FIRST KANSAS FINANCIAL CORPORATION


                       2000 ANNUAL REPORT TO STOCKHOLDERS





<PAGE>



                       FIRST KANSAS FINANCIAL CORPORATION
                                  ANNUAL REPORT







                                TABLE OF CONTENTS

                                                                          Page

Letter to Stockholders.......................................................1

Corporate Profile............................................................2

Stock Price Information......................................................2

Selected Financial Ratios and Other Data.....................................3

Management's Discussion and Analysis.........................................4

Report of Independent Auditors.............................................F-1

Consolidated Financial Statements......................................... F-2

Notes to Consolidated Financial Statements.................................F-7

Corporate Information...............................................Back Cover

                                        i

<PAGE>











To Our Stockholders:

         On behalf of our Board of  Directors  and  employees,  I am  pleased to
enclose for your review the 2000 Annual Report to  Stockholders  of First Kansas
Financial Corporation.

         We are happy to report  that for the  fiscal  year ended  December  31,
2000,  we earned  $1.1  million or $.96 per share,  as compared to net income of
$855,000, or $.63 per share, for the fiscal year ended December 31, 1999.

         At December 31, 2000, our assets totaled $150.0 million, as compared to
$142.5 million at December 31, 1999.  Stockholders'  equity was $15.49 per share
at December 31, 2000, as compared to stockholders' equity of $14.17 per share at
December 31, 1999.

         As always, we remain dedicated to enhancing  stockholder value. To this
end, during 2000 we repurchased  194,761 shares of our stock at an average price
of $11.61 per share, which was well below book value and,  therefore,  accretive
to book value and earnings per share. We thank you for your  investment,  in and
continued support of, First Kansas Financial Corporation.

                                       Sincerely,


                                       /s/Larry V. Bailey
                                       -----------------------------------------
                                       Larry V. Bailey
                                       President and Chief Executive Officer

                                        1

<PAGE>



Corporate Profile

         First  Kansas  Financial   Corporation  (the  "Company")  is  a  Kansas
corporation  organized  in February  of 1998 at the  direction  of First  Kansas
Federal Savings  Association (the  "Association")  to acquire all of the capital
stock that the  Association  issued in its  conversion  from the mutual to stock
form  of  ownership  (the  "Conversion").  On June  25,  1998,  the  Association
completed the  Conversion  and became a wholly owned  subsidiary of the Company.
Pursuant to the Conversion, First Kansas Federal Savings Association changed its
name to First Kansas Federal Savings Bank (the "Bank"). The Company is a unitary
savings and loan holding  company which,  under existing laws,  generally is not
restricted in the types of business activities in which it may engage,  provided
that the Bank  retains  a  specified  amount of its  assets  in  housing-related
investments.  The Company conducts no significant  business or operations of its
own other than holding all of the  outstanding  stock of the Bank and  investing
the Company's portion of the net proceeds obtained in the Conversion.

         The Bank was originally chartered in 1899 as "The Consolidated Building
and Loan Association" and commenced operations that same year. In 1938, the Bank
became a member of the Federal Home Loan Bank System, obtained a federal charter
and  changed  its  name to  "First  Federal  Savings  and  Loan  Association  of
Osawatomie." In 1983, the Bank changed its name to "First Kansas Federal Savings
Association."

         The Bank is a federally  chartered stock savings bank  headquartered in
Osawatomie,  Kansas,  with six branch offices  located in the Kansas counties of
Miami,  Bourbon,  Mitchell and Phillips.  The Bank is subject to examination and
comprehensive  regulation  by the Office of Thrift  Supervision  ("OTS") and its
deposits  are  federally  insured  by the  Savings  Association  Insurance  Fund
("SAIF") of the Federal Deposit Insurance  Corporation  ("FDIC").  The Bank is a
member of and owns  capital  stock in the  Federal  Home Loan Bank  ("FHLB")  of
Topeka, which is one of the 12 regional banks in the FHLB System.

         The Bank  operates a  traditional  savings  bank  business,  attracting
deposit accounts from the general public and using those deposits, together with
other funds, primarily to originate and invest in loans secured by single-family
residential  real estate and investment  securities,  including  mortgage-backed
securities.

Stock Price Information

         The  Company's  common  stock is traded on the Nasdaq  National  Market
under the trading  symbol of "FKAN." The following  table  reflects high and low
sale closing prices as published by the Nasdaq  National Market for the calendar
quarters  indicated.  The prices  reflect  inter-dealer  prices,  without retail
mark-up, mark-down, or commission, and may not represent actual transactions.

                                        2
<PAGE>


                                     High           Low         Dividends
                                                    ---         ---------
1999
First Quarter....................   $11.00         $10.25           --
Second Quarter...................   $11.00         $10.00       $.05/share
Third Quarter....................   $11.38         $10.69       $.05/share
Fourth Quarter...................   $11.75         $11.00       $.05/share

2000
First Quarter....................   $10.78          $8.50       $.05/share
Second Quarter...................   $10.75          $9.50       $.05/share
Third Quarter....................   $12.56         $11.25       $.05/share
Fourth Quarter...................   $12.50         $11.31       $.05/share

         The  number of  shareholders  of record of common  stock as of March 5,
2001 was  approximately  302.  This does not  reflect  the  number of persons or
entities who held stock in nominee or "street"  name through  various  brokerage
firms.  At March 5, 2001,  there were 1,113,208  shares of the Company's  common
stock outstanding.

         The  Company's  ability to pay  dividends  to  stockholders  is largely
dependent upon the dividends it receives from the Bank. The Bank may not declare
or pay a cash dividend on any of its stock if the effect thereof would cause the
Bank's  regulatory  capital to be reduced below (1) the amount  required for the
liquidation  account  established in connection with the Conversion,  or (2) the
regulatory requirements imposed by the OTS.

Selected Financial Ratios and Other Data


                                                      At or For the Years Ended
                                                            December 31,
                                                           -------------
                                                     2000                  1999
                                                    ------                -----
Return on average assets......................        0.74%                 .63%
Return on average equity......................        6.04                 4.20
Average equity to average assets ratios.......       12.27                14.87
Equity to assets at period end................       11.74                13.24
Net interest rate spread......................        2.28                 2.26
Yield on average interest-earning assets......        7.02                 6.63
Non-performing loans to total assets..........         .01                  .01
Allowance for loan loss to total loans........         .40                  .50


                                        3
<PAGE>

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


         The following is a discussion of the financial condition and results of
operations of the Company and the Bank, and should be read in  conjunction  with
the accompanying Consolidated Financial Statements.

General

         The Company was formed in 1998. The Company's  income on a consolidated
basis is derived substantially from its investment in the Bank.

         The Bank's  results of  operations  depend  primarily  on net  interest
income,  which is determined by (i) the difference between rates of interest the
Bank  earns on its  interest-earning  assets  and the  rates  the  Bank  pays on
interest-bearing  liabilities  (interest  rate  spread),  and (ii) the  relative
amounts of interest-earning assets and interest-bearing  liabilities. The Bank's
results of  operations  are also  affected  by  noninterest  income,  including,
primarily,  income from customer  deposit  account  service  charges,  gains and
losses  from  the  sale  of  investments  and  mortgage-backed   securities  and
noninterest expense, including,  primarily,  compensation and employee benefits,
federal deposit insurance  premiums,  office occupancy cost, and data processing
cost.  The Bank's  results of  operations  are also  affected  significantly  by
general and economic and competitive conditions,  particularly changes in market
interest rates, government policies and actions of regulatory  authorities,  all
of which are beyond the Bank's control.

Market Risk Analysis

         Qualitative Analysis. The Bank's assets and liabilities may be analyzed
by  examining  the  extent to which  they are  interest  rate  sensitive  and by
monitoring  the  expected  effects of  interest  rate  changes on the Bank's net
portfolio value.

         An asset or liability is interest rate sensitive within a specific time
period if it will  mature or  reprice  within  that time  period.  If the Bank's
assets  mature  or  reprice  more  quickly  or  to a  greater  extent  than  its
liabilities,  then the Bank's net portfolio  value and net interest income would
tend to increase  during periods of rising  interest  rates but decrease  during
periods of falling  interest rates.  Conversely,  if the Bank's assets mature or
reprice more slowly or to a lesser extent than its liabilities,  then the Bank's
net  portfolio  value and net  interest  income  would tend to  decrease  during
periods of rising interest rates but increase during periods of falling interest
rates.  The Bank's policy has been to address the interest rate risk inherent in
the  historical  savings  institution  business of originating  long-term  loans
funded by  short-term  deposits  by  maintaining  sufficient  liquid  assets for
material and prolonged  changes in interest rates and by originating  loans with
shorter terms to maturity such as  construction,  commercial and consumer loans.
In addition, the Bank has invested in adjustable-rate mortgage-backed securities
as an interest rate risk management strategy.

                                        4
<PAGE>

         Quantitative  Analysis.  In order to encourage savings  associations to
reduce  their  interest  rate  risk,  the OTS  adopted a rule  incorporating  an
interest rate risk ("IRR") component into the risk- based capital rules. The IRR
component is a dollar  amount that will be deducted  from total  capital for the
purpose of calculating an institution's  risk-based  capital  requirement and is
measured  in terms of the  sensitivity  of its net  portfolio  value  ("NPV") to
changes in interest rates.  NPV is the difference  between incoming and outgoing
discounted  cash  flows  from  assets,  liabilities,   and  off-  balance  sheet
contracts. An institution's IRR is measured as the change to its NPV as a result
of a  hypothetical  200 basis point ("bp") change in market  interest  rates.  A
resulting change in NPV of more than 2% of the estimated  present value of total
assets  ("PV") will  require the  institution  to deduct from its capital 50% of
that  excess  change.  The rules  provide  that the OTS will  calculate  the IRR
component  quarterly  for each  institution.  Based on the Bank's asset size and
risk-based capital, the Bank has been informed by the OTS that it is exempt from
this rule. Nevertheless, the following table presents the Bank's NPV at December
31, 2000, as calculated by the OTS, based on quarterly  information  voluntarily
provided to the OTS.


       Changes                  Net Portfolio Value
      in Market      ------------------------------------------
    Interest Rates   $ Amount       $ Change          % Change    NPV Ratio(1)
    --------------   --------   -------------------    --------    ------------
    (basis points)             (Dollars in Thousands)
        + 300         $14,798        $ -2,996            -17%          10.81%
        + 200         $16,178        $ -1,617             -9%          11.44%
        + 100         $17,325        $   -469             -3%          11.87%
            0         $17,794        $     --             --           11.86%
        - 100         $16,983        $   -811             -5%          11.09%
        - 200         $14,366        $ -3,428            -19%           9.29%
        - 300         $11,662        $ -6,132            -34%           7.45%

-------------
(1)  Calculated as the estimated NPV divided by present value of total assets.

         Computations  of  prospective  effects of  hypothetical  interest  rate
changes are based on numerous  assumptions,  including relative levels of market
interest rates,  prepayments and deposit  run-offs and should not be relied upon
as  indicative  of actual  results.  Certain  shortcomings  are inherent in such
computations.   Although   certain  assets  and  liabilities  may  have  similar
maturities  or periods of  repricing,  they may react at different  times and in
different degrees to changes in market rates of interest.  The interest rates on
certain types of assets and  liabilities  may fluctuate in advance of changes in
market interest rates,  while rates on other types of assets and liabilities may
lag  behind  changes  in  market  interest  rates.  In the  event of a change in
interest  rates,   prepayments  and  early   withdrawal   levels  could  deviate
significantly  from those  assumed in making the  calculations  set forth above.
Additionally,  an  increased  credit  risk may result as many  borrowers  may be
unable to service their debt in the event of an interest rate increase.

                                        5
<PAGE>

         The Bank's  board of directors  reviews the Bank's asset and  liability
policies on an annual basis.  The board of directors  meets  quarterly to review
interest  rate risk and trends,  as well as  liquidity  and  capital  ratios and
requirements.  Management  administers  the policies and  determinations  of the
board of  directors  with respect to the Bank's  asset and  liability  goals and
strategies.  The  Bank  expects  that  its  asset  and  liability  policies  and
strategies  will  continue as described so long as  competitive  and  regulatory
conditions  in the  financial  institution  industry and market  interest  rates
continue as they have in recent years.

Financial Condition

         Total  assets  increased  $7.5  million  or 5.3% to $150.0  million  at
December 31, 2000 from $142.5  million at December  31,  1999.  The increase was
primarily  attributable  to an increase  of $16.3  million,  or 34.0%,  in loans
receivable,  net and a $1.6  million  increase  in cash  and  cash  equivalents,
partially  offset by decreases of $2.7  million,  or 13.2%,  in  mortgage-backed
securities  available for sale and $8.2 million,  or 14.2%,  in mortgage  backed
securities held to maturity.  Loans receivable  increased due to the purchase of
$14.2 million of one-to four family mortgage loans.

         Total  liabilities  increased $8.7 million or 7.1% to $132.4 million at
December 31, 2000 from $123.7  million at December  31,  1999.  The increase was
primarily attributable to a $9.5 million, or 23.5%, increase in FHLB borrowings.
The  growth  in the loan  portfolio  was  funded  by  principal  repayments  and
maturities  in the  mortgage-backed  securities  portfolio  in  addition to FHLB
borrowings  and was primarily  the result of  successful  purchasing of loans to
satisfy asset mix needs throughout the year.

         Total  stockholders'  equity  decreased  $1,256,000,  or 6.7% to  $17.6
million at  December  31,  2000 from $18.9  million at December  31,  1999.  The
decrease  was  primarily  attributable  to a $2.3  million  increase in treasury
stock, at cost, attributable to our stock repurchases during the year, partially
offset by an $850,000  increase in retained  earnings,  reflecting net income of
$1.1 million for 2000 and $252,000 in cash dividends paid on common stock during
2000.

                                        6
<PAGE>

Average Balance Sheet

         The following table sets forth a summary of average  balances of assets
and liabilities as well as average yield and rate information.  Average balances
are  based  upon  month-end  balances,  however,  we do not  believe  the use of
month-end  balances  differs  significantly  from an  average  based  upon daily
balances. There has been no tax equivalent adjustments made to yields.

<TABLE>
<CAPTION>

                                                                                  Year Ended December 31,
                                                       -----------------------------------------------------------------------------
                                                                       2000                                  1999
                                                       ------------------------------------  ---------------------------------------
                                                         Average                               Average
                                                       Outstanding   Interest                Outstanding    Interest
                                                         Balance    Earned/Paid  Yield/Rate    Balance     Earned/Paid    Yield/Rate
                                                         -------    -----------  ----------    -------     -----------    ----------
                                                                                 (Dollars in thousands)
<S>                                                   <C>         <C>            <C>      <C>              <C>             <C>
Interest-earning assets:
  Loans receivable(1)................................  $  60,375     $  4,529       7.50%    $  43,655        $3,345          7.66%
  Investment securities..............................      6,298          401       6.37%        6,155           391          6.35%
  Mortgage-backed securities.........................     72,624        4,832       6.65%       77,427         4,692          6.06%
  Interest-bearing deposits..........................      1,060           69       6.51%        1,733           121          6.98%
  FHLB stock.........................................      2,467          198       8.03%        1,594           108          6.78%
                                                       ---------     --------                ---------        ------
     Total interest-earning assets(1)................    142,824       10,029       7.02%      130,564         8,657          6.63%
                                                                     --------     ------                       -----        ------
Noninterest-earning assets...........................      6,365                                 6,222
                                                       ---------                             ---------
     Total assets....................................  $ 149,189                              $136,786
                                                        ========                               =======
Interest-bearing liabilities:
  NOW and investment deposits........................  $  24,142          559       2.32%    $  24,194           574          2.37%
  Savings and certificate accounts...................     57,748        2,936       5.08%       60,733         2,965          4.88%
  FHLB borrowings....................................     47,966        2,657       5.54%       30,096         1,486          4.94%
                                                       ---------     --------                 --------         -----
     Total interest-bearing liabilities..............    129,856        6,152       4.74%      115,023         5,025          4.37%
                                                                     --------     ------                       -----        ------
Noninterest-bearing liabilities:.....................      1,028                                 1,427
                                                       ---------                             ---------
  Total liabilities..................................    130,884                               116,450
                                                        --------                               -------
Stockholders' Equity.................................     18,305                                20,336
                                                       ---------                              --------
     Total liabilities and stockholders' equity......  $ 149,189                              $136,786
                                                        ========                               =======
Net interest income..................................                $  3,877                                 $3,632
                                                                     ========                                  =====
Net interest rate spread(2)..........................                               2.28%                                     2.26%
                                                                                  ======                                    ======
Net earning assets...................................  $  12,968                            $   15,541
                                                       =========                            ==========
Net yield on interest-earning assets(3)..............                               2.71%                                     2.78%
                                                                                  ======                                    ======
Average interest-earning assets to average
  interest-bearing liabilities.......................                             109.99%                                   113.51%
                                                                                  ======                                    ======
</TABLE>
--------------------
(1)  Includes  non-accrual  loans and  loans  held-for-sale.  Calculated  net of
     deferred loan fees, loan discounts,  loans in process and the allowance for
     loan losses.
(2)  Net interest rate spread represents the difference between the average rate
     on  interest-earning  assets  and  the  average  cost  of  interest-bearing
     liabilities.
(3)  Net  interest  margin  represents  net interest  income  divided by average
     interest-earning assets.

                                        7
<PAGE>

         The table below sets forth  certain  information  regarding  changes in
interest  income  and  interest  expense  for the  periods  indicated.  For each
category  of   interest-earning   assets  and  interest-  bearing   liabilities,
information  is  provided  on  changes  attributable  to (i)  changes  in volume
(changes  in  average  volume  multiplied  by old rate);  (ii)  changes in rates
(changes in rate multiplied by old average volume); (iii) changes in rate-volume
(changes in rate multiplied by the change in average volume).

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                           --------------------------------------------
                                                          2000 vs. 1999
                                           --------------------------------------------
                                                       Increase/(Decrease)
                                                             Due to
                                           --------------------------------------------
                                                                   Rate/
                                              Volume     Rate      Volume      Total
                                              ------     ----      ------      -----
                                                          (In thousands)
<S>                                        <C>        <C>        <C>        <C>
Interest-earning assets:
  Loans receivable(1) ...................   $ 1,281    $   (70)   $   (27)   $ 1,184
  Investment securities .................         9          1          0         10
  Mortgage-backed securities ............      (291)       460        (29)       140
  Interest-bearing deposits .............       (47)        (8)         3        (52)
  FHLB stock ............................        59         20         11         90
                                            -------    -------    -------    -------
     Total interest-earning assets ......     1,011        402        (41)     1,372
                                            -------    -------    -------    -------

Interest-bearing liabilities:
  NOW and money market deposits .........        (1)       (14)         0        (15)
  Savings and certificate accounts ......      (146)       123         (6)       (29)
  FHLB borrowings .......................       882        181        108      1,171
                                            -------    -------    -------    -------
     Total interest-bearing liabilities .       735        290        102      1,127
                                            -------    -------    -------    -------

Increase in net interest income .........   $   276    $   112    $  (143)   $   245
                                            =======    =======    =======    =======
</TABLE>

                                        8
<PAGE>

Results of Operations for the Years Ended December 31, 2000 and 1999

         Net  Income.  Our net  income  increased  $247,000  for the year  ended
December  31,  2000,  to $1.1 million as compared to $855,000 for the year ended
December 31, 1999. This increase was primarily  attributable  to a $245,000,  or
6.7%,  increase in net  interest  income and a $169,000,  or 19.4%,  increase in
noninterest  income,   offset  slightly  by  a  $75,000,  or  2.4%  increase  in
noninterest expense.

         Net  Interest  Income.  Net  interest  income  is the most  significant
component of our income from  operations.  Net interest income is the difference
between  interest  we receive on  interest-  earning  assets,  primarily  loans,
investment   and   mortgage-backed   securities   and   interest   we   pay   on
interest-bearing  liabilities,  primarily deposits and borrowings.  Net interest
income depends on the volume of and rates earned on interest-earning  assets and
the volume of and rates paid on interest- bearing liabilities.

         Our net interest income increased $245,000,  or 6.7%, to $3,877,000 for
the year ended December 31, 2000,  compared to $3,632,000 for 1999. The increase
in net  interest  income was due to an increase  in average  balance of interest
earning  assets from $130.6  million in 1999 to $142.8 million in 2000, and a 39
basis point increase in the average  interest rate earned for 2000. The increase
in average  interest  earning assets was primarily the result of a $16.7 million
increase in the average balance of loans  receivable,  net from $43.7 million in
1999 to $60.4 million in 2000.

         Our interest expense  increased  primarily as the result of an increase
in the average  balance of FHLB  borrowings  from $30.1 million in 1999 to $48.0
million  in 2000.  The  increase  in our  average  balance  of  interest-bearing
liabilities  from $115.0 million in 1999 to $129.9 million in 2000 reflects this
increase in FHLB advances.  We increased our FHLB borrowings  during the year to
fund the increase in our loans receivable.

         Our net interest  rate spread  increased  from 2.26% for the year ended
December 31, 1999 to 2.28% for the year ended  December 31, 2000,  primarily due
to the increase in the average balance of loans  receivable which produce higher
yields than other assets.

         Provision  for Loan Losses.  Our provision for loan loss did not change
and was $36,000 for the years ended  December 31, 2000 and 1999.  The  allowance
for loan losses was $256,000 or 0.40% of net loans  outstanding  at December 31,
2000 compared to $241,000 or 0.50% of net loan outstanding at December 31, 1999.

         Historically, we have emphasized our loss experience over other factors
in establishing the provision for loan losses.  We review the allowance for loan
losses in relation to (i) our past loan loss experience, (ii) known and inherent
risks in our portfolio,  (iii) adverse situations that may affect the borrower's
ability to repay, (iv) the estimated value of any underlying collateral, and (v)
current economic  conditions.  Management believes the allowance for loan losses
is at a level that is adequate to provide for estimated losses.  However,  there
can be no assurance that further additions will not be made to the allowance and
that such losses will not exceed the estimated amount.

                                        9
<PAGE>

         Noninterest income. Our noninterest income increased $169,000, or 19.4%
from $872,000 for the year ended  December 31, 1999 to $1,041,000  for 2000. The
increase  in our  noninterest  income  was due to a  $49,000  increase  in other
noninterest  income consisting of ATM network fees, and a continued  increase in
our deposit account service fee income,  reflecting an increase in the volume of
fees collected.

         Noninterest  expense.  Our noninterest  expense increased  $75,000,  or
2.4%,  from  $3,091,000  in 1999 to  $3,166,000  in 2000.  The  increase  in our
non-interest  expense was due primarily to increases of $62,000 in compensation,
$23,000 in ESOP share  value,  $19,000 in  Restricted  Stock Plan and $20,000 in
employee  medical  insurance.   Occupancy  expense  also  increased  by  $25,000
reflecting updating costs for facilities.  These increases were partially offset
by a $39,000  decrease in advertising and a $27,000  reduction in FDIC insurance
expense.

         Income Tax  Expense.  Our income tax  expense  increased  $92,000  from
$522,000 for 1999 to $614,000  for 2000.  Our  effective  tax rate was 35.8% and
37.9% for the years ended December 31, 2000 and 1999, respectively.

Liquidity and Capital Resources

         We are required to maintain  minimum levels of liquid assets as defined
by OTS regulations.  This requirement,  which varies from time to time depending
upon economic  conditions and deposit  flows,  is based upon a percentage of our
deposits and short-term  borrowings.  The required ratio currently is 4% and our
regulatory  liquidity ratio average was 65.5% and 50.8% at December 31, 2000 and
1999, respectively.

         Our  primary  sources  of funds are  deposits,  repayment  of loans and
mortgage-backed   securities,    maturities   of   investment   securities   and
interest-bearing  deposits  with other banks,  advances from the FHLB of Topeka,
and funds  provided  by  operations.  While  scheduled  repayments  of loans and
mortgage-backed   securities  and   maturities  of  investment   securities  are
predictable  sources of funds,  deposit flows and loan  prepayments  are greatly
influenced  by the general  level of interest  rates,  economic  conditions  and
competition.  We use our liquidity  resources  principally  to fund existing and
future loan  commitments,  maturing  certificates  of deposit and demand deposit
withdrawals,  to invest in other interest-earning assets, to maintain liquidity,
and to meet operating expenses.

         Net cash  provided by our  operating  activities  (the cash  effects of
transactions  that enter into our  determination  of net  income  e.g.  non-cash
items,  amortization and  depreciation,  provision for loan losses) for the year
ended  December 31, 2000 was  $1,590,000 as compared to $1,250,000  for the year
ended December 31, 1999.

         Net cash used in our investing  activities (i.e. cash payments and cash
receipts,   primarily  from  our  investment   securities  and   mortgage-backed
securities  portfolio and our loan  portfolio)  for the year ended  December 31,
2000 totaled $6.2 million, a change of $33.5 million from December 31, 1999. The
change  was  primarily   attributable   to  no  purchases  of   investment   and
mortgage-backed  securities  in 2000 as  compared to $50.8  million in 1999,  an
increase in loans  purchased  of $5.6 million from $8.7 million in 1999 to $14.3
million in 2000 and an increase in loan originations, net

                                       10
<PAGE>

of repayments  from  $1,883,000  provided in 1999 to $1,986,000 used in 2000. In
addition,  paydown of mortgage-backed securities decreased from $19.8 million in
1999 to $10.8 million in 2000.

         Net cash  provided by our  financing  activities  for 2000 totaled $6.2
million,  a decrease of $28.2 million from 1999. This change was attributable to
a $23 million decrease in arbitrage transactions funded by FHLB borrowings and a
$7,350,000 increase in repayments of FHLB advances. These changes were offset by
a $900,000 decrease in cash used for stock repurchases,  reflecting $2.3 million
used to purchase  treasury  stock in 2000 as compared  to $3.2  million  used to
purchase treasury stock and stock for our Restricted Stock Plan in 1999, further
offset by a $1.3 million smaller net decrease in deposits during 2000.

Impact of Recently Issued Accounting Standards

         The FASB issued  SFAS No.  133,  Accounting  for  Derivative  Financial
Instruments and Hedging  Activities,  in June 1998.  This statement  establishes
accounting and reporting standards for derivative instruments, including certain
derivative  instruments  embedded in other contracts and for hedging activities.
SFAS No. 133, as amended by SFAS No. 137, is effective  for all fiscal  quarters
of fiscal years beginning after June 15, 2000 and will be adopted by the Company
January 1, 2001. The adoption of SFAS No. 133 is not expected to have a material
impact on the Company's consolidated financial statements.

Impact of Inflation and Changing Prices

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

                                       11
<PAGE>




                               [KPMG LETTERHEAD]




                          Independent Auditors' Report



     The Board of Directors
     First Kansas Financial Corporation:


     We have  audited  the  accompanying  consolidated  balance  sheets of First
     Kansas  Financial  Corporation  and subsidiary (the Company) as of December
     31, 2000 and 1999,  and the related  consolidated  statements  of earnings,
     stockholders' equity and comprehensive income, and cash flows for the years
     then ended. These consolidated  financial statements are the responsibility
     of the Company's management. Our responsibility is to express an opinion on
     these consolidated financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
     accepted in the United States of America.  Those standards  require that we
     plan and perform the 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 First
     Kansas  Financial  Corporation  and  subsidiary as of December 31, 2000 and
     1999 and the results of their operations and their cash flows for the years
     then ended, in conformity with accounting  principles generally accepted in
     the United States of America.


                                        /s/KPMG LLP


     January 19, 2001


                                      F-1
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                           Consolidated Balance Sheets

                           December 31, 2000 and 1999
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                           Assets                                                 2000         1999
                                                                                                ----------   ----------
<S>                                                                                           <C>           <C>
Cash and cash equivalents (note 2)                                                              $   5,723        4,090
Investment securities held-to-maturity, at cost
    (approximate fair value of $6,194 and $5,963, respectively) (note 3)                            6,322        6,261
Mortgage-backed securities available-for-sale, at fair value (note 4)                              18,051       20,795
Mortgage-backed securities held-to-maturity, at cost
    (approximate fair value of $48,897 and $55,597, respectively) (note 4)                         49,751       57,965
Loans receivable, net (note 5)                                                                     64,001       47,751
Stock in Federal Home Loan Bank (FHLB) of Topeka, at cost                                           2,650        2,114
Premises and equipment, net (note 6)                                                                2,130        2,213
Real estate held for development (note 7)                                                             357          357
Accrued interest receivable:
    Investment and mortgage-backed securities                                                         456          506
    Loans receivable                                                                                  316          230
Prepaid expenses and other assets                                                                     283          264
                                                                                                ----------   ----------
            Total assets                                                                        $ 150,040      142,546
                                                                                                ==========   ==========
                            Liabilities and Stockholders' Equity
Liabilities:
    Deposits (note 9)                                                                           $  81,484       82,317
    Advances from borrowers for property taxes and insurance                                          196          142
    Borrowings from FHLB of Topeka (note 10)                                                       50,000       40,500
    Accrued interest payable and other liabilities (note 11)                                          743          714
                                                                                                ----------   ----------
            Total liabilities                                                                     132,423      123,673
                                                                                                ----------   ----------
Stockholders' equity (note 12):
    Preferred stock, $.10 par value; 2,000,000 shares authorized, none issued --
    -- Common stock, $.10 par value; 8,000,000 shares authorized, 1,553,938
      shares issued                                                                                   155          155
    Additional paid-in capital                                                                     14,867       14,842
    Treasury stock, 416,390 and 221,629 shares, respectively, at cost                              (4,758)      (2,495)
    Retained earnings                                                                               9,139        8,289
    Unearned compensation                                                                          (1,387)      (1,623)
    Accumulated other comprehensive income (loss)                                                    (399)        (295)
                                                                                                ----------   ----------
            Total stockholders' equity                                                             17,617       18,873

Commitments (note 5)
                                                                                                ----------   ----------
            Total liabilities and stockholders' equity                                        $   150,040      142,546
                                                                                                ==========   ==========
</TABLE>
See accompanying notes to consolidated financial statements.

                                      F-2
<PAGE>

                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                       Consolidated Statements of Earnings

                     Years ended December 31, 2000 and 1999
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                  2000      1999
                                                                 -------   -------
<S>                                                            <C>        <C>
Interest income:
   Loans                                                         $ 4,529     3,345
   Investment securities                                             401       391
   Mortgage-backed securities                                      4,832     4,692
   Interest-bearing deposits                                          69       121
   Dividends on FHLB stock                                           198       108
                                                                 -------   -------
           Total interest income                                  10,029     8,657
                                                                 -------   -------
Interest expense:
   Deposits (note 9)                                               3,495     3,539
   Borrowings                                                      2,657     1,486
                                                                 -------   -------
           Total interest expense                                  6,152     5,025
                                                                 -------   -------
           Net interest income                                     3,877     3,632

Provision for loan losses (note 5)                                    36        36
                                                                 -------   -------
           Net interest income after provision for loan losses     3,841     3,596
                                                                 -------   -------
Noninterest income:
   Deposit account service fees                                      864       744
   Other                                                             177       128
                                                                 -------   -------
           Total noninterest income                                1,041       872
                                                                 -------   -------
Noninterest expense:
   Compensation and benefits (note 12)                             1,678     1,525
   Occupancy and equipment                                           402       377
   Federal deposit insurance premiums and assessments                 56        83
   Data processing                                                   205       233
   Deposit account processing fees                                   213       210
   Amortization of premium on deposits assumed                        61        61
   Supplies expense                                                   87        75
   Advertising                                                       128       167
   Other                                                             336       360
                                                                 -------   -------
           Total noninterest expense                               3,166     3,091
                                                                 -------   -------
           Earnings before income tax expense                      1,716     1,377

Income tax expense (note 11)                                         614       522
                                                                 -------   -------
           Net earnings                                          $ 1,102       855
                                                                 =======   =======
Net earnings per share - basic and diluted                       $  0.96      0.63
                                                                 =======   =======
</TABLE>
See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>

                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

    Consolidated Statements of Stockholders' Equity and Comprehensive Income

                     Years ended December 31, 2000 and 1999
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                      Accumu-
                                                                                                       lated
                                                                                                       other
                                                          Addi-                                       compre-
                                                         tional                           Unearned    hensive
                                  Preferred     Common    paid-in   Treasury  Retained     compen-    income
                                    stock       stock     capital    stock    earnings     sation     (loss)      Total
                                 -----------  ---------- -------------------- ----------  ----------  --------  ---------
<S>                            <C>             <C>      <C>         <C>        <C>       <C>          <C>      <C>
Balance, December 31, 1998       $       --      155      14,834        --       7,655     (1,181)       (23)    21,440

Net earnings                                                                       855                              855
Change in unrealized loss
   on available-for-sale
   securities, net of tax                                                                               (272)      (272)
                                                                                                                --------
           Total comprehensive
             income                                                                                                 583
                                                                                                                --------
Purchase of 221,629 shares of
   stock for the treasury                --       --          --    (2,495)         --         --         --     (2,495)
Purchase of 62,158 shares
   of stock for the restricted
   stock plan (RSP)                      --       --          --        --          --       (660)        --       (660)
Allocation of employee stock
   ownership plan (ESOP) shares          --       --           8        --          --        124         --        132
Amortization of RSP shares               --       --          --        --          --         94         --         94
Cash dividends paid
   ($.15 per share)                      --       --          --        --        (221)        --         --       (221)
                                 ----------  ---------- --------  ---------- ----------  ----------  --------  --------

Balance, December 31, 1999               --      155      14,842    (2,495)      8,289     (1,623)      (295)    18,873

Net earnings                                                                     1,102                            1,102
Change in unrealized loss
   on available-for-sale
   securities, net of tax                                                                               (104)      (104)
                                                                                                                --------
           Total comprehensive
             income                                                                                                 998
                                                                                                                --------
Purchase of 194,761 shares of
   stock for the treasury                --       --          --    (2,263)         --         --         --     (2,263)
Allocation of ESOP shares                --       --          25        --          --        124         --        149
Amortization of RSP shares               --       --          --        --          --        112         --        112
Cash dividends paid
   ($.20 per share)                      --       --          --        --        (252)        --         --       (252)
                                 -----------  ------     -------   ---------- ----------  ----------  --------  --------
Balance, December 31, 2000       $       --      155      14,867    (4,758)      9,139     (1,387)      (399)    17,617
                                 ===========  ======     =======   ========== ==========  ==========  ========  ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                      Consolidated Statements of Cash Flows

                     Years ended December 31, 2000 and 1999
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                       2000        1999
                                                                                     --------    --------
<S>                                                                                <C>           <C>
Cash flows from operating activities:
    Net earnings                                                                     $  1,102         855
    Adjustments to reconcile net earnings to net cash provided by operating
      activities:
        Provision for loan losses                                                          36          36
        Depreciation                                                                      185         160
        Amortization of premium on deposits assumed                                        61          61
        FHLB stock dividends                                                               --        (108)
        Amortization of loan fees and premiums                                             29         (41)
        Accretion of discounts and amortization of premiums on
          investment and mortgage-backed securities, net                                  (69)        (19)
        Gain on sales of loans, net                                                        --          (5)
        Allocation of ESOP shares and amortization of RSP shares                          261         226
        Proceeds from sales of loans                                                       --         247
        Origination of loans for sale                                                      --        (242)
        Change in accrued interest receivable, prepaids, and other assets                 (98)       (217)
        Change in accrued interest payable and other liabilities                           83         297
                                                                                     --------    --------
             Net cash provided by operating activities                                  1,590       1,250
                                                                                     --------    --------
Cash flows from investing activities:
    Loan originations, net of repayments                                               (1,986)      1,883
    Loans purchased                                                                   (14,347)     (8,702)
    Maturities/calls of investment securities held-to-maturity                             40          34
    Principal repayments and maturities of mortgage-backed securities
      available-for-sale                                                                2,576       8,532
    Principal repayments and maturities of mortgage-backed securities
      held-to-maturity                                                                  8,192      11,291
    Purchases of investment securities held-to-maturity                                    --      (1,490)
    Purchases of mortgage-backed securities available-for-sale                             --      (2,496)
    Purchases of mortgage-backed securities held-to-maturity                               --     (46,769)
    Proceeds from sale of real estate owned                                                --         142
    Purchase of FHLB stock                                                               (536)     (1,497)
    Decrease in real estate held for development                                           --           4
    Additions of premises and equipment, net                                             (102)       (598)
                                                                                     --------    --------
             Net cash used in investing activities                                   $ (6,163)    (39,666)
                                                                                     --------    --------
</TABLE>
                                                                     (Continued)
                                      F-5

<PAGE>

                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                Consolidated Statements of Cash Flows, Continued

                     Years ended December 31, 2000 and 1999
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                        2000        1999
                                                                      --------    --------
<S>                                                                 <C>          <C>
Cash flows from financing activities:
    Net decrease in deposits                                          $   (833)     (2,119)
    Net increase in advances from borrowers for taxes and insurance         54           8
    Repayment of borrowings from FHLB                                  (10,500)     (3,150)
    Proceeds from borrowings from FHLB                                  20,000      43,000
    Purchases of common stock for treasury                              (2,263)     (2,495)
    Purchases of common stock for RSP                                       --        (660)
    Cash dividends paid on common stock                                   (252)       (221)
                                                                      --------    --------
             Net cash provided by financing activities                   6,206      34,363
                                                                      --------    --------
             Net increase (decrease) in cash and cash equivalents        1,633      (4,053)

Cash and cash equivalents at beginning of year                           4,090       8,143
                                                                      --------    --------
Cash and cash equivalents at end of year                              $  5,723       4,090
                                                                      ========    ========

Supplemental disclosure of cash flow information:
    Cash paid during the year for income taxes                        $    601         378
                                                                      ========    ========
    Cash paid during the year for interest                            $  6,071       4,847
                                                                      ========    ========
Noncash activities - loans transferred to real estate owned           $     18         142
                                                                      ========    ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


  (1)   Summary of Significant Accounting Policies

        (a)   Principles of Consolidation and Basis of Presentation

              The  consolidated  financial  statements  include the  accounts of
              First   Kansas   Financial   Corporation   and  its  wholly  owned
              subsidiary,  First  Kansas  Federal  Savings Bank (the "Bank" and,
              collectively,   the   "Company").    Intercompany   balances   and
              transactions  have been  eliminated.  The  Company is  principally
              engaged in single family home lending in the State of Kansas.  The
              Company also makes consumer and commercial  loans depending on the
              demand and management's assessment of the quality of such loans.

        (b)   Cash Equivalents

              Cash  equivalents  consist  of  interest-bearing  deposits  in the
              Federal  Home Loan  Bank  (FHLB)  of  Topeka  and other  financial
              institutions with an original maturity of three months or less.

        (c)   Investment Securities

              The Company  accounts for its investment  securities in accordance
              with Statement of Financial  Accounting  Standards (SFAS) No. 115,
              Accounting for Certain  Investments in Debt and Equity Securities.
              Accordingly, investments are classified as held-to-maturity, which
              are carried at amortized  cost, or  available-for-sale,  which are
              carried at fair value with  unrealized  gains and losses  excluded
              from  earnings  and  reported  in a  separate  component  of other
              comprehensive income, net of related income taxes.

              Amortization  and accretion of premiums and discounts are computed
              using the interest  method over the estimated  life of the related
              security and are  recorded as an  adjustment  of interest  income.
              Gains  and  losses  on sales are  calculated  using  the  specific
              identification method.

        (d)   Loans

              Loans  receivable  that  management  has the intent and ability to
              hold until  maturity or pay off are reported at their  outstanding
              principal balance adjusted for any charge-offs,  the allowance for
              loan losses and any deferred  fees or costs on  originated  loans,
              and unamortized premiums or discounts on purchased loans.

              The Company determines at the time of origination whether mortgage
              loans  will be held  for the  Company's  portfolio  or sold in the
              secondary  market.  Loans  originated and intended for sale in the
              secondary  market are recorded at the lower of  aggregate  cost or
              estimated  market value.  Fees received on such loans are deferred
              and recognized in income as part of the gain or loss on sale.

              Loan origination,  commitment and related fees, and certain direct
              origination costs related to loans for the Company's portfolio are
              deferred.  The  deferred  fees  and  costs  are  amortized  as  an
              adjustment of yield over the  contractual  term of the  individual
              loans using the interest method.

                                      F-7                            (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

        (e)   Mortgage Banking Activities

              At December 31, 2000 and 1999, the Company was servicing loans for
              others  amounting to $283,000  and  $450,000,  respectively.  Loan
              servicing  fees include  servicing fees from investors and certain
              charges collected from borrowers, such as late payment fees, which
              are recorded when received.

        (f)   Provisions for Losses on Loans and Interest Receivable

              Provisions   for  losses  on  loans   receivable  are  based  upon
              management's  estimate  of the  amount  required  to  maintain  an
              adequate  allowance for losses,  relative to the risks in the loan
              portfolio.   This  estimate  is  based  on  reviews  of  the  loan
              portfolio,  including  assessment of the estimated net  realizable
              value of the related underlying  collateral,  and consideration of
              historical loss experience,  current economic conditions, and such
              other factors which, in the opinion of management, deserve current
              recognition. Loans are charged off when the probability of loss is
              established,   taking  into  consideration  such  factors  as  the
              borrower's  financial  condition,   underlying   collateral,   and
              guarantees.  Loans are also  subject to  periodic  examination  by
              regulatory  agencies.  Such  agencies may require  charge-offs  or
              additions  to the  allowance  based  upon  their  judgments  about
              information available at the time of their examination.

              Accrual  of  interest  income on loans is  discontinued  for those
              loans with interest more than ninety days  delinquent or sooner if
              management   believes   collectibility  of  the  interest  is  not
              probable.  Management's  assessment of collectibility is primarily
              based  on a  comparison  of  the  estimated  value  of  underlying
              collateral  to the related  loan and accrued  interest  receivable
              balances.  When  interest  accrual  is  discontinued,  all  unpaid
              accrued  interest is reversed.  Nonaccruing  loans are returned to
              accrual status when principal and interest are reasonably  assured
              and a  consistent  record of  performance  has been  demonstrated.
              Payments  received on impaired or nonaccrual  loans are applied to
              principal and interest in accordance with the contractual terms of
              the loan unless full  payment of  principal  is not  expected,  in
              which case both  principal  and  interest  payments  received  are
              applied as a reduction of the carrying value of the loan.

              A loan is considered impaired when it is probable the Company will
              be  unable  to  collect  all  amounts   due--both   principal  and
              interest--according   to  the   contractual   terms  of  the  loan
              agreement.  When measuring  impairment,  the expected  future cash
              flows of an impaired loan are  discounted at the loan's  effective
              interest rate.  Impairment may also be measured by reference to an
              observable  market price, if one exists,  or the fair value of the
              collateral  for a  collateral-dependent  loan.  Regardless  of the
              historical   measurement   method  used,   the  Company   measures
              impairment  based on the  fair  value  of the  collateral  when it
              determines foreclosure is probable. Additionally,  impairment of a
              restructured  loan is measured by  discounting  the total expected
              future  cash flows at the loan's  effective  rate of  interest  as
              stated in the original loan agreement.

              The Company  applies the methods  described  above to  multifamily
              real estate loans,  commercial real estate loans, and restructured
              loans.    Smaller   balance,    homogeneous    loans,    including
              one-to-four-family residential and construction loans and consumer
              loans, are collectively evaluated for impairment.

                                      F-8                            (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

        (g)   Real Estate Owned and Held for Development

              Real estate properties  acquired through foreclosure are initially
              recorded  at the  lower  of cost or  estimated  fair  value,  less
              selling  costs,  at the date of  foreclosure.  Costs  relating  to
              development and improvement of property are  capitalized,  whereas
              holding  costs  are  expensed  when   incurred.   Valuations   are
              periodically  performed by management  and an allowance for losses
              is  established by a charge to operations if the carrying value of
              a property exceeds its estimated fair value, less selling costs.

              Real estate held for development  consists of a parcel of land and
              improvements zoned for commercial development.  The development is
              carried at cost. Direct costs, including interest, are capitalized
              as property costs during the  development  period.  Gains on sales
              are  recognized  by  allocating  costs to  parcels  sold using the
              relative fair value method.

        (h)   Stock in FHLB of Topeka

              The  Company  is a member of the FHLB  system.  As a  member,  the
              Company  is  required  to  purchase  and hold stock in the FHLB of
              Topeka  in an  amount  equal to the  greater  of (a) 1% of  unpaid
              residential loans, (b) 5% of outstanding FHLB advances, or (c) .3%
              of total assets. FHLB stock is carried at cost.

        (i)   Premises and Equipment

              Premises  and  equipment  are  stated  at  cost  less  accumulated
              depreciation.  Depreciation  is provided using both  straight-line
              and  accelerated  methods over the  estimated  useful lives of the
              assets,  which  range  from  three  to  thirty-five  years.  Major
              replacements   and  betterments   are  capitalized   while  normal
              maintenance and repairs are charged to expense as incurred.  Gains
              or losses on dispositions are reflected in current operations.

        (j)   Income Taxes

              Deferred tax assets and  liabilities are recognized for the future
              tax   consequences   attributable   to  differences   between  the
              consolidated  financial  statement  carrying  amounts of  existing
              assets and liabilities and their respective  income tax bases. The
              effect on deferred tax assets and  liabilities  of a change in tax
              rate is  recognized  in income in the  period  that  includes  the
              enactment date.

        (k)   Use of Estimates

              Management  of the  Company  has made a number  of  estimates  and
              assumptions  relating to the  reporting of assets and  liabilities
              and the disclosure of contingent assets and liabilities to prepare
              these  consolidated   financial   statements  in  conformity  with
              accounting  principles  generally accepted in the United States of
              America. Actual results could differ from those estimates.

                                      F-9                            (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


        (l)   New Accounting Pronouncements

              The  Financial  Accounting  Standards  Board  issued SFAS No. 133,
              Accounting  for  Derivative  Financial   Instruments  and  Hedging
              Activities,  in June 1998. This statement  establishes  accounting
              and reporting  standards  for  derivative  instruments,  including
              certain derivative instruments embedded in other contracts and for
              hedging  activities.  SFAS No. 133, as amended by SFAS No. 137 and
              SFAS No. 138, is effective for all fiscal quarters of fiscal years
              beginning  after June 15,  2000 and will be adopted by the Company
              January  1,  2001.  The  adoption  of SFAS No. 133 will not have a
              material   impact   on  the   Company's   consolidated   financial
              statements.

        (m)   Earnings Per Common Share

              Basic earnings per share is based upon the weighted average number
              of common shares outstanding  during the periods presented.  Basic
              earnings  per share  exclude  dilution and is computed by dividing
              income  available to common  stockholders by the weighted  average
              number of common  shares  outstanding  during the period.  Diluted
              earnings per share  include the potential  dilutive  common shares
              outstanding during the period.  Unallocated shares of common stock
              held by the employee stock  ownership plan are not included in the
              weighted average shares outstanding computation.

              The following schedule summarizes the number of average shares and
              equivalents used in the computation of earnings per share:

                                                  2000           1999
                                              -------------  -------------

Basic shares outstanding                         1,152,383      1,361,335
Dilutive effect of stock options                         -          1,698
                                              -------------  -------------
             Diluted shares outstanding          1,152,383      1,363,033
                                              =============  =============

  (2)   Cash and Cash Equivalents

        A summary of cash and cash equivalents follows (in thousands):

                                                       2000      1999
                                                      ------    ------

          Cash on hand                                $  838     1,923
          Deposits at other financial institutions     2,785     2,167
          Overnight FHLB deposits                      2,100         -
                                                      ------     -----
                                                      $5,723     4,090
                                                      ======     =====

                                      F-10                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


  (3)   Investment Securities

        A summary of  investment  securities  held-to-maturity  and  information
        relating to amortized  cost,  approximate  fair values,  and  unrealized
        gains  (losses)  at  December  31,  2000  and  1999  is as  follows  (in
        thousands):
<TABLE>
<CAPTION>
                                                                                      2000
                                                          ----------------------------------------------------------
                                                            Amortized       Unrealized      Unrealized       Fair
                                                              cost             gains          losses        value
                                                          --------------   --------------  --------------  ---------
<S>                                                     <C>                  <C>             <C>           <C>
U. S. government and agency obligations
    maturing after one year but within five years         $    1,000               -              (1)           999
U. S. government and agency obligations
    maturing after five years but within ten years             2,000               -             (43)         1,957
U. S. government and agency obligations
    maturing after ten years                                   1,333               -             (45)         1,288
State and municipal obligations maturing
    after ten years                                            1,116               -             (39)         1,077
Other debt securities maturing after
    ten years                                                    873               -               -            873
                                                          --------------   --------------  --------------  ---------

                                                          $    6,322               -            (128)         6,194
                                                          ==============   ==============  ==============  =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                      1999
                                                          ----------------------------------------------------------
                                                            Amortized       Unrealized      Unrealized       Fair
                                                              cost             gains          losses        value
                                                          --------------   --------------  --------------  ---------
<S>                                                     <C>                  <C>             <C>           <C>
U. S. government and agency obligations
    maturing after one year but within five years         $    1,000               -             (11)           989
U. S. government and agency obligations
    maturing after five years but within ten years             2,000               -            (111)         1,889
U. S. government and agency obligations
    maturing after ten years                                   1,232               -             (49)         1,183
State and municipal obligations maturing
    after ten years                                            1,115               -            (127)           988
Other debt securities maturing after
    ten years                                                    914               -               -            914
                                                          --------------   --------------  --------------  ---------
                                                          $    6,261               -            (298)         5,963
                                                          ==============   ==============  ==============  =========
</TABLE>

                                      F-11                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


  (4)   Mortgage-Backed Securities

        A summary of  mortgage-backed  securities  and  information  relating to
        amortized cost, fair values,  and unrealized  gains (losses) at December
        31, 2000 and 1999 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                            2000
                                                ----------------------------------------------------------
                                                  Amortized      Unrealized       Unrealized       Fair
                                                    cost            gains           losses        value
                                                --------------  --------------   -------------   ---------
<S>                                           <C>                   <C>             <C>          <C>
Available-for-sale:
    Government agency mortgage-
      backed securities:
        Federal Home Loan Mortgage
           Corporation (FHLMC)                  $     1,290             -              (34)         1,256
        Federal National Mortgage
           Association (FNMA)                         1,732            10               (6)         1,736
        Government National Mortgage
           Association (GNMA)                         2,790            25                -          2,815
    Collateralized mortgage obligations              12,844             -             (600)        12,244
                                                --------------  --------------   -------------   ---------
                                                $    18,656            35             (640)        18,051
                                                ==============  ==============   =============   =========
Held-to-maturity:
    Government agency mortgage-
      backed securities:
        FHLMC                                   $        35             1                -             36
        FNMA                                         14,194            16             (274)        13,936
        GNMA                                         17,784            12             (267)        17,529
    Collateralized mortgage obligations              17,738            12             (354)        17,396
                                                --------------  --------------   -------------   ---------
                                                $    49,751            41             (895)        48,897
                                                ==============  ==============   =============   =========
</TABLE>

                                      F-12                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


<TABLE>
<CAPTION>
                                                                            1999
                                                ----------------------------------------------------------
                                                  Amortized      Unrealized       Unrealized       Fair
                                                    cost            gains           losses        value
                                                --------------  --------------   -------------   ---------
<S>                                            <C>                 <C>             <C>          <C>
Available-for-sale:
    Government agency mortgage-
      backed securities:
        FHLMC                                   $     1,538             -              (27)         1,511
        FNMA                                          2,658            19              (35)         2,642
        GNMA                                          3,411            21                -          3,432
    Collateralized mortgage obligations              13,634            17             (441)        13,210
                                                --------------  --------------   -------------   ---------
                                                $    21,241            57             (503)        20,795
                                                ==============  ==============   =============   =========
Held-to-maturity:
    Government agency mortgage-
      backed securities:
        FHLMC                                   $        66             1                -             67
        FNMA                                         15,677             5             (816)        14,866
        GNMA                                         19,489            16             (895)        18,610
    Collateralized mortgage obligations              22,733             -             (679)        22,054
                                                --------------  --------------   -------------   ---------
                                                $    57,965            22           (2,390)        55,597
                                                ==============  ==============   =============   =========
</TABLE>

        The Company's portfolio of government agency mortgage-backed  securities
        and federal agency-backed  collateralized  mortgage obligations consists
        primarily  of  first  and  second  tranche   securities   with  expected
        maturities of three to five years.  At December 31, 2000, the government
        agency  mortgage-backed  securities  had a carrying value of $37,820,000
        and consisted of approximately  $31,912,000 of fixed rate securities and
        $5,908,000  of variable rate  securities.  The  collateralized  mortgage
        obligations  had a  carrying  value  of  $29,982,000  and  consisted  of
        approximately  $15,937,000 of fixed rate  securities and  $14,045,000 of
        variable rate  securities.  Collateralized  mortgage  obligations of the
        Company are generally government agency guaranteed.  There were no sales
        of mortgage-backed securities during 2000 and 1999.

        At  December  31,  2000  and  1999,  mortgage-backed  securities  with a
        carrying value of approximately $1,125,000 were pledged to secure public
        funds on deposit.


                                      F-13                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


  (5)   Loans Receivable

        Loans receivable  consist of the following at December 31, 2000 and 1999
        (in thousands):
<TABLE>
<CAPTION>
                                                                  2000        1999
                                                                ---------   ---------
<S>                                                        <C>             <C>
Mortgage loans:
    One-to-four-family                                          $ 59,144      43,760
    Commercial                                                       848         567
    Land                                                             775         278
    Construction                                                     275       1,079
                                                                ---------   ---------
             Total mortgage loans                                 61,042      45,684

Consumer loans                                                     2,711       2,245
Commercial loans                                                     674         618
                                                                ---------   ---------
             Total                                                64,427      48,547
Less:
    Unearned premiums, discounts, and deferred fees                  (44)         73
    Allowance for loan losses                                        256         241
    Undisbursed portion of loans in process                          214         482
                                                                ---------   ---------
             Total, net                                         $ 64,001      47,751
                                                                =========   =========
</TABLE>

        The Company evaluates each customer's creditworthiness on a case-by-case
        basis.  Residential  loans with a loan-to-value  ratio exceeding 80% are
        required to have  private  mortgage  insurance.  The  Company's  primary
        lending area is in the State of Kansas.

        The  weighted   average   annual   interest   rates  on  mortgage  loans
        approximated   7.48%  and  7.32%  at   December   31,   2000  and  1999,
        respectively.  Adjustable  rate  loans  have  interest  rate  adjustment
        limitations  and are generally  indexed to the national  average cost of
        funds.  Future market factors may affect the correlation of the interest
        rate  adjustment  with the  rates  the  Company  pays on the  short-term
        deposits that have been primarily utilized to fund these loans.

        At  December  31,  2000,  the  Company had  outstanding  commitments  to
        originate  mortgage loans of $11,000 and no  outstanding  commitments to
        purchase loans.

        Loans  made  to  directors  and   executive   officers  of  the  Company
        approximated  $752,000  and  $738,000  at  December  31,  2000 and 1999,
        respectively.  Such loans were made in the ordinary  course of business.
        Changes in such loans for 2000 are as follows (in thousands):

          Balance at January 1, 2000               $ 738
          Additions                                   85
          Amounts collected                          (71)
                                                   -----
          Balance at December 31, 2000             $ 752
                                                   =====

                                      F-14                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


        A summary of the activity in the allowance  for loan losses  follows (in
        thousands):

                                                 2000      1999
                                               --------  --------

          Balance at beginning of year         $    241       206
          Provision                                  36        36
          Charge-offs                               (27)       (1)
          Recoveries                                  6         -
                                               --------  --------
          Balance at end of year               $    256       241
                                               ========  ========

        Loans  delinquent  ninety  days or more at  December  31,  2000 and 1999
        aggregated $21,000 and $82,000, respectively.  Impaired loans, exclusive
        of delinquent loans, were insignificant at December 31, 2000 and 1999.

  (6)   Premises and Equipment

        Premises and equipment consist of the following (in thousands):

                                                  2000      1999
                                                ---------  --------

         Land                                   $    217       217
         Buildings and improvements                2,090     2,068
         Construction in progress                     24         -
         Furniture and equipment                   1,413     1,357
                                                ---------  --------
                      Total                        3,744     3,642

         Less accumulated depreciation             1,614     1,429
                                                ---------  --------
                      Total                     $  2,130     2,213
                                                =========  ========

  (7)   Real Estate Held for Development

        The  Company's  subsidiary  acquired  a parcel of land in 1996 in Paola,
        Kansas for the  purpose of  development  and sale.  Total cost  incurred
        through December 31, 2000,  including  capitalized  interest of $37,000,
        aggregated  $658,000.  There were no sales or transfers  associated with
        the parcel of land during 2000 or 1999.

  (8)   Premium on Deposits Assumed

        In accordance with the FSLIC Transfer Agreement dated November 19, 1982,
        the Company assumed certain  deposits of the former North Kansas Savings
        Company, paying a premium on deposits assumed of $1,212,000. The Company
        is amortizing the premium over twenty years on the straight-line method.
        Accumulated  amortization on such premium was $1,095,000 and $1,034,000,
        respectively, at December 31, 2000 and 1999.

                                      F-15                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

  (9)   Deposits

        Deposits are summarized as follows (in thousands):

                                                      2000        1999
                                                    ----------  ----------

      Noninterest bearing demand                    $   3,392       2,612
      Savings and interest-bearing demand              27,732      28,570
      Time                                             50,360      51,135
                                                    ----------  ----------
                                                    $  81,484      82,317
                                                    ==========  ==========

        The weighted average interest rates on deposits  approximated  4.94% and
        4.47% at December 31, 2000 and 1999, respectively.

        Scheduled  maturities  of time  deposits  at  December  31,  2000 are as
        follows (in thousands):

                           2001          $  34,380
                           2002              9,670
                           2003              4,490
                           2004                519
                           2005                837
                        Thereafter             464
                                         ----------
                          Total          $  50,360
                                         ==========

        A summary of interest expense is as follows (in thousands):

                                                       2000       1999
                                                      --------   --------

          Savings and time accounts                   $ 2,936      2,965
          Interest-bearing demand accounts                559        574
                                                      --------   --------
                                                      $ 3,495      3,539
                                                      ========   ========

        Certificates  of deposit in amounts  greater  than or equal to  $100,000
        amounted to  $2,683,000  and  $2,458,000  at December 31, 2000 and 1999,
        respectively.

                                      F-16                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

(10)    Borrowings From FHLB of Topeka

        Borrowings  outstanding from the FHLB of Topeka at December 31, 2000 and
        1999 are as follows (in thousands):
<TABLE>
<CAPTION>
                                                                           2000        1999
                                                                         ----------  ----------
<S>                                                                   <C>            <C>
Advance from FHLB of Topeka at 4.92% interest and
    maturity date in January 2009, callable January 2004                 $  10,000      10,000
Advance from FHLB of Topeka at 4.88% interest and
    maturity date in January 2009, callable January 2004                    10,000      10,000
Advance from FHLB of Topeka at 5.30% interest and
    maturity date in May 2009, callable April 2004                          10,000      10,000
Advance from FHLB of Topeka at 5.76% interest and
    maturity date in 2010, callable September 2001                          10,000           -
Advance from FHLB of Topeka at 5.92% interest and
    maturity date in 2010, callable September 2002                           5,000           -
Advance from FHLB of Topeka at 6.10% interest and
    maturity date in 2010, callable September 2003                           5,000           -
Advance from FHLB of Topeka with an adjustable rate
    based on one month LIBOR rate on two basis points
    (6.44% at December 31, 1999) and maturity date
    in September 2000                                                            -       8,000
Borrowings under $8 million FHLB of Topeka line of credit
    with an adjustable interest rate (5.0% at December 31,
    1999) and maturity date in May 2000                                          -       2,500
                                                                         ----------  ----------
                                                                         $  50,000      40,500
                                                                         ==========  ==========
</TABLE>

        FHLB  borrowings  are secured by all  unpledged  single and  multifamily
        first  mortgage  loans,   mortgage-backed   securities,   United  States
        government and agency  obligations,  interest-bearing  deposits in other
        financial  institutions,  stock in FHLB,  and FHLB  overnight  deposits.
        Weighted average interest rates at December 31, 2000 and 1999 were 5.37%
        and 5.03%, respectively, on such borrowings.

        Principal  maturities,  based on original  maturity,  of borrowings from
        FHLB of Topeka at December 31, 2000 are as follow (in thousands):

                           Year         Amount
                         ----------   -----------

                           2009       $   30,000
                           2010           20,000
                                      -----------
                                      $   50,000
                                      ===========

                                      F-17                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


(11)    Income Taxes

        The components of income tax expense from  operations are as follows for
        the years ended December 31 (in thousands):

                            2000                            1999
             ------------------------------   -------------------------------
              Federal      State    Total      Federal      State     Total
             -----------   -------  -------   -----------  --------  --------

Current           599         75       674        466          54        520
Deferred          (56)        (4)      (60)         2           -          2
             -----------   -------  -------   -----------  --------  --------
                  543         71       614        468          54        522
             ===========   =======  =======   ===========  ========  ========

        The reasons for the differences  between the effective tax rates and the
        expected federal income tax rate of 34% are as follows:

                                                 Percentage
                                                of earnings
                                                   before
                                                 income tax
                                                  expense
                                             -------------------
                                               2000       1999
                                             -------    --------

Expected federal income tax rate               34.0 %      34.0
State taxes, net of federal tax benefit         3.0         3.0
Other, net                                     (1.2)        0.9
                                             -------    --------
             Effective income tax rate         35.8 %      37.9
                                             =======    ========


                                      F-18                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

        Temporary  differences  that  give  rise  to a  significant  portion  of
        deferred tax assets and liabilities at December 31, 2000 and 1999 are as
        follows (in thousands):

                                                            2000      1999
                                                          --------  --------

Unrealized loss on available-for-sale securities          $   206       151
Loan origination fees                                           -         2
Employee benefits                                              69        29
Other, net                                                      4         4
Allowance for loan losses                                       3         -
                                                          --------  --------
             Deferred tax asset                               282       186
                                                          --------  --------
Premises and equipment                                       (119)     (104)
FHLB dividends                                               (162)     (162)
Allowance for loan losses                                       -       (30)
State taxes                                                   (17)      (21)
                                                          --------  --------
             Deferred tax liability                          (298)     (317)
                                                          --------  --------
             Net deferred tax liability, included
               in other liabilities                       $   (16)     (131)
                                                          ========  ========

        There was no  valuation  allowance  required  for deferred tax assets at
        December 31, 2000 or 1999.  Management  believes  that it is more likely
        than not the  results  of future  operations  will  generate  sufficient
        taxable income to realize the deferred tax assets.

        Prior to 1996,  the  Company  was  allowed to deduct  the  greater of an
        experience  method bad debt deduction  based on actual  charge-offs or a
        statutory  bad debt  deduction  based on a  percentage  (8%) of  taxable
        income before such deduction.  For income tax purposes, the Company used
        the  experience  methods in 1997 and 1998.  Under the Small Business Job
        Projection  Act (the Act) of 1996,  the  allowable  deduction  under the
        percentage  of  taxable  income  method  was  terminated  for tax  years
        beginning  after  1995,  and will not be  available  to the  Company for
        future years.  The Act also  provides  that federal  income tax bad debt
        reserves  accumulated  since  1988  (the  base  year  reserve)  must  be
        recaptured  and  included in taxable  income  over a six-year  inclusion
        period beginning 1998.  Included in the deferred income tax liability at
        December 31, 2000 and 1999 are $84,000 and $112,000,  respectively,  for
        this recapture.

        Retained  earnings at December 31, 2000 and 1999  include  approximately
        $718,000  for which no provision  for federal  income tax has been made.
        This amount  represents  allocations of income to bad debt deductions in
        years  prior  to 1988  for  tax  purposes  only.  Reduction  of  amounts
        allocated for purposes other than tax bad debt losses will create income
        for tax  purposes  only,  which  will be  subject  to the  then  current
        corporate income tax rate.

                                      F-19                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

(12)    Benefit Plans

        Pension and Retirement

        The Company  participates in a  multiemployer,  noncontributory  defined
        benefit pension plan which covers all employees who have met eligibility
        requirements. The multiemployer plan does not provide information at the
        single employer level and the Company does not make disclosures  similar
        to those of single  employer  plans.  Qualified  part-time and full-time
        employees over age twenty-one are eligible for  participation  after one
        year of service.  Pension  costs  associated  with the plan  amounted to
        $1,500  and  $3,000  for the years  ended  December  31,  2000 and 1999,
        respectively.

        The Company has a defined  contribution  plan that covers  substantially
        all  employees.  Employees  may  contribute  up to 15% of their  salary,
        subject to limitations  under the Internal Revenue Code, and the Company
        matches 50% of the employee's contribution up to 6% of compensation. The
        Company's  expense under the plan for the years ended  December 31, 2000
        and 1999 was $25,000 and $24,000, respectively.

        In December  1997,  the Company  implemented  a  supplemental  executive
        retirement  plan (SERP) for the benefit of the Company's  president that
        will provide  enhanced  benefits at retirement.  Accruals under the SERP
        commenced during 1998,  resulting in expenses of $42,000 and $37,000 for
        the years ended December 31, 2000 and 1999, respectively.

        Employee Stock Ownership Plan

        During 1998, the Company  established  an employee stock  ownership plan
        (ESOP).  Through  a loan from the  Company,  the ESOP  acquired  124,315
        shares of the Company's common stock.  Employees age twenty-one or older
        who have  completed one year of service with the Company are eligible to
        participate  in the ESOP.  Participants  become 100%  vested  after five
        years.  Contributions  made by the  Company  to the ESOP will be used to
        repay the loan,  and shares are allocated to  participants  by a formula
        based on total compensation. The cost of unallocated shares is presented
        as  unearned  compensation  in  the  accompanying  consolidated  balance
        sheets. The Company recognizes additional  compensation expense equal to
        the fair  value of shares  allocated.  In  connection  with a  principal
        reduction on the ESOP loan,  12,432 shares were released and the Company
        recognized  $149,000 of  compensation  expense  during 2000,  and 12,432
        shares were released and the Company recognized $132,000 of compensation
        expense during 1999. The fair value of the remaining 93,235  unallocated
        shares at December 31, 2000 aggregated approximately $1,165,000.

        Stock Option Plan and Restricted Stock Plan (RSP)

        In February 1999, the Company instituted an RSP and a stock option plan.
        Pursuant to the RSP, the Company purchased 62,158 shares of common stock
        during March 1999. The cost of such shares,  aggregating  $660,429,  has
        been recorded as unearned compensation in the accompanying  consolidated
        balance sheet.  During March 1999, the Company  awarded 52,826 shares of
        common stock to key officers and directors. The fair value of the shares
        ($561,276)  will be amortized to expense  over their  five-year  vesting
        period.  The Company  recognized  approximately  $112,000 and $94,000 of
        compensation  expense related to the  amortization of the shares awarded
        for the years ended December 31, 2000 and 1999, respectively.

                                      F-20                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

        Pursuant  to the stock  option  plan,  the  Company  granted  options to
        acquire  132,079  shares of common  stock to certain  key  officers  and
        directors  in February  1999.  The options  enable the  participants  to
        purchase  stock at an exercise  price equal to the fair market  value of
        the stock at the date of grant ($10.75 per share). The options vest over
        five  years and  expire in 2008.  During  2000 and 1999,  there  were no
        options which were exercised or forfeited.

        The Company applies Accounting  Principles Board (APB) No 25 and related
        interpretations in accounting for the stock option plan. Accordingly, no
        compensation   expense   has  been   recognized   in  the   accompanying
        consolidated  financial  statements.  SFAS No.  123  requires  pro forma
        disclosures  for  companies  that do not adopt its fair value  method of
        accounting  for  stock-based  employer  compensation.  Accordingly,  the
        following pro forma  information  presents net earnings and earnings per
        share information for 2000 and 1999 as if the fair value method required
        by SFAS No.  123 has been used to  measure  compensation  cost for stock
        options granted:

                                                      2000          1999
                                                  -------------  -----------

Net earnings - as reported                        $  1,102,000      855,000
                                                  =============  ===========
Net earnings - pro forma                          $  1,059,000      819,000
                                                  =============  ===========
Basic earnings per share - as reported            $       0.96         0.63
                                                  =============  ===========
Basic earnings per share - pro forma              $       0.92         0.60
                                                  =============  ===========

        The fair value of  options  granted in 1999 of  $326,000  was  estimated
        using the following  weighted average  information:  risk-free  interest
        rate of 6.5%, expected life of five years,  expected volatility of stock
        price of 16.6%, and expected dividends of 2.0% per year.

        At December 31, 2000, the exercise price and weighted average  remaining
        contractual  life of the  outstanding  options was $10.75 and 8.1 years,
        respectively.

        At December 31, 2000, the number of options  exercisable  was 26,408 and
        the weighted average exercise price of those options was $10.75.

(13)    Regulatory Capital Requirements

        The Financial  Institution Reform,  Recovery and Enforcement Act of 1989
        (FIRREA) and the capital regulations of the Office of Thrift Supervision
        (OTS)  promulgated  thereunder  require  institutions  to have a minimum
        regulatory  tangible capital equal to 1.5% of total assets, a minimum 4%
        leverage capital ratio, and a minimum 8% risk-based capital ratio. These
        capital standards set forth in the capital regulations must generally be
        no less  stringent  than the capital  standards  applicable  to national
        banks.  FIRREA also  specifies  the  required  ratio of  housing-related
        assets in order to qualify as a savings institution.


                                      F-21                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


        The  Federal  Deposit  Insurance  Corporation  Improvement  Act of  1991
        (FDICIA)  established   additional  capital  requirements  that  require
        regulatory  action  against  depository   institutions  in  one  of  the
        undercapitalized   categories   defined  in  implementing   regulations.
        Institutions such as the Company, which are defined as well-capitalized,
        must  generally  have a leverage  (core) capital ratio of at least 5%, a
        Tier 1 risk-based  capital ratio of at least 6%, and a total  risk-based
        capital  ratio of at least  10%.  FDICIA  also  provides  for  increased
        supervision  by  federal  regulatory   agencies,   increased   reporting
        requirements for insured depository  institutions,  and other changes in
        the legal and regulatory environment for such institutions.

        The Bank met all regulatory  capital  requirements  at December 31, 2000
        and 1999. The Bank's actual and required  capital  amounts and ratios as
        of December 31, 2000 and 1999 were as follows (dollars in thousands):
<TABLE>
<CAPTION>
                                                          2000
--------------------------------------------------------------------------------------------------------------------------
                                                                                                      To be well-
                                                                                                      capitalized
                                                                                                     under prompt
                                                                         For capital                  corrective
                                                                          adequacy                      actions
                                              Actual                      purposes                    provisions
                                      -----------------------       ----------------------       ----------------------
                                        Amount       Ratio            Amount      Ratio            Amount       Ratio
                                      ------------  ---------       -----------  ---------       -----------   --------
<S>                               <C>               <C>         <C>              <C>         <C>              <C>
Tangible capital
    (to tangible assets)              $ 15,045         10.04 %      $ 2,249          1.50 %      $     -             - %
Tier 1 leverage (core) capital
    (to adjusted tangible assets)       15,045         10.04          5,997          4.00          7,496          5.00
Risk-based capital
    (to risk-weighted assets)           15,296         31.04          3,943          8.00          4,929         10.00
Tier 1 risk-based capital
    (to risk-weighted assets)           15,045         30.53              -             -          2,957          6.00
                                      ============  =========       ===========  =========       ===========   ========
</TABLE>

<TABLE>
<CAPTION>
                                                          1999
--------------------------------------------------------------------------------------------------------------------------
                                                                                                      To be well-
                                                                                                      capitalized
                                                                                                     under prompt
                                                                         For capital                  corrective
                                                                          adequacy                      actions
                                              Actual                      purposes                    provisions
                                      -----------------------       ----------------------       ----------------------
                                        Amount       Ratio            Amount      Ratio            Amount       Ratio
                                      ------------  ---------       -----------  ---------       -----------   --------
<S>                                 <C>              <C>         <C>              <C>         <C>              <C>
Tangible capital
    (to tangible assets)              $ 13,668          9.61 %      $ 2,134          1.50 %      $     -             - %
Tier 1 leverage (core) capital
    (to adjusted tangible assets)       13,668          9.61          5,692          4.00          7,114          5.00
Risk-based capital
    (to risk-weighted assets)           13,898         33.21          3,348          8.00          4,184         10.00
Tier 1 risk-based capital
    (to risk-weighted assets)           13,668         32.61              -             -          2,511          6.00
                                      ============  =========       ===========  =========       ===========   ========
</TABLE>

                                      F-22                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


        At the time of conversion, the Bank established a liquidation account in
        an  amount  equal  to  $7,038,000.   The  liquidation  account  will  be
        maintained for the benefit of eligible  account  holders who continue to
        maintain  their deposit  accounts in the Bank after  conversion.  In the
        event of a complete  liquidation of the Bank, and only in such an event,
        eligible  depositors who continue to maintain accounts shall be entitled
        to  receive a  distribution  from the  liquidation  account  before  any
        liquidation  may be made with respect to common stock.  The Bank may not
        declare or pay a cash dividend if the effect thereof would cause its net
        worth to be reduced below either the amount required for the liquidation
        account discussed below, or the regulatory capital  requirements imposed
        by the OTS.

(14)    Financial  Instruments  With Off-Balance  Sheet Risk and  Concentrations
        of Credit Risk

        The Company is a party to financial  instruments with off-balance  sheet
        risk in the normal course of business to meet customer  financing needs.
        These financial instruments consist principally of commitments to extend
        credit.  The Company uses the same credit policies in making commitments
        and conditional obligations as it does for on-balance sheet instruments.
        The Company's  exposure to credit loss in the event of nonperformance by
        the  other  party is  represented  by the  contractual  amount  of those
        instruments.  The Company does not generally require collateral or other
        security on  unfunded  loan  commitments  until such time that loans are
        funded.

        In addition to financial  instruments with  off-balance  sheet risk, the
        Company is exposed to varying risks  associated with  concentrations  of
        credit relating primarily to lending  activities in specific  geographic
        areas.  The  Company's  primary  lending  area  consists of the State of
        Kansas, and substantially all of the Company's loans are to residents of
        or  secured  by  properties  located  in  its  principal  lending  area.
        Accordingly, the ultimate collectibility of the Company's loan portfolio
        is  dependent  upon  market  conditions  in that area.  This  geographic
        concentration  is  considered  in  management's   establishment  of  the
        allowance for loan losses.

        The Company grants  mortgage and consumer  loans to customers  primarily
        throughout  its  target  market of the  State of  Kansas.  Although  the
        Company has a diversified loan portfolio,  a substantial  portion of the
        borrower's  ability  to honor  their  contracts  is  dependent  upon the
        general economic condition of the target market.

 (15)   Fair Value of Financial Instruments

        SFAS No. 107, Disclosures About Fair Value of Financial Instruments, and
        SFAS No. 119, Disclosure About Derivative Financial Instruments and Fair
        Value  of  Financial  Instruments,  require  that the  Company  disclose
        estimated  fair values for its  financial  instruments,  both assets and
        liabilities  recognized and not recognized in the consolidated financial
        statements.  Fair value estimates have been made as of December 31, 2000
        and 1999 based on current economic  conditions,  risk characteristics of
        the various financial instruments,  and other subjective factors at such
        date.

        The  following  methods and  assumptions  were used to estimate the fair
        value of each class of financial  instrument for which it is practicable
        to estimate that value.

                                      F-23                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999



        Cash and Cash Equivalents

        The  carrying  amounts  approximate  fair  value  because  of the  short
        maturity of these instruments.

        Investment and Mortgage-Backed Securities

        The  fair  values  of  investment  securities  are  estimated  based  on
        published bid prices or bid quotations received from securities dealers.

        Loans Receivable

        The fair values of loans receivable are estimated using the option-based
        approach.  Cash flows  consist of  scheduled  principal,  interest,  and
        prepaid principal.  Loans with similar  characteristics  were aggregated
        for purposes of these calculations.

        Stock of FHLB

        The  carrying  amount of such stock is  estimated  to  approximate  fair
        value.

        Accrued Interest

        The  carrying  amount of accrued  interest is assumed to be its carrying
        value because of the short-term nature of these items.

        Deposits

        The fair values of  deposits  with no stated  maturity  are deemed to be
        equivalent to amounts payable on demand. The fair values of certificates
        of  deposit  are  estimated  based on the  static  discounted  cash flow
        approach using rates currently offered for deposits of similar remaining
        maturities.

        Borrowings From FHLB of Topeka

        The fair  values of FHLB  advances  are  estimated  based on  discounted
        values of contractual cash flows using the rates currently  available to
        the Company on advances of similar remaining maturities.


                                      F-24                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

        The approximate carrying value and estimated fair value of the Company's
        financial instruments are as follows (in thousands):

                                                        December 31, 2000
                                                     -------------------------
                                                      Carrying         Fair
                                                        value         value
                                                     ------------    ---------
Financial assets:
    Cash and cash equivalents                      $       5,723        5,723
    Investment securities (see note 3)                     6,322        6,194
    Mortgage-backed securities (see note 4)               67,802       66,948
    Loans receivable                                      64,001       63,701
    Stock in FHLB                                          2,650        2,650
    Accrued interest receivable                              772          772

Financial liabilities:
    Deposits                                              81,484       81,503
    FHLB borrowings                                       50,000       49,695
    Accrued interest payable                                 315          315
                                                     ============    =========

                                                        December 31, 1999
                                                     -------------------------
                                                      Carrying         Fair
                                                        value         value
                                                     ------------    ---------
Financial assets:
    Cash and cash equivalents                        $     4,090        4,090
    Investment securities (see note 3)                     6,261        5,963
    Mortgage-backed securities (see note 4)               78,760       76,392
    Loans receivable                                      47,751       46,253
    Stock in FHLB                                          2,114        2,114
    Accrued interest receivable                              736          736

Financial liabilities:
    Deposits                                              82,317       82,317
    FHLB borrowings                                       40,500       38,286
    Accrued interest payable                                 234          234
                                                     ============    =========


                                      F-25                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999

        Limitations

        Fair  value  estimates  are made at a specific  point in time,  based on
        relevant  market   information  and  information   about  the  financial
        instruments. These estimates do not reflect any premium or discount that
        could  result from  offering for sale at one time the  Company's  entire
        holdings of a particular financial instrument.  Fair value estimates are
        based on judgments  regarding future loss  experience,  current economic
        conditions,  risk characteristics of various financial instruments,  and
        other  factors.  These  estimates  are  subjective in nature and involve
        uncertainties  and matters of significant  judgment and therefore cannot
        be determined with precision. Changes in assumptions could significantly
        affect the estimates. Fair value estimates are based on existing balance
        sheet financial  instruments without attempting to estimate the value of
        anticipated future business and the value of assets and liabilities that
        are not considered financial instruments.

(16)    Parent Company Condensed Financial Statements

                            Condensed Balance Sheets
                           December 31, 2000 and 1999
                                 (In thousands)
<TABLE>
<CAPTION>
                            Assets                                  2000         1999
                                                                  ----------  -----------
<S>                                                             <C>           <C>
Cash and cash equivalents                                         $     120           95
Loan to ESOP                                                            932        1,057
Investment in and loan to subsidiary                                 16,519       17,709
Other assets                                                             51           18
                                                                  ----------  -----------

             Total assets                                         $  17,622       18,879
                                                                  ==========  ===========
             Liabilities and Stockholders' Equity

Accrued interest payable and other liabilities                    $       5            6
Stockholders' equity                                                 17,617       18,873
                                                                  ----------  -----------

             Total liabilities and stockholders' equity           $  17,622       18,879
                                                                  ==========  ===========
</TABLE>

                         Condensed Statements of Income
                     Years ended December 31, 2000 and 1999
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                    2000         1999
                                                                  ----------  -----------
<S>                                                              <C>             <C>
Income:
    Equity in earnings of subsidiary                              $   1,053          770
    Interest on loans                                                   172          261
    Interest on investments                                               2            -
                                                                  ----------  -----------
             Total income                                             1,227        1,031

Expense, including income tax expense                                   125          176
                                                                  ----------  -----------
             Net income                                           $   1,102          855
                                                                  ==========  ===========
</TABLE>


                                      F-26                           (Continued)
<PAGE>
                FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
                               OSAWATOMIE, KANSAS

                   Notes to Consolidated Financial Statements

                           December 31, 2000 and 1999


                       Condensed Statements of Cash Flows
                     Years ended December 31, 2000 and 1999
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                    2000         1999
                                                                  ----------  -----------
<S>                                                             <C>           <C>
Operating activities:
    Net income                                                    $   1,102          855
    Less equity in earnings of subsidiary                            (1,053)        (770)
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Release of unallocated ESOP shares and
           amortization of RSP                                          261          226
        Decrease in payables                                             (1)         (45)
        Change in other assets                                          (33)         (31)
                                                                  ----------  -----------
             Net cash provided by operating activities                  276          235
                                                                  ----------  -----------
Investing activities:
    Decrease in investment in and loan to subsidiary, net             2,139        2,833
    Decrease in loan to ESOP                                            125          124
                                                                  ----------  -----------
             Net cash provided by investing activities                2,264        2,957
                                                                  ----------  -----------
Financing activities:
    Purchases of common stock for the treasury                       (2,263)      (2,495)
    Purchases of common stock for RSP                                     -         (660)
    Cash dividends paid on common stock                                (252)        (221)
                                                                  ----------  -----------
             Net cash used by financing activities                   (2,515)      (3,376)
                                                                  ----------  -----------
             Increase (decrease) in cash and cash
               equivalents                                               25         (184)

Cash and cash equivalents at beginning of year                           95          279
                                                                  ----------  -----------
Cash and cash equivalents at end of year                          $     120           95
                                                                  ==========  ===========
</TABLE>


        The  Company's  ability  to pay  dividends  to  stockholders  is largely
        dependent upon the dividends it receives from the Bank. The Bank may not
        declare or pay a cash dividend on any of its stock if the effect thereof
        would cause the Bank's  regulatory  capital to be reduced  below (1) the
        amount  required for the liquidation  account  established in connection
        with the conversion,  or (2) the regulatory  requirements imposed by the
        OTS.




                                      F-27




<PAGE>

Corporate Information

                       First Kansas Financial Corporation
                                 600 Main Street
                            Osawatomie, Kansas 66064
                                 (913) 755-3033

                        First Kansas Federal Savings Bank


       Main Office                                    Paola Office
     600 Main Street                               1310 Baptiste Drive
   Osawatomie, Kansas                                 Paola, Kansas

    Fort Scott Office                               Louisburg Office
     2205 South Main                                 100 West Amity
   Fort Scott, Kansas                               Louisburg, Kansas

      Beloit Office                                Phillipsburg Office
     125 North Mill                                  762 4th Street
     Beloit, Kansas                               Phillipsburg, Kansas


                               Board of Directors
   Roger L. Coltrin                                   Larry V. Bailey
Chairman of the Board                      President and Chief Executive Officer

   Donald V. Meyer                                 James E. Breckenridge
       Director                                          Director

   Sherman W. Cole                                   J. Darcy Domoney
       Director                                          Director

                               Executive Officers
                                 Larry V. Bailey
                      President and Chief Executive Officer

                                Daniel G. Droste
                       Senior Vice President and Treasurer

                                 Galen E. Graham
                       Senior Vice President and Secretary


                 -----------------------------------------------

Local Counsel                                       Independent Auditor
Winkler, Domoney & Schultz                          KPMG LLP
131 South Pearl Street                              1600 Commerce Bank Building
Paola, Kansas  66071                                Kansas City, Missouri  64106

Special Counsel                                     Transfer Agent and Registrar
Malizia Spidi & Fisch, PC                           ComputerShare, Inc.
1100 New York Avenue, N.W.                          12039 West Alameda Parkway
Suite 340 West                                      Suite Z-2
Washington, D.C. 20005                              Lakewood, Colorado  80228

                 -----------------------------------------------

         The  Company's  Annual  Report on Form 10-KSB for the fiscal year ended
December 31, 2000 is available  without charge upon written request.  For a copy
of the Form 10-KSB,  please write or call the Company's  Corporate  Secretary at
the Company's main office.  The Annual Meeting of  Stockholders  will be held on
April 17, 2001 at 1:00 p.m. at the Company's office.