9 million to $77.0 million at December
31, 1996 as compared to $80.9 millon at December 31, 1995.  Non-accruing
loans increased $2.7 million, accruing loans delinquent more than 90 days
decreased $374,000 and foreclosed repossessed assets decreased $4.0
million.  Other than temporarily impaired mortgage-backed securities
decreased $1.6 million.  For a further discussion of such securities, see
the caption entitled "Unrealized Losses on Impairment of Mortgage-Backed
Securities Held to Maturity" under the heading "Results of Operations" for
further details.

                                    41
<PAGE> 44

Not included in the preceding table is a private issuer mortgage-backed
security with a carrying value of $5.1 million which was performing according
to its contractual terms at December 31,1996.  However, this security was
determined by the Company to be "other than temporarily impaired" and written
down to fair value, since at March 31, 1995, the subordination protection had
been reduced to the point where the Company concluded it was not probable
that the security would continue to perform to 100% of its contractual terms
over the course of its remaining life.  The security will be included in the
preceding non-performing asset table in future periods when, and if, the
remaining subordination is exhausted.  The following table is a
reconciliation of the amount of currently performing, other than temporarily
impaired mortgage-backed securities at March 31, 1995 to such amount at
December 31, 1996.

<TABLE>
<CAPTION>
                                                                              (in millions)
<S>                                                                             <C>
      Amount of currently performing, other than temporarily impaired
      mortgage-backed securities at March 31, 1995                                $ 52.4

      Principal payments received                                                   (9.4)

      Addition of Guardian Pools 1990-1,1990-2, 1990-4, 1990-5, 1990-7, 1990-8
      and Lehman Pool 91-4 to the nonperforming asset table as subordination
      protection was absorbed between March 31, 1995 and December 31, 1996         (37.9)

      Amount outstanding of the currently performing, other than temporarily        ----
      impaired mortgage-backed security at December 31, 1996                      $  5.1
                                                                                    ====
</TABLE>

To monitor the credit risk inherent in its private issuer mortgage-backed
security portfolio, the Company tracks the major factors effecting the
performance of its portfolio including i) a review of delinquencies,
foreclosures, repossessions, and recovery rates relative to the underlying
mortgage loans collateralizing each security, ii) the level of available
subordination or other credit enhancement and iii) the rating assigned to
each security by independent national rating agencies.


ASSET/LIABILITY MANAGEMENT

The Company's primary objective regarding asset/liability management is to
position the Company such that changes in interest rates do not have a
material adverse impact upon net interest income or the net market value of
the Company.  See Note 3 - Fair Value Consolidated Balance Sheets of the
Notes to Consolidated Financial Statements for additional information
regarding the calculation of net market value.  The Company's primary
strategy for accomplishing its asset/liability management objective is
achieved by matching the weighted average maturities of assets, liabilities,
and off-balance sheet items (duration matching).  A portion of the duration
matching strategy has involved, more historically than currently, the use
of derivative financial instruments such as interest rate exchange
agreements, interest rate cap and floor agreements and, to a much more
limited extent, financial futures contracts.  The Company uses derivative
financial instruments solely for risk management purposes. None of the
Company's derivative instruments are what are termed leveraged
instruments. These types of instruments are riskier than the derivatives used
by the Company in that they have embedded options that enhance their
performance in certain circumstances but dramatically reduce their
performance in other circumstances. The Company is not a dealer nor does it
make a market in such instruments.  The Company does not trade the
instruments and the Board of Directors' approved policy governing the
Company's use of these instruments strictly forbids speculation of any kind.

Net market value as prescribed by Statement of Financial Accounting Standards
No. 107 "Disclosures about Fair Value of Financial Instruments" (SFAS 107) is
calculated by adjusting stockholders' equity for differences between the
estimated fair values and the carrying values (historical cost basis) of the
Company's assets, liabilities, and off-balance sheet items.  Net market
value, as calculated by the Company and presented herein, should not be
confused with the value of the Company's stock or of the amounts
distributable to stockholders in connection with a sale of the Company or in
the unlikely event of its liquidation. Under SFAS 107 certain valuations,
such as the estimated value of demand deposits, are not considered as part of
the net market value calculation.  As a result the Company calculates an
economic net market which is comprised of net market value as calculated
under SFAS 107 plus the estimated value of demand deposits. The economic net
market value (including the estimated value of demand deposits totaling $33.2
million and $19.6 million at December 31, 1996 and 1995, respectively) as
calculated by the Company increased to approximately $557.6 million at
December 31, 1996 as compared to approximately $481.5 million at December 31,
1995.  To measure the impact of interest rate changes, the Company
recalculates its net market value on a pro forma basis assuming
instantaneous, permanent parallel shifts in the yield curve, in varying
amounts both upward and downward.  Larger increases or decreases in the
Company's net market value as a result of these assumed interest rate changes
indicate greater levels of interest rate sensitivity than do smaller
increases or decreases in net market value.  The Company endeavors to
maintain a position whereby it experiences no material change in net market

                                    42
<PAGE> 45
value as a result of assumed 100 and 200 basis point increases and decreases
in general levels of interest rates.

The OTS issued a regulation, effective January 1, 1994, which uses a similar
methodology to measure the interest rate risk exposure of thrift
institutions.  This exposure is a measure of the potential decline in the net
portfolio value of the institution based upon the effect of an assumed 200
basis point increase or decrease in interest rates.  "Net portfolio value" is
the present value of the expected net cash flow from the institution's
assets, liabilities, and off-balance sheet contracts.  Under the OTS
regulation, an institution's "normal" level of interest rate risk in the
event of this assumed change in interest rates is a decrease in the
institution's net portfolio value in an amount not exceeding two percent of
the present value of its assets.  The regulation provides for a two quarter
lag between calculating interest rate risk and recognizing any deduction from
capital.  The amount of that deduction is one-half of the difference between
(a) the institution's actual calculated exposure to the 200 basis point
interest rate increase or decrease (whichever results in the greater pro
forma decrease in net portfolio value) and (b) its "normal" level of exposure
which is two percent of the present value of its assets.  The OTS recently
announced that it will delay the effectiveness of the regulation until it
adopts the process by which an association may appeal an interest rate risk
capital deduction determination.

Utilizing this measurement concept, the interest rate risk of the Company at
December 31, 1996 is as follows:

<TABLE>
<CAPTION>
                                                                          (DOLLARS IN THOUSANDS)

<S>                                                    <C>             <C>             <C>           <C>
Basis point changes in interest rates                       -200            -100            +100           +200
Change in net market value due to changes in
  interest rates (Company methodology)                  $(18,066)       $ (3,812)       $(11,229)      $(38,463)
Interest rate exposure deemed "normal" by the OTS      $(155,928)            N/A             N/A      $(155,928)
</TABLE>

The Company's operating strategy is designed to avoid material negative
changes in net market value.  As of December 31, 1996, the Company believes
it has accomplished its objectives as the pro forma changes in net market
value brought about by changes in interest rates are not material relative to
the Company's net market value.  A net unrealized market value loss when
rates increase indicates the duration of the Company's assets is slightly
longer than the duration of the Company's liabilities.  A loss when rates
decrease is due primarily to borrowers prepaying their loans resulting in the
Company's assets repricing down more quickly than the Company can reprice its
liabilities.



                                    43
<PAGE> 46

MATURITY GAP ANALYSIS
Thrift institutions have historically presented a Gap Table as a measure of
interest rate risk.  The Gap Table presents the projected maturities and
periods to repricing of a thrift's rate sensitive assets and liabilities.
The OTS has concluded such an analysis has limitations, however, for reasons
of consistency the following discussion presents the Company's traditional
Maturity Gap Analysis.

The Company's one year cumulative gap, which represents the difference
between the amount of interest sensitive assets maturing or repricing in one
year and the amount of interest sensitive liabilities maturing or repricing
in the same period was (2.51%) at December 31, 1996.  A negative cumulative
gap indicates that interest sensitive liabilities exceed interest sensitive
assets at a specific date.  In a rising interest rate environment
institutions with negative maturity gaps generally will experience a more
rapid increase in interest expense paid on liabilities than the interest
income earned on assets.  Conversely, in an environment of falling interest
rates, interest expense paid on liabilities will generally decrease more
rapidly than the interest income earned on assets.  A positive gap will have
the opposite effect.

The following table presents the projected maturities and periods to
repricing of the Company's rate sensitive assets and liabilities as of
December 31, 1996, adjusted to account for anticipated prepayments.

<TABLE>
<CAPTION>
                                                         Over 3          Over 1       Over 3
                                                         Months           Year         Years
                                          Up to 3       Through         Through       Through        Over
                                          Months         1 Year         3 Years       5 Years       5 Years        Total
                                         --------      ---------       ---------     ---------     ---------      -------
                                                                     (Dollars in Thousands)

<S>                                   <C>            <C>            <C>              <C>          <C>          <C>
ASSETS:
Mortgage loans and mortgage-backed
 securities:
 Balloon and adjustable rate first
   mortgage loans                     $  1,723,549    $ 2,445,512    $   604,528      $ 227,306    $  15,625    $ 5,016,520
 One to four family residential first
   mortgages and contracts                 186,969        147,191        429,465        281,251      586,266      1,631,142
 Five or more family residential and
   nonresidential first mortgages and
   contracts                                62,830         32,011         58,772         16,277       13,144        183,034
 Second mortgages                              787            124            163             28           14          1,116
Non-mortgage loans:
 Consumer                                  228,681         20,735         45,990         11,626       20,185        327,217
 Commercial                                 13,723          2,681          4,233            426           --         21,063
 Investments and interest bearing
  deposits                                 206,380          4,218          8,548         10,651        1,031        230,828
Premiums (discounts) and deferred
  loan fees, net                            23,027         12,252          6,966          3,488       12,293         58,026
                                        ----------      ---------      ---------        -------      -------      ---------
Total rate sensitive assets              2,445,946      2,664,724      1,158,665        551,053      648,558      7,468,946
                                        ----------      ---------      ---------        -------      -------      ---------
LIABILITIES:
    Fixed maturity deposits                753,849      1,610,511      1,165,995        238,506      102,544      3,871,405
    NOW, Super NOW, and other
     transaction accounts                   29,906         36,044         64,880         51,905      207,617        390,352
    Money market deposit accounts          796,046             --             --             --           --        796,046
    Passbook accounts                       27,202         26,207         47,172         37,737      150,950        289,268
    FHLB advances                        1,607,756        216,000          9,500          2,500        2,000      1,837,756
    Other borrowings                         3,095             --             --             --           --          3,095
                                        ----------      ---------      ---------        -------      -------      ---------
Total rate sensitive liabilities         3,217,854      1,888,762      1,287,547        330,648      463,111      7,187,922
Effect of interest rate floor
  agreements on rate sensitive
  liabilities                              350,000       (150,000)      (200,000)            --           --             --
                                        ----------      ---------      ---------        -------      -------      ---------
  Total rate sensitive liabilities
  adjusted for impact of interest
  rate floor agreements                  3,567,854      1,738,762      1,087,547        330,648      463,111      7,187,922
                                        ----------      ---------      ---------        -------      -------      ---------
Maturity gap                          $ (1,121,908)   $   925,962    $    71,118      $ 220,405    $ 185,447    $   281,024
                                        ==========      =========      =========        =======      =======      =========
Gap as a percent of total assets            (14.39)%        11.88%          (.91)%         2.83%        2.38%
                                        ==========      =========      =========        =======      =======
Cumulative maturity gap               $ (1,121,908)   $  (195,946)   $  (124,828)     $  95,577    $ 281,024
                                        ==========      =========      =========        =======      =======
Cumulative gap as a percent of
  total assets                              (14.39)%        (2.51)%        (1.60)%         1.23%        3.61%
                                        ==========      =========      =========        =======      =======
</TABLE>


                                    44
<PAGE> 47

In preparing the table above, it has been assumed that (i) balloon and
adjustable-rate first mortgage loans will prepay at a rate of 18% per year,
(ii) fixed-rate first mortgage loans on residential properties of five or
more units and nonresidential properties will prepay at a rate of 10% per
year, (iii) fixed maturity deposits will not be withdrawn prior to maturity,
(iv) passbook and NOW accounts will be withdrawn at a rate of approximately
10% in each of the first two periods and at other assumed rates ranging from
20% to 100% thereafter, (v) fixed-rate mortgage loans on one- to four-family
residences with terms to maturity of 10 years or less will prepay at a rate
of 20% per year, (vi) second mortgage loans on one- to four-family residences
will prepay at a rate of 30% per year, and (vii) fixed-rate first mortgage
loans on one- to four-family residential properties with remaining terms to
maturity of over 10 years will prepay annually as follows:

<TABLE>
<CAPTION>
                                        PREPAYMENT ASSUMPTIONS
MORTGAGE LOAN            --------------------------------------------------
INTEREST RATE             OVER 10 TO 20 YEARS            20 YEARS AND OVER
-------------            ---------------------          -------------------

<S>                           <C>                            <C>
Less than 8%                     8.00%                          8.00%
8 to 10%                        23.00                          23.00
10 to 12%                       22.00                          22.00
12 to 14%                       22.00                          22.00
14 to 16%                       22.00                          22.00
16% and over                    22.00                          22.00
</TABLE>

The above assumptions do not necessarily indicate the impact of general
interest rate movements.  Accordingly, certain assets and liabilities
indicated as repricing within a stated period may in fact reprice at
different times and at different rate levels.

The amounts in the table could be significantly affected by external factors,
such as prepayment rates other than those assumed, early withdrawals of
deposits, changes in the correlation of various interest-bearing instruments,
and competition.  Additionally, decisions by the Company to sell assets,
retire debt, or cancel interest rate exchange arrangements early would also
change the maturity/repricing and spread relationships.


LIQUIDITY AND CAPITAL RESOURCES

OTS regulations require federally insured savings institutions to maintain a
specified ratio (presently 5.0%) of cash and short-term United States
Government, government agency, and other specified securities to net
withdrawable accounts and borrowings due within one year.  The Company has
maintained liquidity in excess of required amounts having had ratios of
5.05%, 5.64%, and 5.91% at December 31, 1996, 1995, and 1994, respectively.

The Company's cash flows are comprised of cash flows from operating,
investing and financing activities.  Cash flows provided by operating
activities, consisting primarily of interest received on investments
(principally loans and mortgage-backed securities) less interest paid on
deposits and other short-term borrowings, were $125.2 million for the year
ended December 31, 1996  Net cash related to investing activities, consisting
primarily of purchases of mortgage-backed securities and originations and
purchases of loans, offset by principal repayments on mortgage-backed
securities and loans and sales of mortgage-backed securities available for
sale, provided $1.5 billion for the year ended December 31, 1996.  Net cash
related to financing activities, consisting of proceeds, net of repayments,
from FHLB advances, proceeds from securities sold under agreements to
repurchase and excess of deposits receipts over withdrawals, utilized $1.6
billion for the year ended December 31, 1996.

At December 31, 1996, the Company had commitments outstanding to originate
fixed-rate mortgage loans of approximately $27.8 million and adjustable-rate
mortgages of approximately $66.5 million.  At December 31, 1996, the Company
had outstanding commitments to purchase and sell mortgage-backed securities
of approximately $199.3 million and $160.0 million, respectively.  The
Company expects to satisfy such commitments through its primary source of
funds.

OTS regulations impose various restrictions or requirements on associations
with respect to their ability to pay dividends or make other distributions of
capital.  The OTS utilizes a three-tiered approach to permit associations,
based on their capital level and supervisory condition, to make capital
distributions which include dividends, stock redemptions or repurchases,
cash-out mergers, interest payments on certain convertible debt, and other
transactions charged to the capital account.  Tier 1 associations, which are
associations that before and after the proposed distribution meet or exceed
their fully phased-in capital requirements, may make capital distributions
during any calendar year up to the greater of 100% of net income for the
year-to-date plus 50% of the amount by which the lesser of the association's
tangible, core, or total capital exceeds its fully phased-in capital
requirement, as measured at the beginning of the calendar year.  As of
December 31, 1996, the Bank's excess capital over its fully phased-in core
capital requirement was approximately $192.0 million.  The Company is also
subject to Delaware law which limits dividends to an amount equal to the
excess of a corporation's net assets over paid-in capital or, if there is no
excess, to its net profits for the current and immediately preceding fiscal
year.  See "Regulation -- Limitations on Dividends and Other Capital
Distributions."

                                    45
<PAGE> 48

Certain liquidity risks are inherent in asset/liability management.  Such
risks include, among others, changes in interest rates, which can cause
margin calls on reverse repurchase agreements as a result of changes in the
value of collateral, and timing delays when the receipt of interest,
principal or repayments on loans and mortgage-backed securities does not
correspond with the timing of the funding of the related liability.  The
Company has implemented policies through which it endeavors to manage these
liquidity risks.  Liquidity is maintained at levels which exceed the amounts
required for regulatory purposes.

IMPACT OF INFLATION AND CHANGING PRICES

Unlike most industrial companies, virtually all of the assets and liabilities
of a financial institution are monetary in nature.  As a result, interest
rates have a more significant impact on a financial institution's performance
than do the general levels of inflation.  Interest rates do not necessarily
move in the same direction or in the same magnitude as the price of goods and
services.  In the current interest rate environment, liquidity and the
maturity structure of the Company's assets and liabilities are critical to
the maintenance of acceptable performance levels.

The consolidated financial statements and related financial data presented
herein have been prepared in accordance with generally accepted accounting
principles, which require the measurement of financial position and operating
results in terms of historical dollars, without considering changes in the
relative purchasing power over time due to inflation.

IMPACT OF PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

During June 1996, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinquishments of
Liabilities" (SFAS 125).  SFAS 125 provides accounting and reporting
standards for transfers and servicing of financial assets and extinguishments
of liabilities based on consistent application of a financial components
approach that focuses on control.  It distinguishes transfers of financial
assets that are sales from transfers that are secured borrowings.  Under the
financial components approach, after a transfer of financial assets, an
entity recognizes all financial and servicing assets it controls and
liabilities it has incurred and derecognizes financial assets it no longer
controls and liabilities that have been extinguished.  The financial
components approach focuses on the assets and liabilities that exist after
the transfer.  Many of these assets and liabilities are components of
financial assets that existed prior to the transfer.  If a transfer does not
meet the criteria for a sale, the transfer is accounted for as a secured
borrowing with pledge of collateral.

SFAS 125 extends the "available-for-sale" or "trading" approach in SFAS 115
to nonsecurity financial assets that can contractually be prepaid or
otherwise settled in such a way that the holder of the asset would not
recover substantially all of its recorded investment.  Thus, nonsecurity
financial assets (no matter how acquired) such as loans, other receivables,
interest-only strips or residual interests in securitization trusts that are
subject to prepayment risk that could prevent recovery of substantially all
of the recorded amount are to be reported at fair value with the change in
fair value accounted for depending on the asset's classification as
"available-for-sale" or "trading".  SFAS 125 also amends SFAS 115 to prevent
a security from being classified as held-to-maturity if the security can be
prepaid or otherwise settled in such a way that the holder of the security
would not recover substantially all of its recorded investment.

SFAS 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996, and is to
be applied prospectively.  Earlier or retroactive application is not
permitted.  Also, the extension of the SFAS 115 approach to certain
nonsecurity financial assets and the amendment to SFAS 115 is effective for
financial assets held on or acquired after January 1, 1997.
Reclassifications that are necessary because of the amendment do not call
into question an entity's intent to hold other debt securities to maturity in
the future.  The adoption of SFAS 125 is not expected to have a material
impact on the Company's financial statements.



                                    46
<PAGE> 49

<TABLE>
                                            SELECTED QUARTERLY FINANCIAL DATA
                                                       (UNAUDITED)

<CAPTION>
                                                                     QUARTERS ENDED IN 1996
                                                 ---------------------------------------------------------------
                                                  MARCH 31           JUNE 30       SEPT. 30             DEC. 31
                                                 ----------         ---------     ----------           ---------
                                                          (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                               <C>               <C>            <C>                 <C>
Total interest income                             $ 166,143         $ 162,280      $ 160,588           $ 151,300
Total interest expense                              119,769           118,984        117,257             106,714
                                                   --------          --------       --------            --------
  Net interest income                                46,374            43,296         43,331              44,586
Provision for losses on loans                          (300)             (300)          (300)               (362)
Noninterest income excluding net gain (loss) from
  financial instruments                               8,177             9,755         11,022              11,713
Net gain (loss) from financial instruments              341               521          1,781             (79,277)
Noninterest expense                                 (21,718)          (23,428)       (52,858)            (25,405)
                                                   --------          --------       --------            --------
Income (loss) before income tax expense
  and extraordinary item                             32,874            29,844          2,976             (48,745)
Income tax expense (benefit)                         11,309            10,116          1,016             (16,606)
                                                   --------          --------       --------            --------
Income (loss) before extraordinary item              21,565            19,728          1,960             (32,139)
Extraordinary item                                       --                --         (1,452)                 --
                                                   --------          --------       --------            --------
Net income (loss)                                 $  21,565         $  19,728      $     508           $ (32,139)
                                                   ========          ========       ========            ========
Net income (loss) attributable to common stock    $  20,508         $  18,671      $    (541)          $ (33,186)
                                                   ========          ========       ========            ========

Primary earnings per share:
  Income (loss) before extraordinary item         $    0.48         $    0.44      $    0.02           $   (0.76)
  Extraordinary item                                     --                --          (0.03)                 --
                                                   --------          --------       --------            --------
    Net income (loss)                             $    0.48         $    0.44      $   (0.01)          $   (0.76)
                                                   ========          ========       ========            ========

Fully-diluted earnings per share:
  Income (loss) before extraordinary item         $    0.46         $    0.42      $    0.02           $   (0.76)
  Extraordinary item                                     --                --          (0.03)                 --
                                                   --------          --------       --------            --------
    Net income (loss)                             $    0.46         $    0.42      $   (0.01)          $   (0.76)
                                                   ========          ========       ========            ========

<CAPTION>
                                                                     QUARTERS ENDED IN 1995
                                                 ---------------------------------------------------------------
                                                  MARCH 31           JUNE 30       SEPT. 30             DEC. 31
                                                 ----------         ---------     ----------           ---------
                                                          (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                               <C>               <C>            <C>                 <C>
Total interest income                             $ 156,436         $ 162,576      $ 163,920           $ 164,863
Total interest expense                              108,123           116,893        120,700             120,717
                                                   --------          --------       --------            --------
  Net interest income                                48,313            45,683         43,220              44,146
Provision for losses on loans                          (300)             (300)          (300)               (300)
Noninterest income (loss) excluding
  net gain (loss) from financial instruments        (19,480)            7,443          8,872               6,241
Net gain (loss) from financial instruments          (32,804)          (22,935)         1,620              (4,097)
Noninterest expense                                 (21,493)          (21,740)       (20,875)            (23,558)
                                                   --------          --------       --------            --------
Income (loss) before income tax expense
  and extraordinary item                            (25,764)            8,151         32,537              22,432
Income tax expense (benefit)                         (9,589)            2,291         11,040               6,516
                                                   --------          --------       --------            --------
Net income (loss)                                 $ (16,175)        $   5,860      $  21,497           $  15,916
                                                   ========          ========       ========            ========
Net income (loss) attributable to common stock    $ (17,247)        $   4,803      $  20,440           $  14,859
                                                   ========          ========       ========            ========

Primary earnings (loss) per share                 $   (0.43)        $    0.12      $    0.50           $    0.37
                                                   ========          ========       ========            ========

Fully-diluted earnings (loss) per share           $   (0.43)        $    0.12      $    0.47           $    0.35
                                                   ========          ========       ========            ========
</TABLE>

Net gain (loss) from financial instruments for the quarter ended December 31,
1996 was impacted by the recognition of previously deferred expense related
to the termination of interest rate exchange, cap and floor agreements of $80.5
million. Noninterest expense for the quarter ended September 30, 1996 was
impacted by the one-time SAIF assessment of $27.4 million.  See notes 15 and 19
of Notes to Consolidated Financial Statements and "Management's Discussion and
Analysis-Results of Operations" for further discussion.

                                    47
<PAGE> 50

Net gain (loss) from financial instruments was impacted by $(34.0) million,
$(27.8) million, $135,000 and $(9.5) million for the quarters ended March 31,
June 30, September 30 and December 31, 1995, respectively as a result of the
mark to market of the Company's financial futures positions used to reduce
the interest rate risk of certain mortgage-backed securities in the available
for sale portfolio.  Non-interest income for the quarter ended March 31, 1995
was impacted by a $27.1 million impairment charge related to certain
mortgage-backed securities.  See Notes 5 and 15 of Notes to Consolidated
Financial Statements and "Management's Discussion and Analysis-Results of
Operations" for further discussion.




                                    48
<PAGE> 51
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                       INDEPENDENT AUDITORS' REPORT



The Board of Directors
Roosevelt Financial Group, Inc.
Chesterfield, Missouri:

We have audited the accompanying consolidated balance sheets of Roosevelt
Financial Group, Inc. and subsidiaries (the Company) as of December 31, 1996
and 1995, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1996.  These consolidated financial statements are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Roosevelt
Financial Group, Inc. and subsidiaries as of December 31, 1996 and 1995, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1996, in conformity with generally
accepted accounting principles.

We have also audited, in accordance with generally accepted auditing
standards, the supplemental fair value consolidated balance sheets of the
Company as of December 31, 1996 and 1995.  As described in Note 3, the
supplemental fair value consolidated balance sheets have been prepared by
management to present relevant financial information that is not provided by
the historical cost consolidated balance sheets and is not intended to be a
presentation in conformity with generally accepted accounting principles.  In
addition, the supplemental fair value consolidated balance sheets do not
purport to present the net realizable, liquidation, or market value of the
Company as a whole.  Furthermore, amounts ultimately realized by the Company
from the disposal of assets may vary significantly from the fair values
presented.  In our opinion, the supplemental fair value consolidated balance
sheets referred to above present fairly, in all material respects, the
information set forth therein.




KPMG Peat Marwick LLP


St. Louis, Missouri
January 20, 1997





                                    49
<PAGE> 52
<TABLE>

                                                   ROOSEVELT FINANCIAL GROUP, INC.
                                                          AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
                                                       (dollars in thousands)
<CAPTION>

                                                                                                       December 31,
                                                                                           --------------------------------

                                                                                               1996                 1995
                                                                                           -----------          -----------
<S>                                                                                        <C>                  <C>
                                       ASSETS

Cash and cash equivalents                                                                  $    48,642          $    15,433
Securities available for sale:
      Investment securities                                                                    183,227              159,857
      Mortgage-backed securities                                                             2,974,530            1,446,604
Securities held to maturity:
      Investment securities                                                                         --              119,186
      Mortgage-backed securities                                                                    --            3,430,954
Loans                                                                                        4,298,469            3,577,892
Real estate owned                                                                               12,438               15,433
Office properties and equipment, net                                                            54,966               52,466
Other assets                                                                                   224,140              195,236
                                                                                             ---------            ---------
                                                                                           $ 7,796,412          $ 9,013,061
                                                                                             =========            =========

                             LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                                   $ 5,347,071          $ 4,907,497
Securities sold under agreements to repurchase                                                   3,095            1,082,814
Advances from Federal Home Loan Bank                                                         1,837,756            2,377,138
Other borrowings                                                                                    --               47,523
Other liabilities                                                                              111,063              101,183
                                                                                             ---------            ---------
        Total liabilities                                                                    7,298,985            8,516,155
                                                                                             ---------            ---------
Stockholders' equity:
      Preferred stock - $.01 par value; $50 preference value; 6.5% non-cumulative
       perpetual convertible; aggregate preference value of $64,441 and $65,050
       at December 31, 1996 and 1995, respectively; 3,000,000 shares authorized
       and 1,288,825 and 1,301,000 shares issued and outstanding
       at December 31, 1996 and 1995, respectively                                                  13                   13
      Common stock - $.01 par value; 90,000,000 shares authorized;
       44,183,124 and 41,991,701 shares issued
       and outstanding at December 31, 1996 and 1995, respectively                                 442                  420
      Paid-in capital                                                                          298,283              262,381
      Retained earnings - subject to certain restrictions                                      202,550              223,606
      Unrealized gain (loss) on securities available for sale,
       net of taxes                                                                             (2,226)              12,019
      Unamortized restricted stock awards                                                       (1,635)              (1,533)
                                                                                             ---------            ---------
           Total stockholders' equity                                                          497,427              496,906
                                                                                             ---------            ---------
                                                                                           $ 7,796,412          $ 9,013,061
                                                                                             =========            =========

                                    See accompanying notes to consolidated financial statements.
</TABLE>

                                    50
<PAGE> 53


<TABLE>
                                                   ROOSEVELT FINANCIAL GROUP, INC.
                                                          AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                        (dollars in thousands, except per share information)
<CAPTION>
                                                                                        Year Ended December 31,
                                                                     ---------------------------------------------------------
                                                                        1996                   1995                    1994
                                                                     ---------               ---------               ---------
<S>                                                                  <C>                     <C>                     <C>
Interest income:
   Loans                                                             $ 303,304               $ 252,071               $ 206,467
   Securities available for sale                                       109,784                 135,444                 137,933
   Securities held to maturity                                         225,415                 259,262                 179,168
   Securities held for trading                                              --                      --                   6,460
   Other                                                                 1,808                   1,018                   3,258
                                                                     ---------               ---------               ---------
     Total interest income                                             640,311                 647,795                 533,286
                                                                     ---------               ---------               ---------
Interest expense:
   Deposits                                                            249,820                 233,836                 200,190
   Other borrowings                                                    194,270                 223,508                 138,915
   Interest rate exchange agreements, net                               18,634                   9,089                   8,469
                                                                     ---------               ---------               ---------
     Total interest expense                                            462,724                 466,433                 347,574
                                                                     ---------               ---------               ---------
     Net interest income                                               177,587                 181,362                 185,712
Provision for losses on loans                                            1,262                   1,200                  12,432
                                                                     ---------               ---------               ---------
       Net interest income after provision for losses on loans         176,325                 180,162                 173,280
                                                                     ---------               ---------               ---------
Noninterest income (loss):
   Retail banking fees                                                  17,157                  10,706                   8,682
   Insurance and brokerage sales commissions                             8,494                   7,506                   6,538
   Loan servicing fees, net                                             10,982                   7,401                   7,359
   Net loss from financial instruments                                 (76,634)                (58,216)                (10,660)
   Gain on sales of real estate acquired for development and sale        1,633                   1,656                   3,414
   Gain on sale of loan servicing rights                                    --                   1,510                      --
   Unrealized losses on impairment of mortgage-backed securities            --                 (27,063)                     --
   Other                                                                 2,401                   1,360                   1,923
                                                                     ---------               ---------               ---------
     Total noninterest income (loss)                                   (35,967)                (55,140)                 17,256
                                                                     ---------               ---------               ---------
Noninterest expense:
   General and administrative:
     Compensation and employee benefits                                 42,304                  34,780                  42,570
     Occupancy                                                          18,081                  18,758                  23,939
     Federal deposit insurance premiums                                  9,145                  11,743                  12,018
     Savings Association Insurance Fund special assessment              27,410                      --                      --
     Other                                                              26,469                  22,385                  32,468
                                                                     ---------               ---------               ---------
       Total general and administrative                                123,409                  87,666                 110,995
   Provision for real estate losses                                         --                      --                   4,581
                                                                     ---------               ---------               ---------
       Total noninterest expense                                       123,409                  87,666                 115,576
                                                                     ---------               ---------               ---------
         Income before income tax expense and extraordinary items       16,949                  37,356                  74,960
Income tax expense                                                       5,835                  10,258                  25,384
                                                                     ---------               ---------               ---------
         Income before extraordinary items                              11,114                  27,098                  49,576
Extraordinary items                                                     (1,452)                     --                  (7,849)
                                                                     ---------               ---------               ---------
         Net income                                                  $   9,662               $  27,098               $  41,727
                                                                     =========               =========               =========

         Net income attributable to common stock                     $   5,452               $  22,855               $  36,543
                                                                     =========               =========               =========
Per share data:
   Primary earnings per share:
     Income before extraordinary items                                 $  0.16                 $  0.56                 $  1.17
     Extraordinary items                                                 (0.03)                     --                   (0.21)
                                                                       -------                 -------                 -------
        Net income                                                     $  0.13                 $  0.56                 $  0.96
                                                                       =======                 =======                 =======
   Fully diluted earnings per share:
     Income before extraordinary items                                 $  0.16                 $  0.56                 $  1.15
     Extraordinary items                                                 (0.03)                     --                   (0.21)
                                                                       -------                 -------                 -------
         Net income                                                    $  0.13                 $  0.56                 $  0.94
                                                                       =======                 =======                 =======

                                    See accompanying notes to consolidated financial statements.
</TABLE>

                                    51
<PAGE> 54
<TABLE>

                                         ROOSEVELT FINANCIAL GROUP, INC.
                                               AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
                                             (DOLLARS IN THOUSANDS)
<CAPTION>
                                                           Preferred stock          Common stock
                                                       --------------------    -----------------------
                                                                                                         Paid-in     Retained
                                                         Shares      Amount     Shares          Amount   capital     earnings
                                                       ----------    ------    ----------       ------   --------    --------
<S>                                                     <C>           <C>      <C>               <C>     <C>         <C>
Balance, December 31, 1993                              2,492,440     $ 25     10,291,922        $103    $179,979    $186,780
Net income (including pooled company)                          --       --             --          --          --      41,727
Issuance of 319,000 shares of 6.5% non-cumulative
  perpetual convertible preferred stock                   319,000        3             --          --      21,270          --
Issuance of common stock in the acquisition of
  Home Federal Bancorp of Missouri, Inc.                       --       --      1,121,142          11      48,220          --
Issuance of common stock for stock options and
  employee stock plans                                         --       --      1,294,991          13       5,932          --
Three-for-one stock split                                      --       --     25,157,436         252        (252)         --
Cash dividends declared (including pooled company):
    Common stock                                               --       --             --          --          --     (13,944)
    Preferred stock                                            --       --             --          --          --      (5,184)
Purchase of common stock for treasury                          --       --             --          --          --          --
Unrealized loss on securities available
  for sale, net (including pooled company)                     --       --             --          --          --          --
Other pre-merger transactions of pooled company        (1,492,440)     (15)     2,308,036          23         506          --
                                                       ----------     ----     ----------        ----    --------    --------
Balance, December 31, 1994                              1,319,000       13     40,173,527         402     255,655     209,379
Net income                                                     --       --             --          --          --      27,098
Purchase of common stock for treasury                          --       --             --          --          --          --
Issuance of common stock for stock options and
  employee stock plans                                         --       --        243,763           3       1,531      (1,572)
Issuance of common stock in the acquisition of
 Kirksville Bancshares, Inc.                                   --       --      1,521,435          15       5,426      15,475
Exchange of preferred stock for common stock              (18,000)      --         52,976          --        (231)         --
Amortization of restricted stock awards                        --       --             --          --          --          --
Cash dividends declared:
    Common stock                                               --       --             --          --          --     (22,531)
    Preferred stock                                            --       --             --          --          --      (4,243)
Unrealized gain on securities available for sale, net          --       --             --          --          --          --
                                                       ----------     ----     ----------        ----    --------    --------
Balance, December 31, 1995                              1,301,000       13     41,991,701         420     262,381     223,606
Net income                                                     --       --             --          --          --       9,662
Purchase of common stock for treasury                          --       --             --          --          --          --
Issuance of common stock for stock options and
 employee stock plans                                          --       --        219,991           2       2,748        (205)
Issuance of common stock for acquisitions                      --       --      1,925,776          19      33,155          --
Exchange of preferred stock for common stock              (12,175)      --         45,656           1          (1)         --
Amortization of restricted stock awards                        --       --             --          --          --          --
Cash dividends declared:
  Common stock                                                 --       --             --          --          --     (26,303)
  Preferred stock                                              --       --             --          --          --      (4,210)
Unrealized loss on securities available for sale, net          --       --             --          --          --          --
                                                       ----------     ----     ----------        ----    --------    --------
Balance, December 31, 1996                              1,288,825     $ 13     44,183,124        $442    $298,283    $202,550
                                                       ==========     ====     ==========        ====    ========    ========

                             See accompanying notes to consolidated financial statements.


                                                    52


</TABLE>
<TABLE>

                                         ROOSEVELT FINANCIAL GROUP, INC.
                                               AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
                                             (DOLLARS IN THOUSANDS)
<CAPTION>

                                                                                        Unrealized
                                                                                       gain (loss)
                                                                                      on securities
                                                              Treasury stock          available for     Unamortized      Total
                                                         -------------------------      sale, net       restricted    stockholders'
                                                           Shares         Amount        of taxes       stock awards      equity
                                                         ----------     ----------    -------------    ------------   ------------

<S>                                                       <C>            <C>          <C>                 <C>            <C>
Balance, December 31, 1993                                     --        $    --      $     11,575        $     --       $ 378,462
Net income (including pooled company)                          --             --                --              --          41,727
Issuance of 319,000 shares of 6.5% non-cumulative
  perpetual convertible preferred stock                        --             --                --              --          21,273
Issuance of common stock in the acquisition of
  Home Federal Bancorp of Missouri, Inc.                       --             --                --              --          48,231
Issuance of common stock for stock options and
  employee stock plans                                         --             --                --              --           5,945
Three-for-one stock split                                      --             --                --              --              --
Cash dividends declared (including pooled company):
    Common stock                                               --             --                --              --         (13,944)
    Preferred stock                                            --             --                --              --          (5,184)
Purchase of common stock for treasury                      (10,000)         (150)               --              --            (150)
Unrealized loss on securities available
  for sale, net (including pooled company)                      --            --           (35,248)             --         (35,248)
Other pre-merger transactions of pooled company                 --            --                --              --             514
                                                         ---------       -------      ------------        --------      ----------
Balance, December 31, 1994                                 (10,000)         (150)          (23,673)             --         441,626
Net income                                                      --            --                --              --          27,098
Purchase of common stock for treasury                     (214,500)       (3,426)               --              --          (3,426)
Issuance of common stock for stock options and
  employee stock plans                                     209,976         3,345                --          (1,621)          1,686
Issuance of common stock in the acquisition
 of Kirksville Bancshares, Inc.                                 --            --                --              --          20,916
Exchange of preferred stock for common stock                14,524           231                --              --              --
Amortization of restricted stock awards                         --            --                --              88              88
Cash dividends declared:
    Common stock                                                --            --                --              --         (22,531)
    Preferred stock                                             --            --                --              --          (4,243)
Unrealized gain on securities available for sale, net           --            --            35,692              --          35,692
                                                         ---------       -------      ------------        --------      ----------
Balance, December 31, 1995                                      --            --            12,019          (1,533)        496,906
Net income                                                      --            --                --              --           9,662
Purchase of common stock for treasury                      (57,000)         (923)               --              --            (923)
Issuance of common stock for stock options
 and employee stock plans                                   57,000           923                --            (242)          3,226
Issuance of common stock for acquisitions                       --            --                --              --          33,174
Exchange of preferred stock for common stock                    --            --                --              --              --
Amortization of restricted stock awards                         --            --                --             140             140
Cash dividends declared:
  Common stock                                                  --            --                --              --         (26,303)
  Preferred stock                                               --            --                --              --          (4,210)
Unrealized loss on securities available for sale, net           --            --           (14,245)             --         (14,245)
                                                         ---------       -------      ------------        --------      ----------
Balance, December 31, 1996                                      --       $    --      $     (2,226)       $ (1,635)     $  497,427
                                                         =========       =======      ============        ========      ==========




                               See accompanying notes to consolidated financial statements.
</TABLE>

                                    52
<PAGE> 55


<TABLE>
                                                   ROOSEVELT FINANCIAL GROUP, INC.
                                                          AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (in thousands)
<CAPTION>
                                                                                             Year Ended December 31,
                                                                              ----------------------------------------------------
                                                                                  1996               1995                1994
                                                                              -----------        ------------         ------------

<S>                                                                           <C>                <C>                  <C>
Cash flows from operating activities:
 Net income                                                                   $     9,662        $     27,098         $     41,727
 Adjustments to reconcile net income to net
   cash provided by operating activities:
      Extraordinary loss on early extinguishment of debt                            1,452                  --                7,849
      Recognition of previously deferred expense related to the
        termination of interest rate exchange agreements                           80,468                  --                   --
      Depreciation and amortization                                                 4,668               4,294                5,814
      Amortization of discounts and premiums, net                                  41,709               9,900               16,383
      Decrease (increase) in accrued interest receivable                            8,169              (7,645)              (2,310)
      (Decrease) increase in accrued interest payable                             (14,845)             11,119               (1,023)
      Provision for losses on loans and real estate                                 1,262               1,200               17,013
      Unrealized losses on impairment of mortgage-backed securities                    --              27,063                   --
      (Increase) in securities held for trading, net                                   --                  --              (87,138)
      Decrease in loans receivable held for sale, net                                  --                  --               86,579
      Other, net                                                                   (7,371)            (31,514)              22,674
                                                                              -----------        ------------         ------------
         Net cash provided by operating activities                                125,174              41,515              107,568
                                                                              -----------        ------------         ------------
Cash flows from investing activities:
   Principal payments and maturities of securities available for sale             228,942             126,291              313,775
   Principal payments and maturities of securities held to maturity               941,702             835,059              783,067
   Principal payments on loans                                                    897,046             699,307              727,348
   Proceeds from sales of securities available for sale                         2,317,700             945,941            2,633,590
   Proceeds from sales of loans                                                    30,211                  --                   --
   Purchase of securities available for sale                                     (617,089)           (737,735)          (2,905,255)
   Purchase of securities held to maturity                                       (573,971)         (1,234,320)          (1,312,918)
   Purchase of loans                                                             (291,556)           (321,097)            (146,772)
   Originations of loans                                                       (1,406,742)           (688,576)            (680,794)
   Fees paid for interest rate cap and floor agreements, net                      (43,642)                 --              (35,078)
   Net proceeds from sales of real estate                                          10,408              10,889                9,253
   Purchase of office properties and equipment                                     (4,890)             (2,402)              (7,556)
   (Purchase) sale of purchased mortgage servicing rights, net                    (41,846)              3,971                   --
   Cash and cash equivalents from acquisitions, net of cash paid                   11,303             (19,201)              31,087
   Payments on sales or exchanges of branch deposits, net                              --                  --              (67,337)
   Proceeds from sale of loan production facilities                                    --                  --               75,150
                                                                              -----------        ------------         ------------
         Net cash provided by (used in) investing activities                    1,457,576            (381,873)            (582,440)
                                                                              -----------        ------------         ------------
Cash flows from financing activities:
   Repayment of mortgage-backed bonds                                                  --                  --              (60,820)
   Redemption of subordinated notes                                               (28,750)                 --              (31,022)
   Defeasance of mortgage-backed bonds                                            (21,048)                 --              (72,375)
   Proceeds from FHLB advances                                                 17,952,500          15,513,000           14,551,256
   Principal payments on FHLB advances                                        (18,500,000)        (14,851,000)         (14,115,980)
   Fees paid for termination of interest rate exchange agreements, net            (50,791)                 --                   --
   Excess of deposit receipts over withdrawals (withdrawals over receipts)        210,162            (173,894)            (578,888)
   (Decrease) increase in securities sold under agreements
    to repurchase, net                                                         (1,082,098)           (125,313)             617,726
   Proceeds from issuance of preferred stock                                           --                  --               21,273
   Proceeds from exercise of stock options                                          1,920               1,107                6,459
   Purchase of treasury stock                                                        (923)             (3,426)                (150)
   Cash dividends paid                                                            (30,513)            (26,789)             (18,056)
                                                                              -----------        ------------         ------------
         Net cash (used in) provided by financing activities                   (1,549,541)            333,685              319,423
                                                                              -----------        ------------         ------------
Net increase (decrease) in cash and cash equivalents                               33,209              (6,673)            (155,449)
Cash and cash equivalents at beginning of year                                     15,433              22,106              177,555
                                                                              -----------        ------------         ------------
Cash and cash equivalents at end of year                                      $    48,642        $     15,433         $     22,106
                                                                              ===========        ============         ============
</TABLE>
                                                                    (Continued)

                                    53
<PAGE> 56

SUPPLEMENTAL DISCLOSURES RELATED TO THE CONSOLIDATED STATEMENTS OF
CASH FLOWS

The Company paid interest of $477.6 million, $455.3 million, and $348.6
million during 1996, 1995, and 1994, respectively.  The Company paid income
taxes of $28.7 million, $37.1 million, and $6.5 million during 1996, 1995,
and 1994, respectively.

<TABLE>
Cash and cash equivalents obtained from acquisitions, net of cash paid, are
summarized as follows:

<CAPTION>
                                                                                      YEAR ENDED DECEMBER 31,
                                                                      ---------------------------------------------------
                                                                         1996                1995                 1994
                                                                         ----                ----                 ----
                                                                                        (in thousands)

<S>                                                                   <C>                 <C>                 <C>
   Fair value of assets purchased                                     $(267,477)          $ (98,763)          $  (556,990)
   Liabilities assumed                                                  234,303              73,731               491,755
   Issuance of common stock                                              33,174                 --                 48,231
                                                                      ---------           ---------           -----------
   Cash received (paid) from acquisitions                                    --             (25,032)              (17,004)
   Cash and cash equivalents acquired                                    11,303               5,831                48,091
                                                                      ---------            --------           -----------
   Cash and cash equivalents from acquisitions,
       net of cash paid                                               $  11,303           $ (19,201)          $    31,087
                                                                      =========           =========           ===========

Noncash investing and financing activities are summarized below:

<CAPTION>
                                                                                      YEAR ENDED DECEMBER 31,
                                                                      ---------------------------------------------------
                                                                         1996                1995                 1994
                                                                         ----                ----                 ----
                                                                                        (in thousands)

<S>                                                                   <C>                 <C>                 <C>
   Noncash transfers from securities held for
      trading to securities available for sale                        $      --            $     --           $   242,429
   Noncash transfers from securities available for
      sale to securities held to maturity                                    --                  --               107,318
   Noncash transfers from securities held to maturity to
      securities available for sale                                   3,169,728              85,165                26,368
   Desecuritization resulting in transfer of mortgage-backed
      securities held to maturity to loans and real estate owned             --              33,603                    --
   Securitization of loans held for sale                                210,083                  --                    --
   Redesignation of interest rate exchange and cap agreements to
      securities available for sale                                      42,131               4,369                    --



                                 See accompanying notes to consolidated financial statements.
</TABLE>

                                    54
<PAGE> 57


                  ROOSEVELT FINANCIAL GROUP, INC.
                          AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of Roosevelt
Financial Group, Inc. (the Company); its three wholly-owned subsidiaries,
Roosevelt Bank (the Bank), Missouri State Bank and Trust Company (MSB), a
Missouri-chartered bank, and F & H Realty (Realty), a Missouri-chartered real
estate investment company; and the Bank's and MSB's wholly-owned
subsidiaries.  All significant intercompany accounts and transactions have
been eliminated in consolidation. Certain reclassifications have been made to
the 1995 and 1994 consolidated financial statements to conform to the 1996
presentation. Results of operations of companies acquired and accounted for
as purchases are included from their respective dates of acquisition. When
acquired in a pooling of interests transaction, current and prior period
financial statements are restated to include the accounts of the acquired
companies, if significant.

In preparing the consolidated financial statements, management of the Company
is required to make estimates and assumptions which significantly affect
the reported amounts in the consolidated financial statements. Significant
estimates which are particularly susceptible to change in a short period
of time include the determination of the allowances for losses on loans and
real estate.

Investment and Mortgage-Backed Securities

At the time of purchase, debt and equity securities are segregated into one
of three categories: trading, held to maturity, or available for sale.

Trading securities are purchased and held principally for the purpose of
reselling them within a short period of time. Unrealized gains and losses
on trading securities are included in earnings.

Securities classified as held to maturity are accounted for at cost, adjusted
for the amortization of premiums and accretion of discounts which are
recognized in interest income over the period to maturity for investment
securities, or the estimated life of mortgage-backed securities using the
level-yield method because the Company has both the ability and the intent to
hold such securities to maturity.

Securities not classified as either trading or held to maturity are
considered to be available for sale. Gains and losses realized on the sale of
these securities are based on the specific identification method. Unrealized
gains and losses on available for sale securities are excluded from earnings
and reported as a net amount as a separate component of stockholders' equity
until realized.

Unrealized losses on all debt securities are recognized if any market
valuation differences are deemed to be other than temporary.

Derivative Financial Instruments

The Company uses derivative financial instruments as part of its overall
interest rate risk strategy.  Derivative financial instruments which have
been utilized by the Company include interest rate exchange agreements
(swaps), interest rate cap, floor, and collar agreements, and to a lesser
extent, financial futures contracts.  Interest rate swap, cap, floor, and
collar agreements have been used to synthetically alter the rate and/or term
characteristics of specified interest-bearing assets or liabilities.
Financial futures contracts have been used to achieve a position whereby the
estimated exposure of a certain position to interest rate movements is offset
by approximately equal, but opposite, results in the financial futures
contracts.

                                    55
<PAGE> 58

Interest rate swaps are agreements to exchange interest payment streams on an
agreed upon notional amount.  Typically, the Company pays a fixed rate and
receives a variable rate based upon a specified floating rate index.  The
Company makes no interest payments on its interest rate cap, floor, and collar
agreements but is entitled to receive an interest payment on an agreed upon
notional amount when the agreements are "in the money" (e.g. when the
specified floating rate index exceeds or falls below, respectively, a rate
specified in the agreement).  All such receipts or payments are recorded as a
net component of interest expense in the accompanying consolidated financial
statements.

The Company has entered into interest rate swap, cap, floor, or collar
agreements with nationally recognized commercial and investment banking firms
or the Federal Home Loan Bank.  Typically, the Company pays a fee (premium)
to enter an interest rate cap, floor, or collar agreement which is capitalized
and then amortized over the life of the agreement on a straight-line basis.
No such premium is paid to enter into swap agreements.  At the time the
agreements are initiated, the Company designates which assets or liabilities
are being synthetically altered by the agreement.  Agreements which have been
designated against available for sale assets are thereafter reported at their
fair value with unrealized gains or losses reflected as a separate component
of stockholders' equity.  Agreements designated against other
interest-bearing assets or liabilities are reported at amortized cost.

Gains and losses resulting from terminated interest rate swap agreements or
interest rate cap, floor, and collar agreements that are in the money are
recognized consistent with the gain or loss on the asset or liability that
was being synthetically altered by the agreement.  To the extent that the
designated asset or liability still exists, any gain or loss on the
termination of the agreement is deferred and amortized over the shorter term
of the remaining contractual life of the agreement or remaining life of the
asset or liability.  Gains and losses resulting from terminated interest
rate cap, floor, and collar agreements that are not in the money are
recognized at the time of termination.  Interest rate cap, floor, and
collar agreements may be redesignated to different assets or liabilities
during their lives.  At the time of redesignation, the agreements are
marked-to-market with the resulting gain or loss being deferred and
amortized as if the agreement were canceled.

Gains or losses on financial futures contracts which qualify as hedges are
deferred. The unamortized balance of such deferred gains or losses is applied
to the carrying value of the hedged items. Amortization of the net deferred
gains or losses is applied to the interest component of the hedged items
using the level-yield method. Gains or losses in the market value of
financial futures contracts which do not qualify for hedge accounting are
recognized currently.

Loans

Loans are stated at the principal amount outstanding, net of deferred loan
fees, allowance for losses, and any discounts or premiums on purchased loans.
The deferred fees, discounts, and premiums are amortized using the
level-yield method over the estimated life of the loan.

Generally, a loan is classified as nonaccrual and the accrual of interest on
such loan is discontinued when the contractual payment of principal or
interest has become more than 90 days past due or management has serious
doubts about further collectibility of principal or interest, even though the
loan is currently performing. When a loan is placed on nonaccrual status,
accrued but unpaid interest is reversed. Generally, loans are restored to
accrual status when the obligation is brought current, has performed in
accordance with the contractual terms for a reasonable period of time, and the
ultimate collectibility of the total contractual principal and interest is no
longer in doubt.

Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for Impairment of a
Loan", as amended by Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures" (collectively SFAS 114). SFAS 114 addresses the accounting by
creditors for impairment of certain loans by specifying how the allowance for
loan losses related to such loans should be determined.  As SFAS 114 does not
apply to residential

                                    56
<PAGE> 59

mortgage and consumer loans which are collectively evaluated for impairment
and which represent in excess of 95% of the Company's total loan portfolio,
the initial and continuing application of SFAS 114 has had no significant
impact on the Company's consolidated financial statements. Relative to the
Company's commercial real estate loan portfolio, a loan is considered to be
impaired when it is probable that the Bank will be unable to collect all
amounts due according to the contractual terms of the loan agreement.
Impairment is measured based on the underlying value of the collateral.

Loans Serviced for Others

Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 122, "Accounting for Mortgage Servicing Rights"
(SFAS 122).  Accordingly, the Company recognizes as separate assets the
rights to service mortgage loans, whether the rights are acquired through
purchases of servicing or through the origination or purchase of loans with a
definitive plan to sell or securitize the loans with servicing retained.  The
fair value of capitalized servicing rights assigned to such purchased or
originated loans is based upon the present value of estimated future cash
flows associated with the servicing.  SFAS 122 also requires that an
enterprise assess its capitalized mortgage servicing rights for impairment
based upon the fair value of those rights.  For purposes of measuring
impairment, the Company stratifies its servicing rights based upon the
interest rate characteristics of the underlying loans, and compares the fair
value for each strata to the unamortized recorded value.  The fair value is
based upon the net present value of expected future cash flows discounted at
a rate commensurate with the risks involved.  The Company's adoption of SFAS
122 did not have a material impact on the Company's consolidated financial
statements.

Servicing fees related to loans serviced for others are recognized when loan
payments are received. Ancillary income from loan servicing is recorded when
received. Operational costs to service such loans are charged to expense as
incurred and are included in general and administrative expenses in the
accompanying consolidated statements of operations.

The capitalized costs of mortgage servicing rights are amortized over the
estimated remaining lives of the underlying loans using the level-yield
method.  Amortization of mortgage servicing rights is recorded as a component
of "Loan servicing fees, net" in the consolidated statements of operations.

Real Estate Owned

Real estate owned includes properties acquired through foreclosure and
properties acquired for development and sale. Real estate acquired through
foreclosure is transferred to real estate owned at fair value, which
represents the new recorded basis of the property. Subsequently, properties
are evaluated and any additional declines in value are provided for in an
allowance for losses on real estate. Real estate acquired for development and
sale is carried at the lower of cost or net realizable value.

Allowances for Losses

Allowances for losses on loans and real estate owned are established when a
loss is probable and can be reasonably estimated. These allowances are
provided based on past experience and the prevailing market conditions.
Management's evaluation of loss considers various factors including, but not
limited to, general economic conditions, loan portfolio composition, prior
loss experience, estimated sales price, and holding and selling costs.
Provisions for loan losses are recorded to maintain the Company's overall
allowance for loan losses within an acceptable range to cover probable credit
losses inherent in the portfolio.

Management believes that the allowances for losses on loans and real estate
owned are adequate. While management uses available information to recognize
losses, future additions to the allowances may be necessary based on changes
in economic conditions.

                                    57
<PAGE> 60

Office Properties and Equipment

Office properties and equipment are stated at cost, less accumulated
depreciation and leasehold amortization.  Depreciation of office buildings
and improvements and furniture and equipment is computed on the straight-line
method over the estimated useful lives of the related assets. Leasehold
improvements are amortized over the shorter of their estimated useful lives
or the term of the related lease.

Income Taxes

Income taxes are accounted for using the asset and liability method. Under
this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to the differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

Earnings Per Share

Net income for primary earnings per share is adjusted for the dividends on
convertible preferred stock.  The average number of common shares and common
equivalent shares outstanding for 1996, 1995, and 1994 was 42,698,851,
40,620,932, and 37,943,933, respectively.

Fully diluted earnings per share has been computed using the weighted average
number of common shares and common equivalent shares, including the effect of
the assumed conversion of convertible preferred stock into common stock, if
dilutive.  The average number of common shares and common equivalent shares
outstanding for 1996, 1995, and 1994 for the purpose of calculating fully
diluted earnings per share was 42,731,792, 40,628,697, and 39,005,360,
respectively.

Cash Flows

For the purpose of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks, and other highly liquid debt instruments
with an initial maturity of three months or less.

Impact of Prospective Accounting Pronouncements

During June 1996, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinquishments of
Liabilities" (SFAS 125).  SFAS 125 provides accounting and reporting
standards for transfers and servicing of financial assets and extinguishments
of liabilities based on consistent application of a financial components
approach that focuses on control.  It distinguishes transfers of financial
assets that are sales from transfers that are secured borrowings.  Under the
financial components approach, after a transfer of financial assets, an
entity recognizes all financial and servicing assets it controls and
liabilities it has incurred and derecognizes financial assets it no longer
controls and liabilities that have been extinguished.  The financial
components approach focuses on the assets and liabilities that exist after
the transfer.  Many of these assets and liabilities are components of
financial assets that existed prior to the transfer.  If a transfer does not
meet the criteria for a sale, the transfer is accounted for as a secured
borrowing with pledge of collateral.

SFAS 125 extends the "available-for-sale" or "trading" approach in SFAS 115
to nonsecurity financial assets that can contractually be prepaid or
otherwise settled in such a way that the holder of the asset would not
recover substantially all of its recorded investment.  Thus, nonsecurity
financial assets (no matter how acquired) such as loans, other receivables,
interest-only strips, or residual interests in securitization trusts that are
subject to

                                    58
<PAGE> 61

prepayment risk that could prevent recovery of substantially all of
the recorded amount are to be reported at fair value with the change in
fair value accounted for depending on the asset's classification as
"available-for-sale" or "trading".  SFAS 125 also amends SFAS 115 to prevent
a security from being classified as held-to-maturity if the security can be
prepaid or otherwise settled in such a way that the holder of the security
would not recover substantially all of its recorded investment.

SFAS 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996, and is to
be applied prospectively.  Earlier or retroactive application is not
permitted.  Also, the extension of the SFAS 115 approach to certain
nonsecurity financial assets and the amendment to SFAS 115 is effective for
financial assets held on or acquired after January 1, 1997.
Reclassifications that are necessary because of the amendment do not call
into question an entity's intent to hold other debt securities to maturity in
the future.  The adoption of SFAS 125 is not expected to have a material
impact on the Company's financial statements.

(2)  BUSINESS COMBINATIONS

During the fourth quarter of 1996, the Company completed the acquisitions of
Community Charter Corporation (CCC), Sentinel Financial Corporation
(Sentinel), and Mutual Bancompany, Inc. (Mutual).  A total of 1,925,776
shares of the Company's common stock were issued in connection with these
acquisitions. Total assets of the acquired institutions were approximately
$269.4 million. These transactions were structured to qualify as tax free
reorganizations and were accounted for under the purchase method of
accounting.  Operating results of the acquired entities are included in the
accompanying consolidated statements of operations from their respective
acquisition dates and are not material to the consolidated financial
statements.

During the fourth quarter of 1995, the Company completed the acquisitions of
Kirksville Bancshares, Inc. (Kirksville) and WSB Bancorp, Inc. (WSB).  A
total of 1,521,435 shares of the Company's common stock were issued in
connection with the Kirksville transaction, which was accounted for as a
pooling of interests.  The Company paid a total cash consideration of
approximately $25.0 million in a purchase transaction to acquire WSB.  Total
assets of the acquired institutions were approximately $227.6 million.  These
transactions were structured to qualify as tax free reorganizations.  The
effect of these transactions was not material to the consolidated financial
statements and operating results of the acquired entities are included since
the respective acquisition dates.

On June 30, 1994, the Company completed the acquisition of Farm & Home
Financial Corporation (Farm & Home) whose assets totaled $3.1 billion.  As a
result of this transaction, the Company issued 17,993,838 shares of common
stock.   The transaction was structured to qualify as a tax free
reorganization.   The transaction was accounted for as a pooling of interests
and, accordingly, the consolidated financial statements of the Company
include the results of Farm & Home for all periods presented.

<TABLE>
Other acquisition and sale activity of Farm & Home during 1994 is summarized
as follows:

<CAPTION>

                      Nature                           Items Sold,
Date              of Transactions                  Purchased, or Exchanged                      Cash Consideration
----              ---------------                  -----------------------                      ------------------
<S>               <C>                              <C>                                          <C>
July 1, 1994      Sale of loan production          $75.2 million of Texas home builder          Received $75.2 million
                  business in Texas                lines of credit and six land acquisition
                                                   and development/rehab loans

June 24, 1994     Sale of Corpus Christi, Texas    $54.8 million of branch deposits             Paid $53.9 million
                  branch facility and deposit      and $927,000 of related deposit
                  accounts                         account loans and furniture and
                                                   fixtures

June 3, 1994      Sale of deposit accounts         $13.6 million of branch deposits             Paid $13.4 million
                  of branch                        and $177,000 of related deposit
                                                   account loans
</TABLE>

                                    59
<PAGE> 62

On April 22, 1994, the Company completed the acquisition of Home Federal
Bancorp of Missouri, Inc. (Home Bancorp).  Each holder of the common stock of
Home Bancorp received 0.4945 of a share of common stock of the Company on a
pre-split basis and $7.50 in cash for each share of Home Bancorp common stock
held for a total consideration of $68.3 million.  Home Bancorp's total
consolidated assets were $532.7 million.  The transaction was structured to
qualify as a tax free reorganization.  The transaction was accounted for
under the purchase method of accounting.  Operating results of Home Bancorp
are included since the acquisition date.

                                    60
<PAGE> 63
(3)  FAIR VALUE CONSOLIDATED BALANCE SHEETS

The Company's primary objective in managing interest rate risk is to position
the Company such that changes in interest rates do not have a material
adverse impact upon the net market value of the Company.  Net market value
considers the fair value of financial instruments (assets, liabilities, and
off-balance-sheet items), in contrast to the accompanying consolidated
balance sheets which are historical cost based.  The estimated fair values of
the Company's assets and liabilities, and the related carrying amounts from
the accompanying consolidated balance sheets, are as follows (in thousands):
<TABLE>
<CAPTION>

                                                                  DECEMBER 31, 1996            DECEMBER 31, 1995
                                                             --------------------------   ---------------------------
                                                               CARRYING        FAIR         CARRYING         FAIR
                                                                AMOUNT         VALUE         AMOUNT          VALUE
                                                             -----------    -----------   -----------     -----------
<S>                                                          <C>            <C>           <C>             <C>
ASSETS:
Cash and cash equivalents                                    $    48,642    $    48,642   $    15,433     $    15,433
Securities available for sale:
    Investment securities                                        183,227        183,227       159,857         159,857
    Mortgage-backed securities                                 2,915,521      2,915,521     1,433,648       1,433,648
    Interest rate exchange, cap, and floor agreements             59,009         59,009        12,956          12,956
Securities held to maturity:
    Investment securities                                             --             --       119,186         120,517
    Mortgage-backed securities                                        --             --     3,430,954       3,431,341
Loans                                                          4,298,469      4,387,911     3,577,892       3,708,014
Office properties and equipment, net                              54,966         55,762        52,466          53,262
Deferred losses on interest rate exchange agreements                  --             --        20,831              --
Unamortized fees on interest rate
    cap, floor, and collar agreements                             14,004         10,378        38,049          37,302
Other assets                                                     222,574        199,326       151,789         159,548
                                                             -----------    -----------   -----------     -----------
                                                             $ 7,796,412    $ 7,859,776   $ 9,013,061     $ 9,131,878
                                                             ===========    ===========   ===========     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits                                                     $ 5,347,071    $ 5,355,106   $ 4,907,497     $ 4,954,183
Securities sold under agreements to repurchase                     3,095          3,095     1,082,814       1,083,048
Advances from Federal Home Loan Bank                           1,837,756      1,837,556     2,377,138       2,378,419
Other borrowings                                                      --             --        47,523          50,260
Deferred gains on interest rate exchange agreements                   --             --         5,661              --
Interest rate exchange agreements                                     --             --            --         108,698
Other liabilities                                                111,063        139,629        95,522          95,292
                                                             -----------    -----------   -----------     -----------
    Total liabilities                                          7,298,985      7,335,386     8,516,155       8,669,900
Net market value                                                      --        524,390            --         461,978
Stockholders' equity                                             497,427             --       496,906              --
                                                             -----------    -----------   -----------     -----------
                                                             $ 7,796,412    $ 7,859,776   $ 9,013,061     $ 9,131,878
                                                             ===========    ===========   ===========     ===========
NON-FINANCIAL INSTRUMENTS:
Demand deposits                                              $        --    $    33,161   $        --     $    19,552
Commitments to extend credit                                 $   111,584    $   111,498   $   225,324     $   225,752
                                                             ===========    ===========   ===========     ===========
</TABLE>

                                    61
<PAGE> 64

Net market value is not intended to represent the value of the Company's
stock or the amounts distributable to stockholders in connection with a sale
of the Company or in the unlikely event of its liquidation. Such amounts
ascribe no value to intangible assets or to the going concern value of the
enterprise.

The following methods and assumptions were used by the Company in estimating
fair value disclosures:

Cash and cash equivalents - Due to the short-term nature of these financial
instruments, carrying value approximates fair value.

Investment securities and mortgage-backed securities - Fair values are based
on quoted market prices or dealer quotes.  Where such quotes are not
available, fair value is estimated using quoted market prices for similar
securities, or in limited instances discounted cash flow analyses.  Stock in
the Federal Home Loan Bank is valued at cost, which represents redemption
value and approximates fair value.

Interest rate exchange, cap, floor, and collar agreements - The fair values
of these agreements, are estimated by comparing the contractual rates the
Company is paying or receiving to market rates quoted on new agreements
with similar maturities by counterparties of similar creditworthiness.

Loans - The fair value of loans is estimated by discounting future cash flows
at market interest rates for loans of similar credit risk, terms, and
maturities, taking into consideration repricing characteristics and
prepayment risk.

Office properties and equipment - The fair value of office properties is
estimated based upon in-house appraised values for the Company's properties.
The net book value of office equipment is assumed to approximate its fair
value.

Other assets and liabilities - The estimated fair value of other assets,
which includes intangibles, and real estate owned, and other liabilities
represents the sum of all contractual financial receivables or obligations
adjusted for the tax effects.

Deposits with defined maturities - The fair value of certificates of deposit
accounts is based on the discounted values of contractual cash flows using
rates currently offered in the marketplace for accounts of similar remaining
maturities.

Deposits without defined maturities - For the purposes of calculating "Net
Market Value," no consideration is given to the economic value of the Bank's
long-term relationships with its depositors.  For deposit liabilities without
defined maturities, fair value is assumed to be the amount payable on demand
at the reporting date.  By ignoring what is commonly referred to as a core
deposit intangible, no consideration is given to the present value of the
Company's expected future profitability derived from those customer
relationships.  However, such value as calculated by the Company is
disclosed, net of applicable income taxes, under the heading "Non-Financial
Instruments."  The aforementioned value has been calculated by comparing the
rates paid on deposits to a rate paid on a wholesale borrowing having a
maturity equal to the expected maturity of the deposits reduced by the cost
to service and insure such deposits.

Securities sold under agreements to repurchase - Fair values are based on the
discounted value of contractual cash flows using dealer quoted rates for
agreements of similar terms and maturities.

Advances from Federal Home Loan Bank - The fair value of advances from the
Federal Home Loan Bank (FHLB) is based on discounted values of contractual
cash flows using rates currently offered in the marketplace for instruments
with similar terms and maturities.

Other borrowings - Fair values are based on quoted market prices, dealer
quotes, or on the discounted values of contractual cash flows using market
derived spreads.

                                    62
<PAGE> 65

Commitments to extend credit - The fair value of commitments is estimated
using the fees currently charged to enter into similar agreements, taking
into account the remaining terms of the agreements and the present
creditworthiness of the counterparties.  For fixed-rate loan commitments,
fair value also considers the difference between current levels of interest
rates and the committed rates.

Income taxes - The estimated income tax effects arising from the differences
between fair values and tax bases of financial instruments is calculated and
included in the fair value disclosure of other assets or other liabilities.
The effect of the restoration to taxable income of the Bank's bad debt
reserves for income tax purposes resulting from the unlikely event of
liquidation has not been included.

(4)  SECURITIES AVAILABLE FOR SALE

The amortized cost and market value of securities available for sale at
December 31, 1996 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                   GROSS         GROSS
                                                                  AMORTIZED     UNREALIZED     UNREALIZED      MARKET
                                                                    COST          GAINS          LOSSES         VALUE
                                                                -----------     ----------     ----------    ----------
                                                                                    (in thousands)

<S>                                                             <C>                <C>          <C>          <C>
Investment Securities:
  U.S. Government and agency obligations                        $    12,113        $   292      $     (7)    $   12,398
  Corporate securities                                               14,280          1,041          (284)        15,037
                                                                  ---------         ------       -------      ---------
                                                                     26,393          1,333          (291)        27,435
  FHLB stock                                                        155,792             --            --        155,792
                                                                  ---------         ------       -------      ---------
                                                                    182,185          1,333          (291)       183,227
                                                                  ---------         ------       -------      ---------
 Mortgage-backed Securities:
   Mortgage-backed certificates:
    GNMA                                                            105,705          2,481          (251)       107,935
    FNMA                                                            128,557          1,713          (456)       129,814
    FHLMC                                                           135,524          2,207        (1,510)       136,221
   Private pass-throughs                                          2,331,504         18,713       (15,600)     2,334,617
   Collateralized mortgage obligations                              170,219          1,889        (3,747)       168,361
   Other                                                             35,274          3,942          (643)        38,573
   Derivative financial instruments:
     Interest rate cap agreements                                    71,410            550       (14,627)        57,333
     Interest rate floor agreements                                     145          1,531            --          1,676
                                                                  ---------         ------       -------      ---------
                                                                  2,978,338         33,026       (36,834)     2,974,530
                                                                  ---------         ------       -------      ---------
                                                                 $3,160,523        $34,359      $(37,125)    $3,157,757
                                                                  =========         ======       =======      =========
</TABLE>

                                    63
<PAGE> 66

The amortized cost and market value of securities available for sale at
December 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                   GROSS         GROSS
                                                                  AMORTIZED     UNREALIZED     UNREALIZED      MARKET
                                                                    COST          GAINS          LOSSES         VALUE
                                                                -----------     ----------     ----------    ----------
                                                                                    (in thousands)

<S>                                                              <C>               <C>          <C>          <C>
Investment Securities:
  U.S. Government and agency obligations                         $   10,671        $   439      $    (25)    $   11,085
  Corporate securities                                               14,882          1,887            (6)        16,763
                                                                  ---------         ------       -------      ---------
                                                                     25,553          2,326           (31)        27,848
  FHLB stock                                                        132,009             --            --        132,009
                                                                  ---------         ------       -------      ---------
                                                                    157,562          2,326           (31)       159,857
                                                                  ---------         ------       -------      ---------
 Mortgage-backed Securities:
  Mortgage-backed certificates:
     GNMA                                                           694,541         17,996          (538)       711,999
     FNMA                                                           342,405          4,440          (313)       346,532
     FHLMC                                                          308,839          6,380          (803)       314,416
  Other                                                              59,512          3,090        (1,901)        60,701
  Derivative financial instruments:
     Interest rate exchange agreements                               (4,294)            --        (2,234)        (6,528)
     Interest rate cap agreements                                    23,997             --       (15,259)         8,738
     Interest rate floor agreements                                   4,271          6,475            --         10,746
                                                                  ---------         ------       -------      ---------
                                                                  1,429,271         38,381       (21,048)     1,446,604
                                                                  ---------         ------       -------      ---------
                                                                 $1,586,833        $40,707      $(21,079)    $1,606,461
                                                                  =========         ======       =======      =========
</TABLE>

The amortized cost and market value of debt securities available for sale
at December 31, 1996, by contractual maturity, are summarized as follows:
<TABLE>
<CAPTION>
                                                                   AMORTIZED       MARKET
                                                                     COST          VALUE
                                                                   ---------      -------
                                                                       (in thousands)

<S>                                                             <C>            <C>
Due in one year or less                                         $     3,860    $     3,868
Due after one year through five years                                21,374         22,220
Due after five years through ten years                                1,126          1,313
Due after ten years                                                      33             34
                                                                 ----------     ----------
                                                                     26,393         27,435
Mortgage-backed securities                                        2,978,338      2,974,530
                                                                 ----------     ----------
                                                                $ 3,004,731    $ 3,001,965
                                                                 ==========     ==========
</TABLE>

At December 31, 1996 and 1995, accrued interest receivable on securities
available for sale totaled $19.9 million and $8.0 million, respectively.

Securities available for sale with an amortized cost and approximate market
value of $1.2 billion and $1.1 billion at December 31, 1996 and 1995,
respectively, were pledged to secure deposits and advances from the FHLB.

Gross realized gains on the sale of or early redemption by the issuer of
securities available for sale totaled $27.8 million, $25.0 million, and $15.4
million for 1996, 1995, and 1994, respectively.  Gross realized losses on
such securities totaled $18.6 million, $1.1 million, and $43.6 million for
1996, 1995, and 1994, respectively.

                                    64
<PAGE> 67

(5)  SECURITIES HELD TO MATURITY

In December 1996, the Company reclassified its entire investment and
mortgage-backed securities portfolios from held to maturity to available for
sale.  The securities transferred consisted of investment securities with
approximate amortized cost and market values of $114.3 million and $114.9
million, respectively, and mortgage-backed securities with approximate
amortized cost and market values of $3.1 billion.  This action was taken to
provide the Company maximum flexibility to manage its portfolio.

The amortized cost and market value of securities held to maturity at
December 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                   GROSS         GROSS
                                                                  AMORTIZED     UNREALIZED     UNREALIZED      MARKET
                                                                    COST          GAINS          LOSSES         VALUE
                                                                -----------     ----------     ----------    ----------
                                                                                    (in thousands)

<S>                                                             <C>               <C>         <C>          <C>
Investment Securities:
  U.S. Government and agency obligations                        $   113,554        $  1,242    $      --     $   114,796
  Corporate securities                                                5,632              89           --           5,721
                                                                  ---------         -------      -------       ---------
                                                                    119,186           1,331           --         120,517
                                                                  ---------         -------      -------       ---------
Mortgage-backed Securities:
  Mortgage-backed certificates:
     GNMA                                                            13,895             177         (243)         13,829
     FNMA                                                           131,874           1,919         (422)        133,371
     FHLMC                                                          239,026           3,287         (742)        241,571
  Private pass-throughs                                           2,705,311          21,618      (21,758)      2,705,171
  Collateralized mortgage obligations                               340,848           2,556       (6,005)         37,399
                                                                  ---------         -------     --------       ---------
                                                                  3,430,954          29,557      (29,170)      3,431,341
                                                                  ---------         -------     --------       ---------
                                                                $ 3,550,140        $ 30,888    $ (29,170)    $ 3,551,858
                                                                  =========         =======     ========      ==========
</TABLE>

At December 31, 1995, accrued interest receivable on securities held to
maturity totaled $23.1 million.

Securities held to maturity with an amortized cost and approximate market
value of $1.4 billion at December 31, 1995, were pledged to secure
securities sold under agreements to repurchase, other borrowings, and
interest rate exchange agreements.

During 1995, certain private issuer mortgage-backed securities held by the
Company were determined to be other than temporarily impaired. As a result,
the Company recorded a $27.1 million pre-tax write-down ($17.8 million after
tax) to reflect the impairment of such securities.  The amount of the
write-down was based on discounted cash flow analyses performed by
management (based upon assumptions regarding delinquency levels, foreclosure
rates, and loss ratios on REO disposition in the underlying portfolio).
Discounted cash flow analyses were utilized to estimate fair value due to
the absence of a ready market for the securities.

On November 15, 1995, the FASB issued a special report, "A Guide to
Implementation of Statement 115 on Accounting for Certain Investments in Debt
and Equity Securities, Questions and Answers" (the Report).  The Report was
issued as an aid in understanding and implementing SFAS 115.  The Report
provided transition guidance for an enterprise that adopted SFAS 115 prior to
the issuance of the Report.  The guidance allowed a one-time reassessment of
the classification of securities as of a single measurement date without
tainting the classification of the remaining held to maturity debt securities.
Such reassessment and transfers were to be completed no later than December 31,
1995.  On December 31, 1995, the Company transferred into the available for
sale portfolio from the held to maturity category mortgage-backed securities
with an amortized cost and market value of $67.5 million and investment
securities with an amortized cost and market value of $17.6 million.

                                    65
<PAGE> 68

(6)  LOANS

Loans are summarized as follows:
<TABLE>
<CAPTION>

                                                                         DECEMBER 31,
                                                               ------------------------------
                                                                  1996                1995
                                                               -----------        -----------
                                                                        (in thousands)
<S>                                                            <C>                <C>
   Real Estate:
     Residential                                               $ 3,791,145        $ 3,320,098
     Commercial                                                    153,375            137,507
     Construction                                                   27,876             11,969
   Consumer loans                                                  348,280            125,633
                                                                ----------         ----------
                                                                 4,320,676          3,595,207
   Add (Deduct):
     Loans in process                                              (10,131)            (4,266)
     Purchased loan premiums                                        21,914             17,359
     Unearned discounts                                           (12,283)             (9,105)
     Deferred loan costs                                             1,012                552
     Allowance for losses                                          (22,719)           (21,855)
                                                                ----------         ----------
                                                               $ 4,298,469        $ 3,577,892
                                                                ==========         ==========
Weighted average interest rate at end of year                         7.69%              7.58%
                                                                      ====               ====
</TABLE>

Gross loans at December 31, 1996, by contractual maturity, were as follows
(in thousands):
<TABLE>
<CAPTION>


                                         Residential     Commercial     Construction    Consumer        Total
                                         -----------     ----------     ------------    --------        -----
<S>                                     <C>              <C>             <C>           <C>          <C>
Adjustable-rate loans:
  Due within one year                   $    31,088      $   4,553       $  7,282      $ 138,245    $   181,168
  After one but within five years             9,438         14,274          1,762          8,528         34,002
  After five but within ten years            32,430         11,616            138         59,530        103,714
  After ten years                         2,525,202         14,356             --          6,533      2,546,091
                                          ---------        -------        -------       --------     ----------
                                          2,598,158         44,799          9,182        212,836      2,864,975
                                          ---------        -------        -------       --------     ----------
Fixed-rate loans:
  Due within one year                        11,370          7,239         17,705         18,179         54,493
  After one but within five years            33,017         55,413            989         90,879        180,298
  After five but within ten years           104,116         38,654             --          5,442        148,212
  After ten years                         1,044,484          7,270             --         20,944      1,072,698
                                          ---------        -------        -------       --------     ----------
                                          1,192,987        108,576         18,694        135,444      1,455,701
                                          ---------        -------        -------       --------     ----------
                                        $ 3,791,145      $ 153,375       $ 27,876      $ 348,280    $ 4,320,676
                                          =========        =======        =======       ========     ==========
</TABLE>

At December 31, 1996 and 1995, accrued interest receivable on loans totaled
approximately $25.7 million and $22.3 million, respectively.

Nonaccrual loans totaled $12.2 million, $9.5 million, and $7.6 million at
December 31, 1996, 1995, and 1994, respectively.  If interest on these loans
had been recognized, such income would have been $924,000, $1.1 million, and
$686,000 for 1996, 1995, and 1994, respectively. During 1996, 1995, and 1994
these nonaccrual loans contributed $246,000, $203,000, and $221,000 to
interest income, respectively. In addition, at December 31, 1996, 1995, and
1994 the Company had troubled debt restructurings aggregating $53,000,
$661,000, and $2.8 million, respectively.  During 1996, 1995, and 1994, these
troubled debt restructurings contributed $22,000, $175,000, and $184,000 to
interest income, respectively.  Had these loans not been restructured,
interest income would have been $26,000, $211,000, and $222,000 for 1996,
1995, and 1994, respectively.

As of December 31, 1996, the Company had outstanding commitments to originate
fixed-rate mortgage loans of approximately $27.8 million, adjustable-rate
mortgage loans of approximately $66.5 million, fixed-rate residential
construction loans of approximately $11.3 million, and adjustable-rate
residential construction loans of approximately $4.3 million.  The Company
also had outstanding commitments to originate fixed-rate non-residential
construction loans of approximately $484,000 and variable-rate
non-residential construction loans of approximately $1.2 million.
Commitments to extend credit may involve, to varying degrees, elements of
credit risk and interest rate risk in excess of the amount recognized in the
consolidated balance sheets.  The amount of credit loss in the event of
nonperformance by the other party to the commitment is represented by the
contractual amount of the commitment.  Interest rate risk on commitments to
extend credit results from the possibility that interest rates may have moved
unfavorably from the position of the Company since the time the commitment was
made.

                                    66
<PAGE> 69

The Company services mortgage loans for its own account and also services
mortgage loans for third-party investors under loan servicing agreements.
Pursuant to these agreements, the Company typically collects from the
borrower monthly payments of principal and interest on mortgage loans and
additional amounts towards payment of real estate taxes and insurance.  The
Company retains its servicing fee from such payments and remits the balance
of the principal and interest payments to the investors in the mortgage loans
or associated mortgage-backed securities.  At December 31, 1996 and 1995, the
Company serviced 116,882 mortgage loans totaling $8.4 billion and 78,698
mortgage loans totaling $5.0 billion, respectively. Of these amounts, $3.5
billion and $3.0 billion were serviced on the Company's own behalf at
December 31, 1996 and 1995, respectively.

Activity in mortgage servicing rights originated and purchased, which is
recorded in other assets in the accompanying consolidated balance sheets, is
summarized as follows:
<TABLE>
<CAPTION>

                                                                        Year Ended December 31,
                                                               ---------------------------------------
                                                                  1996           1995           1994
                                                               ---------       --------       --------
                                                                             (in thousands)

<S>                                                            <C>             <C>            <C>
Balance, beginning of year                                     $  15,862       $ 22,556       $ 28,117
Purchases                                                         41,846            812             --
Originations                                                       1,252             --             --
Sales                                                                 --         (3,273)            --
Amortization                                                      (6,570)        (4,233)        (5,561)
                                                                  ------         ------         ------
Balance, end of year                                           $  52,390       $ 15,862       $ 22,556
                                                                  ======         ======         ======
</TABLE>

(7) REAL ESTATE OWNED

Real estate owned is summarized as follows:
<TABLE>
<CAPTION>

                                                                      December 31,
                                                                -----------------------
                                                                  1996           1995
                                                                --------       --------
                                                                    (in thousands)

<S>                                                             <C>            <C>
Acquired through foreclosure                                    $ 14,511       $ 19,098
Acquired for development and sale                                    216            705
                                                                 -------        -------
                                                                  14,727         19,803
Less allowance for losses                                         (2,289)        (4,370)
                                                                 -------        -------
                                                                $ 12,438       $ 15,433
                                                                 =======        =======
</TABLE>

(8) ALLOWANCE FOR LOSSES ON LOANS AND REAL ESTATE

Activity in the allowance for loan losses is summarized as follows:
<TABLE>
<CAPTION>

                                                                        Year Ended December 31,
                                                               ---------------------------------------
                                                                  1996           1995           1994
                                                               ---------       --------       --------
                                                                             (in thousands)

<S>                                                            <C>             <C>            <C>
Balance, beginning of year                                     $  21,855       $ 22,915       $  9,056
Provision charged to expense                                       1,262          1,200         12,432
Additions acquired through acquisitions                            1,242          1,166          2,483
Charge-offs, net                                                  (1,640)        (3,426)        (1,056)
                                                                --------        -------        -------
Balance, end of year                                           $  22,719       $ 21,855       $ 22,915
                                                                ========        =======        =======
</TABLE>

                                    67
<PAGE> 70

Activity in the allowance for losses on real estate owned is summarized as
follows:
<TABLE>
<CAPTION>

                                                                        Year Ended December 31,
                                                               ---------------------------------------
                                                                  1996           1995           1994
                                                               ---------       --------       --------
                                                                             (in thousands)

<S>                                                            <C>             <C>            <C>
Balance, beginning of year                                     $   4,370       $  6,484       $  3,737
Provision for real estate losses                                      --             --          4,581
Additions acquired through acquisitions                               --             --            197
Charge-offs                                                       (2,081)        (2,114)        (2,031)
                                                                 -------         ------         ------
Balance, end of year                                           $   2,289       $  4,370       $  6,484
                                                                 =======         ======         ======
</TABLE>

(9)  OFFICE PROPERTIES AND EQUIPMENT, NET

Office properties and equipment are summarized as follows:
<TABLE>
<CAPTION>

                                                                      December 31,
                                                                -----------------------
                                                                  1996           1995
                                                                --------       --------
                                                                    (in thousands)

<S>                                                             <C>            <C>
Land, office buildings, and improvements                        $ 55,527       $ 53,601
Furniture and equipment                                           26,987         23,056
Leasehold improvements                                             4,774          4,349
                                                                  ------         ------
                                                                  87,288         81,006
Less accumulated depreciation and amortization                    32,322         28,540
                                                                  ------         ------
                                                                $ 54,966       $ 52,466
                                                                  ======         ======
</TABLE>

Depreciation and amortization expense on office properties and equipment
totaled $4.7 million, $4.3 million, and $5.8 million, for 1996, 1995, and
1994, respectively.

The Company and its subsidiaries lease certain premises and equipment under
operating leases which expire through the year 2014, with certain lease
agreements containing renewal options. Minimum lease payments (in thousands)
for the years ending December 31 are summarized as follows:

<TABLE>
<CAPTION>
<S>                                                             <C>
              1997                                              $  3,106
              1998                                                 2,750
              1999                                                 1,508
              2000                                                 1,009
              2001                                                   776
              2002 through 2014                                    2,136
                                                                  ------
                                                                $ 11,285
                                                                  ======
</TABLE>

Rent expense totaled $3.1 million, $2.8 million, and $4.7 million for 1996,
1995, and 1994, respectively.

                                    68
<PAGE> 71

(10) INTANGIBLE ASSETS

Intangible assets and fair value in excess of cost of net assets acquired
(negative goodwill), included in other assets and other liabilities,
respectively, in the accompanying consolidated balance sheets are summarized
as follows:
<TABLE>

<CAPTION>

                                                                      December 31,
                                                                -----------------------
                                                                  1996           1995
                                                                --------       --------
                                                                    (in thousands)

<S>                                                             <C>            <C>
Intangible assets:
  Goodwill                                                      $  4,259       $    671
  Core deposit intangibles                                        41,156         33,457
                                                                  ------         ------
                                                                  45,415         34,128
  Less accumulated amortization                                    7,670          4,896
                                                                  ------         ------
                                                                  37,745         29,232
Negative goodwill, net of accumulated amortization                (3,569)        (4,173)
                                                                  ------         ------
                                                                $ 34,176       $ 25,059
                                                                  ======         ======
</TABLE>

The presentation of intangible assets in accordance with generally accepted
accounting principles does not recognize the future economic benefit
associated with certain of the Company's intangible assets whose amortization
is tax deductible.  Such intangible assets approximated $8.2 million at
December 31, 1996.  The future benefit associated with such tax deductible
intangibles is approximately $2.9 million.

Goodwill (including negative goodwill) and core deposit intangibles resulted
from business combinations which were accounted for using the purchase method
of accounting and from branch deposit acquisitions.  These intangibles are
amortized on a straight line basis over the period that it is expected to be
benefited, not to exceed ten years. Intangible assets are periodically
reviewed for possible impairment when events or changed circumstances affect
the underlying basis of the assets.

(11) DEPOSITS

Deposits are summarized as follows:
<TABLE>
<CAPTION>
                                                                                     DECEMBER 31,
                                                  --------------------------------------------------------------------------------
                                                                   1996                                       1995
                                                  ------------------------------------       -------------------------------------
                                                                   PERCENT     AVERAGE                       PERCENT       AVERAGE
                                                     AMOUNT        OF TOTAL      RATE           AMOUNT       OF TOTAL        RATE
                                                  -----------      --------    -------       -----------     --------      -------
                                                                             (dollars in thousands)
<S>                                               <C>              <C>         <C>           <C>              <C>           <C>
Demand deposits:
   NOW                                            $   390,352        7.3%        0.81%       $   343,036        7.0%        0.96%
   Passbook                                           289,268        5.4         2.31            327,219        6.7         2.31
   Money market demand                                796,046       14.9         4.19            555,277       11.3         4.12
                                                    ---------       ----                       ---------      -----
      Total demand deposits                         1,475,666       27.6         2.93          1,225,532       25.0         2.75
                                                    ---------       ----                       ---------      -----
Certificates of deposit:
   2.00% to 3.99%                                       3,929         .1         2.76             44,903         .9         3.78
   4.00% to 5.99%                                   2,826,377       52.9         5.44          2,278,911       46.4         5.40
   6.00% to 7.99%                                   1,010,813       18.9         6.52          1,324,401       27.0         6.53
   8.00% to 9.99%                                      29,164         .5         8.88             33,207         .7         9.03
   10.00% & above                                         699         --        11.11                674         --        11.16
                                                    ---------       ----                       ---------      -----
      Total certificates of deposit                 3,870,982       72.4         5.75          3,682,096       75.0         5.82
                                                    ---------       ----                       ---------      -----
Unearned discount on brokered
  certificates                                            (49)        --                            (117)        --           --
Net adjustment related to purchase
   method of accounting                                   472         --                             (14)        --           --
                                                    ---------      -----                       ---------      -----
                                                  $ 5,347,071      100.0%        4.97%       $ 4,907,497      100.0%        5.05%
                                                    =========      =====         ====          =========      =====         ====
</TABLE>

                                    69
<PAGE> 72

The scheduled maturities of certificates of deposit are summarized as follows:
<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                          -----------------------------------------------------------------
                                                        1996                               1995
                                          --------------------------------     ----------------------------
                                                                  PERCENT                          PERCENT
                                              AMOUNT              OF TOTAL        AMOUNT           OF TOTAL
                                          ------------            --------     -----------         --------
                                                                (dollars in thousands)

<S>                                        <C>                   <C>           <C>                  <C>
Due within:
   One year                                $ 2,364,151            61.2%        $ 2,204,654           59.9%
   Two years                                   625,054            16.1             741,149           20.1
   Three years                                 540,614            13.9             250,594            6.8
   Four years                                  135,908             3.4             279,177            7.6
   Five years                                  102,673             2.7             119,912            3.3
   Thereafter                                  102,582             2.7              86,610            2.3
                                             ---------           -----           ---------          -----
                                           $ 3,870,982           100.0%        $ 3,682,096          100.0%
                                             =========           =====           =========          =====
</TABLE>

At December 31, 1996 and 1995, accrued interest payable on deposits totaled
$8.2 million and $7.2 million, respectively.

Certificate of deposit accounts with balances of $100,000 or greater totaled
$332.2 million and $262.8 million at December 31, 1996 and 1995,
respectively.  At December 31, 1996, $63.8 million will mature within three
months, $70.3 million will mature in three to six months, $84.4 million will
mature in six months to one year, and $113.7 million will mature after one
year.

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

                                                                        Year Ended December 31,
                                                               ---------------------------------------
                                                                  1996           1995           1994
                                                               ---------       --------       --------
                                                                             (in thousands)

<S>                                                            <C>            <C>            <C>
Passbook                                                       $   7,035      $   8,063      $   9,821
NOW and money market demand                                       30,501         22,782         23,706
Certificates of deposit                                          212,284        202,991        166,663
                                                                 -------        -------        -------
                                                               $ 249,820      $ 233,836      $ 200,190
                                                                 =======        =======        =======
</TABLE>

(12)  SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Mortgage-backed securities sold under agreements to repurchase are treated as
financings.  The securities underlying the agreements are book entry
securities and are delivered, by appropriate entry, to the major investment
banking firms (dealers) used in the transactions.  The dealers may have sold,
loaned, or otherwise disposed of such securities to other parties in the
normal course of their operations, and have agreed to resell to the Company
the same securities or substantially identical securities at the maturities
of the agreements.

The carrying value and market value of securities sold under agreements to
repurchase are summarized as follows:
<TABLE>
<CAPTION>

                                                                                    DECEMBER 31,
                                                                ------------------------------------------------------
                                                                          1996                          1995
                                                                -----------------------       ------------------------
                                                                CARRYING         MARKET       CARRYING        MARKET
                                                                 VALUE           VALUE         VALUE          VALUE
                                                                 -----           -----         -----          -----
                                                                                  (in thousands)

<S>                                                             <C>             <C>        <C>            <C>
Agreements involving:
  Same securities                                               $  3,095        $ 4,018    $   897,261    $   928,600
  Substantially identical securities                                  --             --        185,553        186,600
                                                                  ------         ------      ---------      ---------
                                                                   3,095          4,018      1,082,814      1,115,200
  Accrued interest payable                                             8             --          5,534             --
                                                                  ------         ------      ---------      ---------
                                                                $  3,103        $ 4,018    $ 1,088,348    $ 1,115,200
                                                                  ======         ======      =========      =========
</TABLE>

                                    70
<PAGE> 73

At December 31, 1996 and 1995, the scheduled maturities of securities sold
under agreements to repurchase are summarized as follows:
<TABLE>
<CAPTION>

                                                                                     December 31,
                                                                                ----------------------
                                                                                 1996         1995
                                                                                -------    -----------
                                                                                    (in thousands)
<S>                                                                             <C>        <C>
Maturing within 30 days                                                         $ 3,095    $   951,602
30 - 90 days                                                                         --         34,462
Over 90 days                                                                         --         96,750
                                                                                 ------      ---------
                                                                                $ 3,095    $ 1,082,814
                                                                                 ======      =========
</TABLE>

Financial data pertaining to the weighted average cost, the level of
securities sold under agreements to repurchase, and the related interest
expense is as follows:
<TABLE>
<CAPTION>

                                                                               AT OR FOR THE YEAR ENDED DECEMBER 31,
                                                                              ----------------------------------------
                                                                                 1996           1995          1994
                                                                              ----------    -----------    -----------
                                                                                     (dollars in thousands)

<S>                                                                           <C>           <C>            <C>
Weighted average interest rate at end of year                                      3.70%          5.84%          5.96%
Weighted daily average interest rate during the year                               5.50           5.93           4.47
Daily average of securities sold under
   agreements to repurchase                                                   $ 857,924     $1,426,101     $1,193,671
Maximum securities sold under agreements to
   repurchase at any month end                                                1,235,970      1,685,869      1,650,963
Interest expense during the year                                                 47,140         84,557         53,303
</TABLE>

                                    71
<PAGE> 74

(13) ADVANCES FROM FEDERAL HOME LOAN BANK

Advances from the FHLB are summarized as follows:
<TABLE>
<CAPTION>

                                                                 DECEMBER 31,
                                          --------------------------------------------------------
                                                    1996                          1995
                                          ------------------------       -------------------------
                                                         WEIGHTED                        WEIGHTED
                                                         AVERAGE                         AVERAGE
DUE IN                                     AMOUNT         RATE            AMOUNT          RATE
------                                    --------       ------          --------        ------
                                                         (dollars in thousands)

<S>                                    <C>                <C>          <C>                <C>
1996                                   $        --          --%        $ 2,077,000        5.74%
1997                                     1,113,756        5.74             165,756        6.57
1998                                       569,500        5.43              57,500        5.73
1999                                        75,000        5.56                  --          --
2000                                        77,500        5.60              75,000        5.76
2003                                         2,000        6.39               2,000        6.39
                                        ----------                      ----------
                                         1,837,756        5.63           2,377,256        5.80
Net adjustment related to purchase
 method of accounting                           --          --                (118)         --
                                        ----------        ----          ----------
                                       $ 1,837,756        5.63%        $ 2,377,138        5.80%
                                        ==========        ====          ==========        ====
</TABLE>

Financial data pertaining to the weighted average cost, the level of FHLB
advances, and the related interest expense is as follows:
<TABLE>
<CAPTION>

                                                                               AT OR FOR THE YEAR ENDED DECEMBER 31,
                                                                              ----------------------------------------
                                                                                 1996           1995          1994
                                                                              ----------    -----------    -----------
                                                                                     (dollars in thousands)

<S>                                                                         <C>            <C>            <C>
Weighted average interest rate at end of year                                      5.63%          5.80%          5.90%
Weighted daily average interest rate during the year                               5.55           5.99           4.80
Daily average of FHLB advances                                              $ 2,598,545    $ 2,236,899    $ 1,579,100
Maximum FHLB advances at any month end                                        2,868,756      2,460,000      1,857,000
Interest expense during the year                                                144,089        134,073         75,800
</TABLE>

The Company is required to maintain mortgage-backed securities with a market
value of 100% of outstanding collateralized advances and qualifying loans
with principal balances aggregating 150% of outstanding noncollateralized
advances.  FHLB stock is also pledged as collateral for these advances.

During April 1994, the Company terminated a $100.0 million advance from the
FHLB while restructuring its portfolio in order to maintain the Company's
then existing interest rate position.  This resulted in a pretax loss
totaling approximately $980,000 in 1994, which has been recorded, net of its
tax effect, as an extraordinary item.

                                    72
<PAGE> 75

(14)  OTHER BORROWINGS

Other borrowings are summarized as follows:
<TABLE>
<CAPTION>

                                                                     December 31,
                                                               ------------------------
                                                                  1996          1995
                                                               ---------       --------
                                                                  (in thousands)
<S>                                                            <C>             <C>
Mortgage-backed bonds (net of unamortized discount
    of $92 at December 31, 1995)
    10.125% due April 15, 2018                                 $      --       $ 19,664

Subordinated notes, 9.5% due August 1, 2002                           --         27,859
                                                                --------        -------
                                                               $      --       $ 47,523
                                                                ========        =======
</TABLE>

During 1996, the Company called the subordinated notes at par plus accrued
interest.  This resulted in a pretax loss totaling approximately $812,000,
representing the write off of a previously unamortized debt discount which
has been recorded, net of its tax effect, as an extraordinary item.  Also
during 1996,  the Company defeased mortgage-backed bonds totaling $19.7
million.  During 1994, the Company repurchased and defeased mortgage-backed
bonds totaling $54.3 million.  These transactions resulted in pretax losses
totaling approximately $1.4 million and $7.2 million in 1996 and 1994,
respectively, which have been recorded, net of their tax effects, as
extraordinary items.

During 1991, the Company, under the name Farm & Home, issued $31.0 million of
13.0% subordinated debentures in exchange for all of its then existing 13.0%
Series A Cumulative Exchangeable Preferred Stock.  The debentures, which were
recorded net of discount of $4.0 million, had a net book value of $27.0
million at December 31, 1993, were scheduled to mature in 2016, and had an
effective interest rate of 13.58%.  In June 1994, using the proceeds from the
issuance of 319,000 shares of preferred stock and cash reserves, these
debentures were called at par.  This resulted in a pretax loss totaling $4.0
million which has been recorded, net of its tax effect, as an extraordinary
item.

(15)  INTEREST RATE RISK MANAGEMENT

The Company's primary objective regarding asset and liability management is
to position the Company such that changes in interest rates do not have a
material adverse effect on net interest income or the net market value of the
Company. The Company's primary strategy for accomplishing its asset and
liability management objectives is achieved by matching the weighted average
maturities of assets, liabilities, and off-balance sheet items (duration
matching). A portion of the duration matching strategy has involved, more
historically than currently, the use of derivative financial instruments such
as interest rate exchange agreements, interest rate cap and floor agreements
and, to a much lesser extent, interest rate collar agreements and financial
futures contracts.

The Company uses derivative financial instruments solely for risk management
purposes. None of the Company's derivative instruments are what are termed
leveraged instruments. These types of instruments are riskier than the
derivatives used by the Company in that they have embedded options that
enhance their performance in certain circumstances, but dramatically reduce
their performance in other circumstances. The Company is not a dealer nor
does it make a market in such instruments.  The Company does not trade the
instruments and the Board of Directors' approved policy governing the
Company's use of these instruments strictly forbids speculation of any kind.

                                    73
<PAGE> 76

The risks generally associated with interest rate exchange agreements are
also the same as for interest rate cap, floor, and collar agreements.  Such
risks are the risk that the counterparty in the agreement may default
("credit risk"), the risk that at the time of any such default, interest
rates may have moved favorably from the perspective of the nondefaulting
party ("market risk") and the risk that interest accrued and due to the
Company previously reflected in the consolidated balance sheets may not be
received as a result of the default. The Company's interest rate exchange
agreements and interest rate cap and floor agreements have been entered into
with nationally recognized commercial and investment banking firms or the
FHLB.  As such, the Company does not anticipate nonperformance by the
counterparties. Financial futures contracts are subject to similar market
risks as interest rate exchange agreements; however, credit risk is
substantially mitigated due to the requirement that participants settle
changes in the value of their positions daily.

The Company cancelled all of its interest rate exchange agreements during the
third quarter of 1996, accordingly there are no such agreements outstanding
at December 31, 1996. Interest rate exchange agreements at December 31, 1995
are summarized as follows:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 1995
                                                  -------------------------------------------------------------------
                                                  NOTIONAL           AVERAGE        AVERAGE      WEIGHTED
                                                  PRINCIPAL           RATE           RATE        AVERAGE        FAIR
DESIGNATED AGAINST                                 AMOUNT           RECEIVED         PAID        MATURITY       VALUE
------------------                                ---------         --------        -------      --------       -----
                                                                (dollars in thousands)
<S>                                               <C>                 <C>            <C>         <C>         <C>
Fixed rate available for sale
mortgage-backed securities:
  Fixed interest rate paid                        $  260,000          5.84%          6.27%       4.25 yrs    $   (6,528)
                                                  ----------                                                 ----------

Short-term wholesale
borrowings maturing or
repricing within 100 days or less:
  Fixed interest rate paid                           795,000          5.88           8.99        5.82 yrs      (122,468)
  Variable interest
      rate paid                                      159,000          7.36           5.94        6.05 yrs        13,770
                                                  ----------                                                 ----------
                                                     954,000          6.13           8.48                      (108,698)
                                                  ----------                                                 ----------
      Total                                       $1,214,000          6.06%          8.01%                   $ (115,226)
                                                  ==========          ====           ====                    ==========
</TABLE>

                                    74
<PAGE> 77

Interest rate cap, floor, and collar agreements are summarized as follows
(dollars in thousands):
<TABLE>
<CAPTION>
                                   NOTIONAL    AVERAGE    CURRENT    WEIGHTED
CAPS:                              PRINCIPAL   CONTRACT    INDEX     AVERAGE    AMORTIZED    FAIR
DESIGNATED AGAINST                  AMOUNT       RATE      RATE      MATURITY      COST      VALUE
------------------                ----------   --------   -------    --------   ---------    -----
<S>                               <C>         <C>           <C>       <C>        <C>        <C>
Adjustable rate available for
sale mortgage-backed securities
   December 31, 1996              $3,302,500     8.50%      5.58%     6.22 yrs.  $ 71,410   $ 57,333
                                  ==========     ====       ====                 ========   ========
   December 31, 1995              $2,152,500     8.15%      5.85%     3.40 yrs.  $ 23,997   $  8,738
                                  ==========     ====       ====                 ========   ========

Short-term wholesale borrowings
maturing or repricing
within 100 days or less
   December 31, 1996              $   --           --%        --%        --      $     --   $     --
                                  ==========     ====       ====                 ========   ========
   December 31, 1995              $  400,000     9.63%      5.88%     8.92 yrs.  $ 12,876   $  6,135
                                  ==========     ====       ====                 ========   ========

FLOORS:
DESIGNATED AGAINST
------------------
Adjustable rate available for
sale mortgage-backed securities
   December 31, 1996              $  150,000     7.50%      5.52%      .61 yrs.  $    145   $  1,676
                                  ==========     ====       ====                 ========   ========
   December 31, 1995              $  615,000     5.12%      4.76%     5.06 yrs.  $  4,271   $ 10,746
                                  ==========     ====       ====                 ========   ========

Interest-bearing retail deposits
   December 31, 1996              $  450,000     6.33%      5.50%     4.52 yrs.  $ 13,938   $ 10,327
                                  ==========     ====       ====                 ========   ========
   December 31, 1995              $  955,000     5.32%      5.01%     6.27 yrs.  $ 25,035   $ 31,116
                                  ==========     ====       ====                 ========   ========

COLLAR:
DESIGNATED AGAINST
------------------
Interest-bearing retail deposits
   December 31, 1996              $   25,000  5.25%/10.25%  5.88%     1.84 yrs.  $     66   $     51
                                  ==========  ===========   ====                 ========   ========
   December 31, 1995              $   25,000  5.25%/10.25%  5.88%     2.84 yrs.  $    138   $     51
                                  ==========  ===========   ====                 ========   ========
</TABLE>

                                    75
<PAGE> 78

Changes in the notional amounts of interest rate exchange, cap, floor, and
collar agreements and related recognized net losses were as follows.
<TABLE>
<CAPTION>
                                                                 INTEREST       INTEREST       INTEREST         INTEREST
                                                               RATE EXCHANGE    RATE CAP      RATE FLOOR       RATE COLLAR
                                                                AGREEMENTS     AGREEMENTS     AGREEMENTS       AGREEMENTS
                                                               -------------   ----------     ----------       ----------
                                                                                     (in thousands)
<S>                                                            <C>            <C>            <C>                <C>
Notional balance at December 31, 1994                          $ 1,574,000    $ 2,552,500    $ 1,570,000        $ 25,000

Maturities                                                        (360,000)            --             --              --
                                                               -----------    -----------    -----------        --------
Notional balance at December 31, 1995                            1,214,000      2,552,500      1,570,000          25,000

Purchases                                                          100,000      1,500,000             --              --
Maturities                                                              --       (250,000)            --              --
Terminations                                                    (1,314,000)      (500,000)      (970,000)             --
                                                               -----------    -----------    -----------        --------
Notional balance at December 31, 1996                          $        --    $ 3,302,500    $   600,000        $ 25,000
                                                               ===========    ===========    ===========        ========
</TABLE>

As a result of its continuing transition to a more retail-oriented
institution, the Company was able to substantially reduce in 1996,
principally during the third and fourth quarters, its need for derivative
financial instruments in managing its interest rate risk.

Accordingly, the Company terminated all of its interest rate exchange
agreements, $970 million notional amount of its interest rate floor
agreements, and $500 million notional amount of its interest rate cap
agreements.  The terminations of the interest rate exchange agreements were
accounted for in accordance with the provisions of Emerging Issues Task Force
Issue 84-7 (EITF 84-7) which requires that gains or losses on the termination
of such agreements be recognized when the offsetting gain or loss is
recognized on the designated asset or liability.  That is, to the extent that
the designated assets or liabilities still exist, any gain or loss on the
termination of the agreement designated as a synthetic alteration would be
deferred and amortized over the shorter term of the remaining contractual
life of the agreement or the remaining life of the asset or liability.

During the third quarter 1996, interest rate exchange agreements designated
against available for sale fixed rate mortgage-backed securities were
cancelled resulting in a $16.1 million gain which was recognized as the above
mentioned assets against which the agreements had been designated were
concurrently sold.  The remaining interest rate exchange agreements
designated against short-term wholesale borrowings were also cancelled at a
cost of $68.0 million which costs were deferred to be amortized because the
underlying liabilities against which the agreements had been designated still
existed at September 30, 1996.

Efforts to further the previously discussed retail transition continued in
the fourth quarter of 1996 and resulted in shrinkage in the Company's total
assets by $1.3 billion.  This shrinkage resulted primarily from the sale of
investment and mortgage-backed securities with the proceeds being utilized to
further reduce short-term wholesale borrowings.  Further, the Company
completed two acquisitions of thrifts during October of 1996 which further
reduced such borrowings by replacing them as a funding source with the
acquired retail deposits.  Upon repayment of  the designated short-term
wholesale borrowings, all existing net deferred swap cancellation costs and
certain other deferred gains and losses related to previously terminated
interest rate cap and floor agreements in total amounting to $80.5 million
were recognized during the fourth quarter of 1996.

The terminations of the $970 million notional amount interest rate floor and
$500 million notional amount cap agreements were accounted for in accordance
with the provisions of Issue 8A of the American Institute of Certified Public
Accountants Issues Paper "Accounting for Options" (Issues Paper).  In
accordance with the conclusions expressed in the Issues Paper, the excess of
the unamortized time value of the options (the premium) over the amount of
cash received upon termination amounting to $6.4 million was recognized in
earnings when the options were terminated.

The recognized net losses referred to above totaling $70.7 million are
reflected in the caption "Net Gain (Loss) from Financial Instruments" in the
accompanying consolidated financial statements (see Note 16).

                                    76
<PAGE> 79

At December 31, 1996, unamortized fees related to the purchase of interest
rate cap, floor, and collar agreements totaled $85.6 million.  The annual
amortization of the unamortized fees is summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                INTEREST-
                                        AVAILABLE                BEARING
                                        FOR SALE               LIABILITIES                TOTAL
                                        ---------              -----------                -----
<S>                                     <C>                     <C>                     <C>
      1997                              $ 11,608                $  2,618                $ 14,226
      1998                                10,960                   2,375                  13,335
      1999                                 9,411                   1,864                  11,275
      2000                                 8,329                   1,864                  10,193
      2001                                 7,312                   1,864                   9,176
      2002 through 2006                   23,935                   3,419                  27,354
                                        --------                --------                --------
                                        $ 71,555                $ 14,004                $ 85,559
                                        ========                ========                ========
</TABLE>
Prior to 1996, the Company utilized short positions in financial futures
contracts to reduce the interest rate risk of certain adjustable rate agency
mortgage-backed securities in the available for sale portfolio.  Each short
position is a contract representing a commitment to sell a $1.0 million,
ninety day maturity Eurodollar deposit. Futures contract price changes
settle on a daily basis whereby the Company either makes or receives a cash
payment. Such cash receipt or payment is recorded against the change in the
value of certain adjustable rate agency mortgage-backed securities held in
the available for sale portfolio.

Futures contracts utilized to reduce the interest rate risk of certain
adjustable rate government agency mortgage-backed securities in the available
for sale portfolio are summarized as follows:

<TABLE>
<CAPTION>
                                                                Contracts
                                          -------------------------------------------------------
                                                                                       Recognized
                                                                   Face                   Gain
                                          Number                  Amount                 (Loss)
                                          ------                  ------               ----------
                                                          (Dollars in Millions)
<S>                                       <C>                <C>                        <C>
At or for the Year Ended:
December 31, 1996                             --             $     --                   $     --
December 31, 1995                          4,115             $  4,115                   $  (71.0)
December 31, 1994                         11,072             $ 11,072                   $   39.5
</TABLE>

During August 1996, the Staff of the Securities and Exchange Commission
(Staff) performed a regular review of the Company's 1995 Form 10-K in
conjuction with Registration Statements on Form S-4 filed by the Company
related to three pending acquisitions. As a result of this review, the Staff
questioned the Company's original accounting treatment surrounding the deferral
and recognition of gains and losses on financial futures contracts used to
reduce the interest rate risk of certain mortgage backed securities in the
Company's available for sale portfolio.  The Company originally recognized a
$34.8 million charge to fourth quarter 1995 earnings regarding the cessation of
deferral accounting.

At issue was the Staff's contention that the financial futures contracts did
not meet the "high correlation" criteria of Statement of Financial Accounting
Standards No. 80 "Accounting for Futures Contracts", thus not qualifying for
deferral accounting from the inception of the hedge in March 1994 and
requiring the recognition of subsequent gains and losses in income.  The
Company originally ceased deferral accounting when management concluded that
high correlation measured using the "cumulative dollar approach" was unlikely
to be achieved on a consistent basis.

Accordingly, at the Staff's request, the Company in 1996 restated its 1994
and 1995 consolidated financial statements to reflect the cessation of
deferral accounting, from the inception of the hedge, with respect to the
aforementioned financial futures contracts.  The restatement had the effect
of increasing previously reported 1994 net income and decreasing previously
reported 1995 net income by

                                    77
<PAGE> 80

$18.0 million (on a fully-diluted per share basis, an increase of $0.48 for 1994
and a decrease of $0.43 for 1995).  This restatement was one of the timing of
recognition of gains and losses in the Statement of Operations and had no impact
on total stockholders' equity at any date since both the financial futures
contracts and the related mortgage-backed securities had been previously marked
to market through stockholders' equity at each reporting period.

Subsequent to December 31, 1995, the Company terminated all of its financial
futures positions and maintained its interest rate risk management position
by principally redesignating existing interest rate exchange agreements to
the available for sale portfolio.  Such interest rate exchange agreements were
utilized prior to the redesignation to manage the interest rate risk of
short-term wholesale borrowings.

(16)  NET GAIN (LOSS) FROM FINANCIAL INSTRUMENTS

Net gain (loss) from financial instruments is summarized as follows:
<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                            ---------------------------------------
                                                                               1996            1995          1994
                                                                               ----            ----          ----
                                                                                          (in thousands)
<S>                                                                         <C>           <C>              <C>
   Mortgage-backed securities held to maturity                              $       --    $        --      $    (231)
   Investment securities held to maturity                                           --             --            209
   Mortgage-backed securities held for trading                                      --             --         (4,545)
   Mark to market of financial futures contracts                                    --        (71,022)        39,508
   Mortgage-backed securities available for sale                                 8,466         23,885        (28,208)
   Investment securities available for sale                                        719             --           (115)
   Cancellation cost of interest rate exchange,
     cap, and floor agreements (See Note 15)                                   (70,711)            --         (8,910)
   Options expense                                                             (15,108)       (11,079)        (8,368)
                                                                               -------      ---------        -------
                                                                            $  (76,634)   $   (58,216)     $ (10,660)
                                                                               =======      =========        =======
</TABLE>

(17)  INCOME TAXES

Prior to 1996, if certain conditions were met, savings and loan associations
and savings banks were allowed special bad debt deductions in determining
taxable income based on either specified experience formulas or on a
percentage of taxable income before such deduction.  Bad debt deductions in
excess of actual losses were tax-preference items, and were subject to a
minimum tax.  The Company used the percentage of taxable income method for
1995 and 1994 in determining the bad debt deduction for tax purposes.

The special bad debt deduction accorded thrift institutions is covered under
Section 593 of the Internal Revenue Code (IRC).  On August 20, 1996, the
Small Business Job Protection Act of 1996 (the Act) was signed into law.
This Act included the repeal of certain portions of Section 593 effective
for tax years beginning after December 31, 1995. As a result, thrift
institutions are no longer allowed a percentage method bad debt deduction.
The repeal of the thrift reserve method generally requires thrift
institutions to recapture into income the portion of tax bad debt reserves
accumulated since 1987 (base year reserve).  The recapture will generally be
taken into income ratably over six tax years.  However, if the Company meets
a residential loan requirement for tax years beginning in 1996 and 1997,
recapture of the reserve can be deferred until the tax year beginning in
1998.  At December 31, 1996, the Company had bad debts deducted for tax
purposes in excess of the base year reserve of approximately $15.3 million.
The Company has recognized a deferred income tax liability for this amount.

Certain events covered by IRC Section 593(e), which was not repealed, will
trigger a recapture of the base year reserve.  The base year reserve of
thrift institutions would be recaptured if a thrift ceases to qualify as a
bank for federal income tax purposes.  The base year reserves of thrift
institutions also remain subject to income tax penalty provisions which, in
general, require recapture upon certain stock redemptions of, and excess
distributions to, stockholders.  At December 31, 1996, retained earnings
included approximately $93.0 million of base year reserves, for which no
deferred federal income tax liability has been recognized.

                                    78
<PAGE> 81

Income tax expense (benefit) before extraordinary items is summarized as
follows:
<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                               ------------------------------------
                                                                               1996            1995            1994
                                                                               ----            ----            ----
                                                                                          (in thousands)

<S>                                                                             <C>           <C>          <C>
Current:
   Federal                                                                      $ 2,962       $   (437)     $ 38,520
   State                                                                             --            (21)        2,699
Deferred:
   Federal                                                                        2,873         10,309       (14,805)
   State                                                                             --            407        (1,030)
                                                                                  -----         ------       -------
                                                                                $ 5,835       $ 10,258      $ 25,384
                                                                                  =====         ======       =======
</TABLE>

The reasons for the difference between the expected income taxes, computed at
the federal statutory rate of 35%, and the actual income taxes are summarized
as follows:
<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                                 ----------------------------------
                                                                                 1996          1995            1994
                                                                                 ----          ----            ----
                                                                                          (in thousands)
<S>                                                                            <C>           <C>           <C>
      Computed "expected" income tax                                           $ 5,932       $ 13,075      $ 26,236
      State income taxes, net of federal tax benefit                                --            278         1,085
      Resolution of federal tax issues                                            (241)        (2,188)       (3,110)
      Nondeductible acquisition costs                                               --            101         2,469
      Other, net                                                                   144         (1,008)       (1,296)
                                                                                 -----        -------       -------
                                                                               $ 5,835       $ 10,258      $ 25,384
                                                                                 =====        =======       =======
</TABLE>

The components of the deferred tax assets and deferred tax liabilities are
summarized as follows:
<TABLE>
<CAPTION>
                                                                                     DECEMBER 31,
                                                                              ------------------------
                                                                                 1996           1995
                                                                                 ----           ----
                                                                                  (in thousands)
<S>                                                                           <C>             <C>
Deferred tax assets:
   Unrealized losses on securities                                            $   6,470       $ 12,506
   Litigation settlement                                                            843          1,604
   Purchased mortgage service rights                                              4,527          3,704
   Provision for losses on loans                                                  7,306          7,412
   Other                                                                          6,271          4,278
                                                                                 ------         ------
     Total deferred tax assets                                                   25,417         29,504
                                                                                 ------         ------
Deferred tax liabilities:
   FHLB stock dividends                                                           8,228          8,203
   Purchase accounting adjustments                                                1,943          2,294
   Bad debt reserves in excess of base year                                       5,858          4,792
   Deferred income                                                                3,624          7,275
   Other                                                                          4,043          2,346
                                                                                -------         ------
      Total deferred tax liabilities                                             23,696         24,910
                                                                                -------         ------
         Net deferred tax asset                                               $   1,721       $  4,594
                                                                                =======         ======
</TABLE>

A valuation allowance would be provided on deferred tax assets when it is
more likely than not that some portion of the assets will not be realized.
The Company has not established a valuation allowance as of December 31,
1996 or 1995, due to management's belief that all criteria for
recognition have been met, including the existence of a history of
taxes paid sufficient to support the realization of deferred tax assets.

                                    79
<PAGE> 82

(18) STOCKHOLDERS' EQUITY

Preferred Stock

Each share of the Company's preferred stock is convertible, at the option of
the holder, into 3.75 shares of the Company's common stock, par value $.01
per share.  The preferred stock is redeemable, at the option of the Company,
in whole at any time or in part, from time to time, on or after May 16, 1997
at $50 per share, plus accrued and unpaid dividends. As part of the merger
agreement with Mercantile Bancorporation Inc. (See Note 24), the Company
is required to redeem its preferred stock on May 16, 1997.

Stock Repurchase Program

On December 15, 1994, the Board of Directors of Roosevelt Financial Group,
Inc. authorized the Company to acquire up to 1,750,000 shares of its own
common stock, subject to market conditions, prior to December 31, 1997.  The
stock repurchased is to be held in treasury in order to fund, from time to
time, the Company's benefit programs.  Shares of stock repurchased may also
be retired, from time to time, if not needed for other corporate purposes.
Through December 31, 1996, 281,500 shares of common stock of the Company
have been repurchased pursuant to the stock repurchase program at a
weighted average price of $15.98 per share.

On January 2, 1997, the Board of Directors of the Company authorized an
expansion of the capacity of the above-mentioned stock repurchase plan by an
additional 5,529,880 shares.  This expansion, when coupled with the
remaining authorization prior to the expansion (1,468,500 shares), resulted in
a total authorization of 6,998,380 shares, the number of shares that the
Company has agreed to use its reasonable best efforts, subject to prudent
business practices, to acquire in open market transactions prior to the
closing date of its planned merger with Mercantile Bancorporation Inc.  (See
Note 24).  Subsequent to December 31, 1996 and through February 13, 1997,
an additional 1,600,000 shares have been repurchased at a weighted average
price of $21.08 per share (unaudited).


(19) REGULATORY CAPITAL REQUIREMENTS AND OTHER MATTERS

The Company and the subsidiary banks are subject to various regulatory
capital requirements administered by the federal banking agencies.  Failure
to meet minimum capital requirements can initiate certain mandatory and
possibly additional discretionary actions by regulators that, if undertaken,
could have a direct material effect on the Company's consolidated financial
statements.  Under capital adequacy guidelines, the Company and the subsidiary
banks must meet specific capital guidelines that involve quantitative
measures of assets, liabilities, and certain off-balance sheet items as
calculated under regulatory accounting practices.  The Company and the
subsidiary banks' capital amounts and classifications are also subject to
quantitative judgements by the regulators about components, risk-weightings
and other factors.  Management believes, as of December 31, 1996 the Company
and the subsidiary banks' meet all capital adequacy requirements.

The subsidiary banks are also subject to the regulatory framework for prompt
corrective action.  The most recent notification from the regulatory agencies
categorized the banks as well capitalized.  To be categorized as well
capitalized, the banks must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the following
table.  There are no conditions or events since the dates of the
aforementioned notifications that management believes have
changed the banks' category.

                                    80
<PAGE> 83

The Company and the banks' actual and required capital amounts and ratios as
of December 31, 1996 are as follows:
<TABLE>
<CAPTION>


                                                                                                REQUIREMENTS TO BE WELL-CAPITALIZED
                                                                                 CAPITAL            UNDER PROMPT AND CORRECTIVE
                                                   ACTUAL                     REQUIREMENTS               ACTION PROVISIONS
                                           ----------------------        ----------------------     ---------------------------
                                            AMOUNT          RATIO         AMOUNT         RATIO          AMOUNT         RATIO
                                           --------        ------        --------       -------        --------       -------
                                                                         (DOLLARS IN MILLIONS)
<S>                                        <C>             <C>           <C>              <C>         <C>              <C>
Total Capital:<F1>
 Roosevelt Financial Group, Inc.           $  480.9        12.52%        $  307.3         8.00%            N/A           N/A
 Roosevelt Bank                               444.2        11.75            302.5         8.00        $  378.1         10.00%
 Missouri State Bank                            8.0        13.35              4.8         8.00             6.0         10.00

Tangible Capital: <F2>
 Roosevelt Bank                               423.2         5.44            116.6         1.50             N/A           N/A

Core (Leverage) Capital: <F2>
 Roosevelt Bank                               425.3         5.47            233.3         3.00             N/A           N/A

Tier I Capital: <F1>
 Roosevelt Financial Group, Inc.              461.9        12.02            153.7         4.00             N/A           N/A
 Roosevelt Bank                               425.3        11.25              N/A          N/A           226.9          6.00
 Missouri State Bank                            7.3        12.11              2.4         4.00             3.6          6.00

Tier I Capital:
 Roosevelt Bank <F2>                          425.3         5.47              N/A          N/A           388.8          5.00
 Missouri State Bank <F3>                       7.3        14.37              N/A          N/A             2.5          5.00

<FN>
<F1> To risk-weighted assets.
<F2> To adjusted total assets.
<F3> To average adjusted assets.
</TABLE>

The Office of Thrift Supervision (OTS) has adopted a rule incorporating an
interest rate risk component into its risk-based capital requirements which
utilizes a methodology to measure the interest rate risk exposure of
institutions.  This exposure is a measure of the potential decline in the net
portfolio value of the institution based upon the effect of an assumed 200
basis point increase or decrease in interest rates.  "Net portfolio value" is
the present value of the expected net cash flow from the institution's
assets, liabilities and off-balance sheet contracts.  Under the OTS
regulation, an institution's "normal" level of interest rate risk in the
event of this assumed change in interest rates is a decrease in the
institution's net portfolio value in an amount not exceeding two percent of
the present value of its assets.  The amount of the required deduction is
one-half of the difference between (a) the institution's actual calculated
exposure to the 200 basis point interest rate increase or decrease (whichever
results in the greater pro forma decrease in net portfolio value) and (b) its
"normal" level of exposure which is two percent of the present value of its
assets.  The OTS recently announced that it will delay the effectiveness of
the regulation until it adopts the process by which an institution may appeal
an interest rate risk capital deduction determination.  Utilizing this
measurement concept, the Bank's interest rate risk at December 31, 1996 would
not be greater than normal as defined by the OTS, thus not requiring any
additional risk-based capital.

In September, 1996 legislation was enacted to recapitalize the Savings
Association Insurance Fund (SAIF).  The legislation provided for a one-time
assessment to be imposed on all deposits assessed at the SAIF rates, as of
March 31, 1995.  The special assessment ratio was established at 0.657% of
deposits by the Federal Deposit Insurance Corporation and resulted in an
assessment of $27.4 million or $17.8 million after the effect of taxes.

                                    81
<PAGE> 84

(20)  STOCK OPTION AND INCENTIVE PLAN

The 1986 Stock Option and Incentive Plan (Plan) was adopted to enable the
Company to attract and retain key personnel.  The Plan, which terminated
January 29, 1997, provided for the granting of incentive stock options,
nonqualified stock options, restricted stock awards, and stock
appreciation rights.  The Plan authorized the issuance of up to 4,500,000
shares of the Company's common stock. The 1994 Non-Employee Director Stock
Option Plan authorizes the issuance of up to 150,000 shares of the
Company's common stock.

The Company accounts for stock-based compensation under the Plan in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" and, accordingly, recognizes no compensation
expense as the exercise price of the Company's employee stock options equals
the market price of the underlying stock on the date of grant.  In October
1995, the FASB issued Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123).  Upon adoption in 1996,
the Company elected the pro forma disclosure alternative provided in SFAS 123
versus the recognition provisions.

Information on the Company's stock options are summarized as follows:
<TABLE>
<CAPTION>

                                                                                     AVERAGE PRICE          PER SHARE OPTION
                                                                SHARES                 PER SHARE              PRICE RANGE
                                                             ------------            -------------          ----------------
<S>                                                           <C>                       <C>                  <C>
   Outstanding and exercisable
       at December 31, 1993                                    2,364,475                $   5.26             $3.00-13.75
         Granted                                                 205,500                   13.89
         Exercised                                            (1,420,347)                   4.63
                                                              ----------
   Outstanding and exercisable
       at December 31, 1994                                    1,149,628                    7.67             $3.00-15.50
         Assumed in merger                                        93,506                    4.09
         Granted                                                 150,000                   16.54
         Forfeited                                                (9,000)                  16.08
         Exercised                                              (349,680)                   4.53
                                                              ----------
   Outstanding and exercisable
       at December 31, 1995                                    1,034,454                    9.62             $3.00-18.00
         Assumed in mergers                                      182,553                    6.73
         Granted                                                 148,800                   19.81
         Exercised                                              (194,527)                   9.89
                                                              ----------                  ------
   Outstanding and exercisable
       at December 31, 1996                                    1,171,280                $  10.42             $3.00-20.62
                                                              ==========                  ======
</TABLE>

The Company's stock options outstanding and exercisable at December 31,
1996 by range of exercise prices, is further detailed as follows:

<TABLE>
<CAPTION>
                                                                                   SHARES
                                                    PER SHARE OPTION               UNDER              AVERAGE PRICE
                                                      PRICE RANGE                  OPTION               PER SHARE
                                                    ----------------               ------             -------------

<S>                                                 <C>                          <C>                  <C>
                                                     $ 3.00 - $ 4.99               233,288               $ 4.04
                                                       5.00 -   8.99               416,562                 6.80
                                                       9.00 -  11.99                14,230                 9.27
                                                      12.00 -  14.99               196,400                13.71
                                                      15.00 -  17.99               164,000                16.34
                                                      18.00 -  21.00               146,800                19.95
                                                                                 ---------               ------
                                                                                 1,171,280               $10.42
                                                                                 =========               ======
</TABLE>

Presented below is pro forma net income and earnings per share, as required
by SFAS 123, determined as if the Company had accounted for stock options
granted in 1996 and 1995 under the provisions of SFAS 123.  For purposes of
providing the pro forma disclosures required under SFAS 123, the fair value
of stock options granted in 1996 and 1995 were estimated at the date of grant
using the Black-Scholes option pricing model.  The Black-Scholes option pricing
model was originally developed for use in estimating the fair value of traded
options which have different characteristics than the Company's employee
stock options.  The model is also sensitive to changes in the subjective
assumptions which can materially affect the fair value estimate.  As a
result, management believes that the Black-Scholes model may not necessarily
provide a reliable single measure of the fair value of employee stock
options.

The following weighted-average assumptions were used in the option pricing
model:  a risk-free interest rate of 6.22% and 4.83% for 1996 and 1995,
respectively; an expected life of the option of 4.9 years and 5 years
for 1996 and 1995, respectively; and an expected dividend yield of 3.18%
and 3.40% and a volatility factor 25.41% and 32.92% for 1996 and 1995,
respectively. For purposes of the pro forma disclosures, the estimated
fair value of the options is amortized to expense over the options'
vesting period.

                                    82
<PAGE> 85

Had compensation cost for the Company's stock-based compensation plans been
determined consistent with the recognition provisions of SFAS 123, net income
and earnings per share would have been as follows:
<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                                 -----------------------
(In thousands, except per share amounts)                                          1996           1995
                                                                                  ----           ----

<S>                                                                              <C>           <C>
Pro forma net income                                                             $ 8,957       $ 26,598
Pro forma earnings per share:
   Primary                                                                       $  0.11       $   0.55
   Fully diluted                                                                 $  0.11       $   0.55
</TABLE>

Due to the inclusion of only 1996 and 1995 option grants, the effects of
applying SFAS 123 in 1996 and 1995 may not be representative of the pro forma
impact in future years.


(21)  EMPLOYEE BENEFITS PROGRAMS

Substantially all employees are included in a trusteed defined benefit
pension plan.  Benefits contemplated by the plan are funded through payments
to the Financial Institutions Retirement Fund, which operates a
multi-employer plan and does not report relative plan assets and actuarial
liabilities of the individual participating companies.  The cost of funding
is charged to current operations.  There is no unfunded liability for past
service.  In addition, the Company maintains a retirement plan for outside
directors.  Pension expense totaled $1,580,000, $1,367,000, and $359,000 for
1996, 1995, and 1994, respectively.

The Company maintains a thrift savings plan, qualifying under Section 401(k)
of the Internal Revenue Code, administered by the Financial Institutions
Thrift Plan, and covering substantially all employees.  Participants may
designate up to 15% of their annual compensation as their contribution to the
plan.  Contributions by employees of up to 6% of their annual compensation
are partially or fully matched by the Company based on each employee's number
of years of service.  Matching contributions by the Company totaled
$1,110,000, $936,000, and $866,000 for 1996, 1995, and 1994, respectively.

The Company also sponsors an Employee Stock Ownership Plan (ESOP) which
covers substantially all employees with more than one year of employment who
have attained the age of twenty-one.  The ESOP provides for a grant of the
Company's stock equal to 1% of the annual compensation of each eligible
employee up to annual compensation of $75,000.  Contributions are made on
December 31 of each year for all eligible employees on that date.  Dividends
on shares held in each employee's account are reinvested.  Contributions made
to the ESOP by the Company totaled $302,000, $247,000, and $448,000 for 1996,
1995, and 1994, respectively.

In addition, the Company sponsors an unfunded retiree medical, dental, and
death benefits plan covering eligible employees who retired prior to July 1,
1990 and retired directors from Farm & Home.  The plan is contributory with
retiree contributions adjusted from time to time.  The Company accounts for
the plan in accordance with Statement of Financial Accounting Standards No.
106, "Employers Accounting for Postretirement Benefits Other than Pensions"
(SFAS 106). The plan's impact on the Company's consolidated financial
statements is not material, therefore the disclosures required by SFAS 106
are not presented.

(22) LITIGATION

The Company and its subsidiaries are subject to a number of lawsuits and
claims, some of which involve substantial amounts arising out of the conduct
of its business.  Management, after review and consultation with outside
legal counsel, is of the opinion that the ultimate disposition of such
litigation and claims will not have a material adverse effect of the
Company's consolidated financial statements.

                                    83
<PAGE> 86

<TABLE>
(23)  PARENT COMPANY FINANCIAL INFORMATION

<CAPTION>
                                                                 1996 DECEMBER 31, 1995
---------------------------------------------------------------------------------------
                                                                     (in thousands)
<S>                                                            <C>           <C>
CONDENSED BALANCE SHEETS
Assets:
    Cash                                                       $  31,091     $    2,616
    Investment in subsidiaries                                   467,066        517,080
    Investment securities available for sale                          --          2,531
    Other assets                                                   1,627          4,946
                                                                --------       --------
                                                               $ 499,784     $  527,173
                                                                ========       ========
Liabilities and Stockholders' Equity:
    Subordinated notes                                         $      --     $   27,859
    Other liabilities                                              2,357          2,408
    Stockholders' equity                                         497,427        496,906
                                                                --------       --------
                                                               $ 499,784     $  527,173
                                                                ========      =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                               --------------------------------------
                                                                                 1996           1995          1994
                                                                               --------      ---------     ----------
                                                                                           (in thousands)

<S>                                                                            <C>           <C>           <C>
CONDENSED STATEMENTS OF OPERATIONS
Interest income                                                                $    330      $      82     $      241
Interest expense                                                                  1,672          2,867          5,276
                                                                                 ------        -------        -------
   Net interest expense                                                          (1,342)        (2,785)        (5,035)
Dividends received from subsidiaries                                             81,050         52,050         45,650
Equity in undistributed earnings (losses) of subsidiaries                       (69,402)       (22,682)         8,918
Other income                                                                         25              1             --
General and administrative expenses                                                (927)          (684)        (7,469)
                                                                                 ------        -------        -------
  Income before income tax benefit and extraordinary item                         9,404         25,900         42,064
Income tax benefit                                                                 (784)        (1,198)        (2,280)
                                                                                 ------        -------        -------
  Income before extraordinary item                                               10,188         27,098         44,344
Extraordinary item, net of income tax effect                                       (526)            --         (2,617)
                                                                                 ------        -------        -------
  Net income                                                                   $  9,662      $  27,098     $   41,727
                                                                                 ======        =======        =======
</TABLE>

                                    84
<PAGE> 87

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                               --------------------------------------
                                                                                 1996           1995          1994
                                                                               --------      ---------     ----------
                                                                                           (in thousands)

<S>                                                                           <C>            <C>             <C>
CONDENSED STATEMENTS OF CASH FLOWS
Cash flows from operating activities:
   Net income                                                                 $   9,662      $  27,098       $ 41,727
   Equity in earnings of subsidiaries                                           (11,648)       (29,368)       (54,568)
   Extraordinary loss on early extinguishment of debt                               812             --          3,965
   Other, net                                                                     4,334            517            270
                                                                                -------       --------        -------
      Net cash provided by (used in) operating activities                         3,160         (1,753)        (8,606)
                                                                                -------       --------        -------
Cash flows from investing activities:
   Dividends received                                                            81,050         52,050         45,650
   Additional investment in subsidiary                                               --        (21,463)       (19,036)
   Proceeds from maturities and sales of securities available for sale            2,531            800             --
                                                                                -------       --------        -------
      Net cash provided by investing activities                                  83,581         31,387         26,614
                                                                                -------       --------        -------
Cash flows from financing activities:
   Redemption of subordinated notes                                             (28,750)            --        (31,022)
   Cash dividends paid                                                          (30,513)       (26,789)       (18,056)
   Proceeds from issuance of preferred stock                                         --             --         21,273
   Purchase of treasury stock                                                      (923)        (3,426)          (150)
   Exercise of stock options                                                      1,920          1,107          6,459
                                                                                -------       --------        -------
      Net cash used in financing activities                                     (58,266)       (29,108)       (21,496)
                                                                                -------       --------        -------
      Net increase (decrease) in cash                                            28,475            526        (3,488)
Cash at beginning of year                                                         2,616          2,090          5,578
                                                                                -------       --------        -------
Cash at end of year                                                           $  31,091      $   2,616       $  2,090
                                                                                =======       ========        =======
</TABLE>

(24) PLANNED MERGER WITH MERCANTILE BANCORPORATION INC.

Roosevelt Financial Group, Inc. announced on December 23, 1996 its plans to
merge with Mercantile Bancorporation Inc.  Pursuant to the merger agreement,
shareholders of the Company will be able to elect to receive either $22 in cash
or .4211 shares of Mercantile Bancorporation Inc. common stock, up to 13 million
shares.  Plans call for the merger, which is subject to the approval of
shareholders of the Company and all appropriate regulatory agencies, to be
completed in mid-1997.

                                    85
<PAGE> 88
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

There has been no Current Report on Form 8-K filed within 24 months prior to
the date of the most recent financial statements reporting a change in
accountants and/or reporting disagreements on any matter of accounting
principle or financial statement disclosure.

                             PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning directors of the Registrant is incorporated herein by
reference from the Company's definitive Proxy Statement/Prospectus for
the 1996 Annual Meeting of Stockholders, a copy of which will be filed not
later than 120 days after the close of the fiscal year.  The compensation
report and performance graph included in the Proxy Statement/Prospectus
pursuant to Items 402 (k) and 402 (l) of Regulation S-K are specifically
not incorporated by reference herein.

Information concerning executive officers of the Registrant is provided
herein under Item 1 of Part I.

ITEM 11.  EXECUTIVE COMPENSATION

Information concerning executive compensation is incorporated herein by
reference from the Company's definitive Proxy Statement/Prospectus for the
1996 Annual Meeting of Stockholders, a copy of which will be filed not
later than 120 days after the close of the fiscal year.  The compensation
report and performance graph included in the Proxy Statement/Prospectus
pursuant to Items 402 (k) and 402 (l) of Regulation S-K are specifically
not incorporated by reference herein.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning security ownership of certain beneficial owners and
management is incorporated herein by reference from the Company's definitive
Proxy Statement/Prospectus for the 1996 Annual Meeting of Stockholders, a
copy of which will be filed not later than 120 days after the close of the
fiscal year.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and transactions is
incorporated herein by reference from the Company's definitive Proxy
Statement/Prospectus for the 1996 Annual Meeting of Stockholders, a
copy of which will be filed not later than 120 days after the close of the
fiscal year.

                              PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A)  (1)  Financial Statements:
--------

The Index to Consolidated Financial Statements appears at Item 8, Financial
Statements and Supplementary Data.

(a)  (2)  Financial Statement Schedules:
--------

All financial statement schedules have been omitted as the required
information is inapplicable or has been included in the Notes to
Consolidated Financial Statements.


                                    86
<PAGE> 89

<TABLE>
(a)  (3)  Exhibits:
--------
<CAPTION>
                                                                         SEQUENTIALLY
                                                                         PAGE NUMBER
                                                                            WHERE
                                                                          ATTACHED
                                                                          EXHIBITS
REGULATION                                                               ARE LOCATED
S-K EXHIBIT                                                              IN THIS FORM
NUMBER                      DOCUMENT                                     10-K REPORT
-----------                 --------                                     ------------

<C>            <S>                                                     <C>
   2           Plan of acquisition, reorganization,
                arrangement, liquidation or succession                  Not applicable

               Filed as Exhibit's to the Registrant's
                Current Report on Form 8-K reporting
                the event of December 22, 1996 and
                incorporated herein by reference.

   3           Certificate of Incorporation.
                Filed as Exhibit 4.1 to the Registrant's
                Registration Statement No. 33-79308 and
                incorporated herein by reference.                       Not applicable

               Bylaws.  Filed as Exhibit 3.2 to the
                Registrant's Registration Statement
                No. 33-20337 incorporated herein
                by reference.                                           Not applicable

   4           Instruments defining the rights of
                security holders, including
                indentures:

               Specimen common stock certificate.
                Filed as Exhibit 4 to the
                Registrant's Registration
                Statement No. 33-20337
                incorporated herein by reference.                       Not applicable

               Form of Certificate of Designation of 6 1/2%
                Non-Cumulative Convertible Preferred Stock,
                Series A.  Filed as Exhibit 4.3 to the
                Registrant's Registration Statement No.
                33-76738 and incorporated herein by reference.          Not applicable

               Specimen stock certificate of 6 1/2% Non-Cumulative
                Convertible Preferred Stock, Series A.
                Filed as Exhibit 4.4 to the Registrant's
                Registration Statement No. 33-76738
                and incorporated herein by reference.                   Not applicable

               Form of Certificate of Designation of
                6 1/2% Non-Cumulative Convertible Preferred
                Stock, Series F.  Filed as Exhibit 4.15 to
                the Registrant's Registration Statement
                No. 33-79308 and incorporated herein by reference.      Not applicable

               Specimen stock certificate of 6 1/2% Non-Cumulative
                Convertible Preferred Stock, Series F.  Filed as
                Exhibit 4.16 to the Registrant's Registration
                Statement No. 33-79308 and incorporated herein by
                reference.                                              Not applicable

                                    87
<PAGE> 90
   9           Voting trust agreement                                   Not applicable

   10          Material Contracts:
               1988 Non-Employee Directors Retirement
                Pension Plan.  Filed as Exhibit
                4.9 to the Registrant's Annual
                Report on Form 10-K for the year
                ended December 31, 1988 and
                incorporated herein by reference.                       Not applicable

               1994 Non-Employee Director
                Stock Option Plan. Filed as Exhibit
                4.10 to the Registrant's Annual
                Report on Form 10-K for the year
                ended December 31, 1994 and
                incorporated herein by reference.                       Not applicable

               Roosevelt Bank Supplemental
                Pension Plan. Filed as Exhibit
                4.10 to the Registrant's Annual
                Report on Form 10-K for the year ended
                December 31, 1994 and incorporated
                herein by reference.                                    Not applicable


               Roosevelt Bank Management Deferred
                Compensation Plan. Filed as Exhibit
                4.10 to the Registrant's Annual Report
                on Form 10-K for the year ended
                December 31, 1994 and incorporated
                herein by reference.                                    Not applicable

               Roosevelt Financial Group, Inc.
                Retirement Pension Plan for Outside Directors           Page

               Employment Agreement between the Registrant,
                Mercantile Bancorporation Inc. and Stanley
                J. Bradshaw                                             Exhibit 10.1

               Transition Employment Agreement between the
                Registrant, Mercantile Bancorporation Inc.
                and Anat Bird                                           Exhibit 10.2

               Transition Employment Agreement between the
                Registrant, Mercantile Bancorporation Inc.
                and Gary W. Douglass                                    Exhibit 10.3

   11          Statements re computation of
                per share earnings                                      Exhibit 11

   12          Statements re computation of
                ratios                                                  Not applicable

   13          Annual report to security holders                        Not applicable

   16          Letter re changes in certifying accountant               Not applicable

                                    88
<PAGE> 91

   18          Letter re changes in accounting principles               Not applicable

   21          Subsidiaries of the registrant                           Exhibit 21

   22          Published report regarding matters submitted
                to vote of security holders                             Not applicable

   23          Consents of experts                                      Exhibit 23

   24          Power of attorney                                        Not applicable

   27          Financial Data Schedule                                  Exhibit 27

   99          Additional exhibits                                      Not applicable

<FN>
<F*>     In accordance with Item 601 (b) (2) (iii) of Regulation S-K,
         Registrant hereby agrees to furnish a copy of any omitted
         schedule to the agreement to the SEC upon request.
</TABLE>




                                    89
<PAGE> 92


                            SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant had duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized in the
City of Chesterfield, County of St. Louis, State of Missouri, on the
          day of March, 1996.

                                   ROOSEVELT FINANCIAL GROUP, INC.


                                   By    /s/ Stanley J. Bradshaw
                                     -------------------------------------
                                     Stanley J. Bradshaw
                                     Director, President and
                                     Chief Executive Officer


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

<TABLE>
<CAPTION>
Signatures                                                Title                              Date
-------------------------------------------------------------------                          ----


<C>                                                       <S>                                <C>
  /s/ Stanley Bradshaw                                    Director, President                March 4, 1997
----------------------------------------------------      and Chief Executive
Stanley J. Bradshaw                                       Officer


  /s/ Anat Bird                                           Director, Senior Executive         March 4, 1997
----------------------------------------------------      Vice President and Chief
Anat Bird                                                 Operating Officer


  /s/ Gary W. Douglass                                    Executive Vice President           March 4, 1997
----------------------------------------------------      and Chief Financial Officer
Gary W. Douglass


  /s/ Clarence M. Turley, Jr.                             Director                           March 4, 1997
----------------------------------------------------
Clarence M. Turley, Jr.


  /s/ Hiram S. Liggett, Jr.                               Director                           March 4, 1997
----------------------------------------------------
Hiram S. Liggett, Jr.


  /s/Patricia M. Gammon                                   Director                           March 4, 1997
----------------------------------------------------
Patricia M. Gammon


  /s/ Alvin D. Vitt                                       Director                           March 4, 1997
----------------------------------------------------
Alvin D. Vitt
</TABLE>


                                    90