ANNUAL REPORT TO STOCKHOLDERS




<PAGE>





                                TABLE OF CONTENTS

                                                                Page

    Letter to Stockholders                                       1
    Business of the Corporation                                  2
    Selected Consolidated Financial Information                  3
    Management's Discussion and Analysis of Financial
       Condition and Results of Operations                       5
    Independent Auditor's Report                                 16
    Consolidated Financial Statements                            17
    Notes to Consolidated Financial Statements                   22
    Common Stock Information                                     46
    Directors and Officers                                       47
    Corporate Information                                        48









<PAGE>



[NS&L BANCORP, INC. LETTERHEAD]




President's Message
To Our Stockholders:

On behalf of our Board of  Directors,  Officers and  Employees of NS&L  Bancorp,
Inc. and its wholly owned subsidiary,  Neosho Savings & Loan Association,  F.A.,
we are pleased to submit our sixth Annual Report as a public company.

During the fiscal year ending September 30, 2000 the Company's stock traded in a
range from $9.875 to $11.75 per share closing out the year at $10.375 per share.
To  date,  and in  accordance  with  the  Company's  repurchase  plan,  we  have
repurchased a total of 354,743 shares.  The total  outstanding  shares as of the
close of business  December 1, 2000 were 661,882.  Our return on average  assets
(ROA) was .67% and our  return  on  average  equity  (ROE)  was  4.66%.  Diluted
earnings  per  share  were $ .74.  The  Company  posted a 5.17%  growth in total
assets, and the net loans receivable increased $4.3 million to $44,477,000.

We continue to remain  firm in our pledge to be a community  oriented  financial
institution  providing  affordable up to date financial services and products to
our present and future  customers.  THANK YOU for taking stock in our future, we
look forward to a long lasting and profitable relationship.

Sincerely,




/s/ C.R. `Rick' Butler
----------------------
C.R. `RICK' BUTLER
President


                                       1

<PAGE>


Business of the Corporation

         NS&L  Bancorp,  Inc.  (the  "Company"),  a  Missouri  corporation,  was
organized in February  1995 for the purpose of becoming the holding  company for
Neosho  Savings  and  Loan  Association,   F.A.  (the  "Association")  upon  the
conversion of the  Association  from a federal mutual to a federal stock savings
and loan association. That conversion was completed in June 1995.

         The Company is not engaged in any significant  business  activity other
than holding the stock of Neosho Savings and Loan Association, F.A. Accordingly,
the  information  set forth in the report,  including  financial  statements and
related data, applies primarily to the Association.

         The  Association  is  a  federally-chartered,  federally-insured  stock
savings and loan association  organized in 1884. The Association is regulated by
the  Office of Thrift  Supervision  ("OTS").  Its  deposits  are  insured  up to
applicable  limits by the  Savings  Association  Insurance  Fund of the  Federal
Deposit Insurance Corporation ("FDIC").  The Association also is a member of the
Federal Home Loan Bank ("FHLB") System.

         The Association's  principal  business consists of attracting  deposits
from the general  public through a variety of deposit  programs and  originating
loans secured  primarily by  one-to-four  family  residential  properties.  To a
significantly  lesser  extent,  the  Association  originates  loans  secured  by
commercial real estate,  residential  construction loans and consumer loans. The
Association  also  invests  in  mortgage-backed,   U.S.  Government  and  agency
securities and other assets.



                                       2


<PAGE>

SELECTED CONSOLIDATED FINANCIAL INFORMATION

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

<TABLE>
<CAPTION>
                                                                     At September 30,
                                              -------------------------------------------------------------------
                                              1996           1997         1998           1999            2000
                                              ----           ----         ----           ----            ----
                                                                       (In Thousands)
FINANCIAL CONDITION DATA:
<S>                                         <C>            <C>            <C>            <C>            <C>
Total assets                                $61,807        $59,817        $63,367        $69,228        $72,809
Loans receivable, net.(1)                    31,051         33,878         37,506         40,170         44,477
Mortgage-backed securities                    5,342          4,473          3,121          2,484          2,907
Cash, interest bearing deposits
 and investment securities                   23,930         19,638         21,028         24,557         23,531
Customer deposits                            48,444         43,892         47,944         51,547         48,256
Advances from Federal Home Loan Bank             --          3,000          3,986          5,856         13,117
Stockholders' equity                         12,179         11,824         10,405         10,656         10,124
</TABLE>


<TABLE>
<CAPTION>
                                                            For the Years Ended September 30,
                                              --------------------------------------------------------------
                                                  1996        1997        1998         1999        2000
                                                  ----        ----        ----         ----        ----
                                                          (In Thousands, except per share data)
<S>                                          <C>           <C>           <C>           <C>           <C>
OPERATING DATA:

Interest income                              $3,703        $3,906        $4,053        $4,361        $4,895
Interest expense                              1,873         2,065         2,150         2,342         2,763
                                             ------        ------        ------        ------        ------

Net interest income                           1,830         1,841         1,903         2,019         2,132
Provision for loan losses                         3             2             8            12            13
                                             ------        ------        ------        ------        ------


Net interest income after
 provision for loan losses                    1,827         1,839         1,895         2,007         2,119
Noninterest income                              265           235           424           451           434
Noninterest expense                           1,613         1,372          1601          1703          1815
                                             ------        ------        ------        ------        ------


Income before  taxes                            479           702           718           755           738
Income taxes                                    152           246           264           247           256
                                             ------        ------        ------        ------        ------


Net income                                   $  327        $  456        $  454        $  508        $  482
                                             ==============================================================
Basic earnings per share.(2)                 $  .35        $  .57        $  .66        $  .74        $  .74
                                             ==============================================================
Diluted earnings per share.(2)               $  .35        $  .56        $  .64        $  .73        $  .74
                                             ==============================================================
Dividends per share .(2)                     $  .40        $  .42        $  .42        $  .59        $  .64
                                             ==============================================================
</TABLE>

                                        3

<PAGE>

<TABLE>
<CAPTION>
                                                        At September 30,
                                  -------------------------------------------------------------
                                     1996         1997        1998         1999         2000
                                     ----         ----        ----         ----         ----
OTHER DATA:
<S>                                 <C>          <C>          <C>          <C>          <C>
Number of:
Real estate loans outstanding         911          948          956          987          968
Deposit accounts ............       8,830        8,960        9,394        9,594        9,576
Full service offices ........           2            2            2            2            2
</TABLE>

<TABLE>
<CAPTION>
                                                              At or For the Years Ended September 30,
                                               --------------------------------------------------------------------
                                                   1996        1997          1998          1999             2000
                                                   ----        ----          ----          ----             ----
<S>                                            <C>             <C>            <C>            <C>            <C>
KEY OPERATING RATIOS:
Return on average assets (net income
 divided by average assets) ........              .57%           .78%           .75%           .76%           .67%
Return on average equity (net income
 divided by average equity) ........             2.43           3.83           4.01           4.82           4.66
Average equity to average assets ...            23.34          20.27          18.71          15.86          14.47
Interest rate spread (difference
 between average yield on interest-
 earning assets and average cost of
 interest-bearing liabilities) .....             2.23           2.31           2.38           2.41           2.35
Net interest margin (net interest
 income as a percentage of average
interest-earning assets) ...........             3.26           3.22           3.23           3.12           3.07
Noninterest expense to average
 assets ............................             2.80           2.34           2.64           2.56           2.54
Average interest-earning assets
 to interest-bearing liabilities ...              131            125            123            120            118
Allowance for loan losses to total
 loans at end of period ............              .13            .13            .14            .14            .14
Net charge-offs to average
 outstanding loans during the period               --             --             --             --            .03
Ratio of non-performing assets to
 total assets ......................              .04            .03            .09            .09            .07
Dividend payout ratio.(3) ..........           114.29          73.68          63.64          79.73          86.49
</TABLE>

----------------------------------------------
(1) Includes loans held for sale.
(2) Per share information for periods prior to 1999 has been adjusted to reflect
    the 20% stock dividend paid in April 1999.
(3) Dividends paid divided by basic earnings per share.



                                       4

<PAGE>


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

General

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

Operating Strategy

         The  primary  goal  of  management  is to  increase  the  Association's
profitability  and  enhance  its net worth while  minimizing  risk.  Operational
results are dependent primarily on net interest income,  which is the difference
between  the income  earned on its  interest-earning  assets,  such as loans and
investments,  and the cost of its  interest-bearing  liabilities,  consisting of
deposits.  Operational  results  are  also  significantly  affected  by  general
economic conditions,  changes in market interest rates, governmental legislation
and  policies  concerning  monetary and fiscal  affairs and housing,  as well as
financial institutions and the attendant actions of the regulatory authorities.

         Management  strives  to  operate  a  conservative,   well  capitalized,
profitable  thrift  dedicated to financing  home  ownership  and other  consumer
needs, and to provide quality service to its customers. The Association believes
it has successfully implemented this strategy by:

         Emphasizing One-to-Four Family Lending.  Historically,  the Association
has been predominantly a one-to-four family  residential  lender.  Single family
residential loans constituted 92.5%, 88.8% and 93.3% of total loans at September
30, 1998, 1999 and 2000, respectively.

         Maintaining  Asset  Quality.   The  Association   strongly   emphasizes
maintaining asset quality through sound  underwriting,  constant  monitoring and
effective  collection  techniques.  As of September 30, 2000, the  Association's
ratio of  non-performing  assets to total  assets  was .07%;  the same  ratio at
September  30,  1999  was  .09%.  There  was  $13,000  in  loan  losses,  net of
recoveries,  for the year ended September 30, 2000 and $1,000 in loan losses for
1999.

         Managing  Interest-Rate  Risk.  In order to  reduce  the  impact on the
Association's  net  interest  income  due to  changes  in  interest  rates,  the
Association's  management  has  adopted a  strategy  that has been  designed  to
maintain  the  interest  rate  sensitivity  of its assets and  liabilities.  The
primary  elements of this strategy  involve  emphasizing  the origination of ARM
loans  and  maintaining  a  short-  and  medium-term  investment  portfolio.  At
September 30, 2000,  76.1% of the  Association's  loan portfolio was composed of
adjustable-rate loans.

         Maintaining  a High Level of  Liquidity.  At September  30,  2000,  the
liquidity ratio of the Association was 40.8%.  The Association  maintains a high
level of  liquidity  so that it will be able to fund  loans  during  periods  of
deposit  outflow.  In  determining  the  terms  of  its  deposit  accounts,  the
Association does not always match  above-market rates offered by competitors who
are  attempting  to increase  market  share.  The  Association  will permit some
deposit  outflow  rather than  increase its rate paid on deposits and reduce its
interest rate spread.

                                       5

<PAGE>


Results of Operations
---------------------

         The earnings of the  Association  depend  primarily on its level of net
interest   income,   which  is  the  difference   between   interest  earned  on
interest-earning  assets and the interest paid on interest-bearing  liabilities.
Net interest  income is a function of the  Association's  interest  rate spread,
which is the difference between the yield earned on interest-earning  assets and
the rate paid on  interest-bearing  liabilities,  as well as a  function  of the
average balance of interest-earning assets as compared to the average balance of
interest-bearing liabilities.

Comparison of Operating Results for the Years Ended September 30, 1999 and 2000

         General.  Net income decreased  $26,000,  or 5.1% from $508,000 for the
year ended September 30, 1999 to $482,000 for the year ended September 30, 2000.
Earnings per share remained stable at $.74 (diluted) compared to $.73 (diluted).
Interest income increased  $534,000,  which was partly offset, by an increase in
interest  expense  of  $422,000.   Noninterest   income  decreased  $17,000  and
noninterest  expense  increased  $112,000.  Income taxes increased  $9,000.  The
Association's net interest margin decreased from 3.12% for the fiscal year ended
September 30, 1999 to 3.07% for the fiscal year ended September 30, 2000.

         Net Interest Income. Net interest income increased  $112,000,  or 5.5%,
from  $2,019,000 for the fiscal year ended  September 30, 1999 to $2,131,000 for
the fiscal year ended  September 30, 2000.  Net interest  income  increased as a
result of an increase in interest  income of $534,000 that was partially  offset
by an increase in interest expense of $422,000.

         Interest Income.  Total interest income increased  $534,000,  or 12.2%,
from $4,361,000 for the year ended September 30, 1999 to $4,895,000 for the year
ended  September  30,  2000.  Interest  income from loans  receivable  increased
$387,000  primarily  as a result of an increase in the average  balance of loans
receivable of $3,981,000  from  $38,775,000 in 1999 to $42,756,000 in 2000. Loan
balances increased as a result of a more aggressive approach to solicitation and
pricing of  mortgage  loans.  Income from  investment  securities  increased  by
$356,000 due to an increase in the average balance of those securities. Interest
income  from  mortgage-backed  securities  decreased  by $31,000 as the  average
balance of  mortgage-backed  securities  decreased  from  $2,978,000  in 1999 to
$2,630,000 in 2000.  Balances in  mortgage-backed  securities  decreased as more
emphasis was placed on originating  mortgage loans. The average balance of other
interest earning assets decreased $3,688, 000 from $7,495,000 for the year ended
September 30, 1999 to  $3,807,000  for the year ended  September 30, 2000.  This
resulted in a decrease in earnings on other interest  earning assets of $178,000
from  $287,000  for the year ended  September  30, 1999 to $109,000 for the year
ended September 30, 2000.

         Interest  Expense.  Interest  expense on  customer  deposits  increased
$32,000,  or 1.5%,  from  $2,111,000  for the year ended  September  30, 1999 to
$2,143,000  for the year ended  September  30, 2000.  The increase was due to an
increase  in interest  rates paid on  deposits  due to an increase in the market
interest  rates.  Interest on advances from Federal Home Loan Bank of Des Moines
increased $391,000 from $230,000 for the year ending September 30, 1999 compared
to $621,000  for the year ending  September  30,  2000.  The  increase  resulted
primarily from an increase in the average balance of advances of $6,049,000 from
$4,166,000  in 1999 to  $10,215,000  in 2000 and to a lesser  extent  on  rising
interest rates.

         Provision  for Loan  Losses.  Provision  for loan losses are charged to
earnings to bring the total  allowance for loan losses to a level  considered by
management  to  adequately  provide

                                       6

<PAGE>

for estimated losses based on past loss experience,  known and inherent risks in
the portfolio,  adverse  situations  that may affect the  borrower's  ability to
repay,  the  estimated  value of  underlying  collateral,  and current  economic
conditions.  The  provision  for loan  losses  was  $13,000  for the year  ended
September 30, 2000.  This is an increase of $1,000 from the year ended September
30, 1999.  There was $13,000 in actual loan losses,  net of recoveries,  for the
fiscal  year ended  September  30,  2000 and $1,000 in actual loan losses in the
fiscal year ended 1999.

         Noninterest Income.  Noninterest income decreased $17,000, or 3.8% from
$451,000 for the fiscal year ended  September  30, 1999 to $434,000 for the year
ended  September 30, 2000.  The decrease  resulted  primarily from a decrease in
mortgage  banking  fees and a decrease  in the gain on the sale of loans and was
partially offset by an increase in banking service charges and fees.

         Noninterest  Expense.  Noninterest expense increased $112,000,  or 6.6%
from  $1,703,000 for the fiscal year ended  September 30, 1999 to $1,815,000 for
the year ended September 30, 2000.  Compensation  expense and employee  benefits
increased $110,000 as a result of additional  personnel as well as annual salary
increases.  Data  processing  fees  increased  $11,000 or 9.2% from  $120,000 at
September  30,  1999 to  $131,000 at  September  30,  2000 while other  expenses
increased  $11,000 as a result of normal  operations  of the Company.  Partially
offsetting the increases in noninterest  expense were deposit insurance premiums
that decreased  $14,000,  or 48.3% from $29,000 at September 30, 1999 to $15,000
at September 30, 2000,and  occupancy and equipment  expense decreased $8,000, or
4.1% from $194,000 at September 30, 1999 to $186,000 at September 30, 2000.

         Income Taxes.  Provision for income tax expense  increased  $9,000,  or
3.6% from $247,000 for the fiscal year ended  September 30, 1999 to $256,000 for
the year ended September 30, 2000 as a result of higher taxable income.

Comparison of Operating Results for the Years Ended September 30, 1998 and 1999

         General.  Net income increased $54,000,  or 11.9% from $454,000 for the
year ended September 30, 1998 to $508,000 for the year ended September 30, 1999.
Earnings per share rose to $.73 (diluted) from $.64  (diluted).  Interest income
increased $308,000,  which was partly offset, by an increase in interest expense
of $191,000.  Noninterest  income  increased  $27,000,  which was offset,  by an
increase in non interest expense of $102,000. Income taxes decreased $17,000 and
compensation  and  employee  benefits  increased  $62,000  as a result of annual
salary increases and additional personnel. The Association's net interest margin
decreased from 3.23% for the year ended September 30, 1998 to 3.12% for the year
ended September 30, 1999.

         Net Interest Income. Net interest income increased  $116,000,  or 6.14%
from $1,903,000 for the year ended September 30, 1998 to $2,019,000 for the year
ended  September 30, 1999. The increase in net interest  income resulted from an
increase in interest income of $308,000 and was partially  offset by an increase
in interest expense of $192,000.

         Interest Income.  Total interest income increased by $308,000,  or 7.6%
from $4,053,000 for the year ended September 30, 1998 to $4,361,000 for the year
ended  September  30,  1999.  Interest  income from loans  receivable  increased
$204,000  primarily  as a result of an increase in the average  balance of loans
receivable of $2,618,000  from  $36,157,000 in 1998 to $38,775,000 in 1999. Loan
balances increased as a result of a more aggressive approach to solicitation and
pricing of  mortgage  loans.  Income from  investment  securities  increased  by

                                       7

<PAGE>

$264,000 due to an increase in the average balance of those securities. Interest
income  from  mortgage-backed  securities  decreased  by $75,000 as the  average
balance of  mortgage-backed  securities  decreased  from  $3,742,000  in 1998 to
$2,978,000 in 1999. Balances of mortgage-backed securities and other investments
decreased as more emphasis was placed on originating mortgage loans. Income from
other interest-bearing assets decreased $85,000 from $372,000 for the year ended
September 30, 1998 to $287,000 for the year ended September 30, 1999.

         Interest expense.  Interest expense on customer  deposits  increased by
$54,000,  or 2.6% from  $2,057,000  for the year  ended  September  30,  1998 to
$2,111,000  for the year ended  September 30, 1999.  This increase was due to an
increase of $3,736,000 in the average balance of interest  bearing deposits from
$46,118,000  for the year ended  September 30, 1998 to $49,854,000  for the year
ended  September  30, 1999.  Interest on advances from Federal Home Loan Bank of
Des Moines  increased  $136,000,  from $94,000 for the year ended  September 30,
1998 compared to $230,000 for the year ended  September  30, 1999.  The increase
resulted from an increase in the average  balance of advances of $2,585,000 from
$1,581,000 in 1998 to $4,166,000 in 1999.

         Provision  for Loan Losses.  The  provision for loan losses was $12,000
for the year ended  September  30, 1999.  This is an increase of $4,000 over the
year  ended  September  30,  1998.  There  were  $1,000 in loan  losses,  net of
recoveries,  for the fiscal  years ended  September  30, 1999 and no actual loan
losses in the fiscal year ended September 30, 1998.

         Noninterest  Income.  Noninterest income increased by $27,000, or 6.4%,
from $424,000 for the year ended  September 30, 1998 for the year ended $451,000
at September 30, 1999.  The increase  resulted  primarily  from banking  service
charges and fees and was partially offset by a reduction in gains on the sale of
investments of $18,000.

         Noninterest  Expense.  Noninterest expense increased $102,000,  or 6.4%
from $1,601,000 for the year ended September 30, 1998 to $1,703,000 for the year
ended September 30, 1999.  Compensation and employee benefits increased $62,000,
as a result of additional personnel as well as annual salary increases. The ESOP
expense was $122,000 for the year ended  September  30, 1998 compared to $84,000
for the year ended September 30, 1999. In addition, the MRDP expense was $74,000
for the year ended  September 30, 1998 and $79,000 for the year ended  September
30,1999.  Data  processing  expenses  increased  $18,000 and printing,  postage,
stationery and supplies expense  increased  $14,000 between the two periods as a
result of normal operations of the Company.

         Income Taxes.  Provision for income tax expense decreased  $17,000,  or
6.4%  from  $264,000  at  September  30,  1998 to  $247,000  for the year  ended
September 30, 1999 as a result of lower taxable income.

Financial Condition
-------------------
         General.  During the year ended  September  30, 2000,  the  Association
concentrated on its principal  business of attracting  deposits from the general
public  through a variety of deposit  programs  and  originating  loans  secured
primarily by owner-occupied residential properties.

         Deposits are attracted  from within the  Association's  primary  market
area through the offering of a broad selection of deposit instruments, including
negotiable order of withdrawals ("NOW") accounts, money market deposit accounts,
regular savings accounts,  certificates of

                                       8

<PAGE>

deposit and retirement savings plans.  Deposit account terms vary,  according to
the minimum balance required,  the time periods the funds must remain on deposit
and the interest rate, among other factors.

         The principal lending activity of the Association is the origination of
conventional  mortgage  loans  and  loans  available  for sale on the  secondary
market.  The  Association has emphasized the origination of ARM loan products in
order to increase the interest rate sensitivity of its loan portfolio.

         Total  Assets.  Total  assets  increased  by  $3,581,000,  or 5.2% from
$69,228,000  at September 30, 1999 to  $72,809,000  at September  30, 2000.  The
increase in mortgage loans,  FHLB stock, and cash and cash equivalents  accounts
for the  majority of the asset  growth and is  partially  offset by decreases in
certificates of deposit and investment securities.

         Cash and Cash  Equivalents.  Cash and  cash  equivalents  increased  by
$665,000,  or 28.7% to  $2,982,000  at  September  30, 2000 from  $2,317,000  at
September 30, 1999.  This increase was a result of the maturity of $1,584,000 in
certificates of deposits and was partially offset by the purchase of $292,000 of
FHLB stock and the purchase of $423,000 in mortgage-backed securities.

         Certificates of Deposit.  Certificates of deposit  totaling  $1,584,000
matured during the year ending September 30, 2000,  leaving a balance of $80,000
at September 30, 2000.

         Investment Securities.  Investment securities decreased by $399,000, or
2.0%,  from  $20,211,000  at September 30, 1999 to  $19,812,000 at September 30,
2000 as some investment securities matured.

         Federal  Home Loan Bank Stock.  Investments  in Federal  Home Loan Bank
stock  increased by $292,000  from $365,000 at September 30, 1999 to $657,000 at
September 30, 2000.

         Mortgage-backed  Securities.  Mortgage-backed  securities  increased by
$423,000,  or 17.1%,  from  $2,484,000  at September  30, 1999 to  $2,907,000 at
September  30, 2000.  The increase  resulted from the purchase of a $1.1 million
mortgaged-backed  security and was partially  offset by the receipt of principal
payments on the mortgage-backed securities.

         Loans  Receivable.   Net  loans  increased  $4,307,000,  or  10.7%,  to
$44,477,000  at September 30, 2000 from  $40,170,000  at September 30, 1999. The
increase in loans was  primarily the result of increases in  one-to-four  family
residential  real estate  loans and equity line of credit loans (ELOC) that were
funded from funds on hand and cash advances from FHLB of Des Moines.

         Deposits.  Deposits  decreased  $3,291,000,  or 6.4%, to $48,256,000 at
September 30, 2000 compared to  $51,547,000  at September 30, 1999. The decrease
can be  attributed to the maturity of $1.5 million in special funds and some run
off of funds as competition in the market area continues to increase.

         FHLB Advances.  Cash advances from Federal Home Loan Bank of Des Moines
were  utilized  during the fiscal year ending  September 30, 2000 as part of the
Association's  investment  strategy to hedge  against  interest rate risk on the
fixed rate,  fixed term loans that were originated by the Association to hold in
it's portfolio and as needed for liquidity purposes.  The Association borrowed a
net $7.3 million  additional  in advances  during the year ended  September  30,
2000.

                                       9

<PAGE>


         Stockholders' Equity. Stockholders' equity decreased $532,000, or 5.0%,
from  $10,656,000 at September 30, 1999 to $10,124,000 at September 30, 2000, as
a result of quarterly dividend payments and the repurchase of treasury stock and
was partially offset by net income of $482,000.  During the year ended September
30, 2000, the Company  repurchased  76,920 shares of treasury stock at a cost of
$785,000.

Yields Earned and Rates Paid

         The earnings of the  Association  depend  largely on the spread between
the  yield  on   interest-earning   assets  and  the  cost  of  interest-bearing
liabilities, as well as the relative size of the Association's  interest-earning
assets and interest-bearing liability portfolios.

         The following table sets forth, for the periods indicated,  information
regarding average balances of assets and liabilities as well as the total dollar
amounts of interest  income from  average  interest-earning  assets and interest
expense on average interest-bearing liabilities, resultant yields, interest rate
spread,  net interest margin,  and ratio of average  interest-earning  assets to
average  interest-bearing  liabilities.  Average  balances have been  calculated
using the average of month-end balances during such year.





                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                                          Years ended September 30,
                                              --------------------------------------------------------------------------------
                                                                 1998                                    1999
                                              -------------------------------------    -------------------------------------
                                              Average        Interest &    Yield/      Average       Interest &     Yield/
                                              Balance (2)    Dividends     Cost        Balance (2)   Dividends      Cost
                                              ------------   ------------  --------    ------------  -------------  --------
                                                                                                    (Dollars In Thousands)
<S>                                               <C>             <C>         <C>          <C>             <C>         <C>
Interest-earning assets:
Loans receivable (1)                              $36,157         $2,695      7.45%        $38,775         $2,899      7.48%
Investment securities                              10,297            689      6.69          15,396            953      6.19
Mortgage-backed and related securities              3,742            297      7.94           2,978            222      7.45
Daily interest-bearing assets                       8,663            372      4.29           7,495            287      3.83
                                              ------------   ------------              ------------  -------------
   Total interest-earning assets                   58,859          4,053      6.89          64,644          4,361      6.75

Noninterest-earning assets:
 Office properties and
   equipment, net                                   1,141                                    1,132
 Other noninterest-earning assets                     598                                      744
                                              ------------                             ------------
   Total assets                                   $60,598                                  $66,520
                                              ============                             ============

Interest-earning liabilities:
 Passbook savings accounts                          5,800            160      2.76           5,898            163      2.76
 Demand and NOW accounts                            7,103            179      2.52           8,603            221      2.57
 Money market accounts                              2,861             93      3.25           2,778             90      3.24
 Certificates of deposit                           30,354          1,624      5.35          32,575          1,638      5.03
                                              ------------   ------------              ------------  -------------
  Total deposits                                   46,118          2,056      4.46          49,854          2,112      4.24
 Advances from FHLB                                 1,581             94      5.95           4,166            230      5.52
                                              ------------   ------------              ------------  -------------
  Total interest-bearing liabilities               47,699          2,150      4.51          54,020          2,342      4.34
Noninterest-bearing liabilities:
 Noninterest-bearing deposits                         570                                      875
 Other liabilities                                    993                                    1,075
                                              ------------                             ------------
  Total liabilities                                49,262                                   55,970
Stockholders' equity                               11,336                                   10,550
                                              ------------                             ------------
  Total liabilities and
   stockholders' equity                           $60,598                                  $66,520
                                              ============                             ============

Net interest income                                               $1,903                                   $2,019
                                                             ============                            =============

Interest rate spread                                                          2.38                                     2.41

Net interest margin                                                           3.23                                     3.12

Ratio of average interest-earning assets
 to average interest-bearing liabilities             123%                                     120%
</TABLE>

<TABLE>
<CAPTION>
                                                  Years ended September 30,
                                             -------------------------------------
                                                             2000
                                             -------------------------------------
                                             Average        Interest &     Yield/
                                             Balance (2)    Dividends      Cost
                                             -------------  ------------   -------

<S>                                               <C>            <C>         <C>
Interest-earning assets:
Loans receivable (1)                              $42,756        $3,286      7.69%
Investment securities                              20,251          1309      6.46
Mortgage-backed and related securities              2,630           191      7.26
Daily interest-bearing assets                       3,807           109      2.86
                                             -------------  ------------
   Total interest-earning assets                   69,444         4,895      7.05

Noninterest-earning assets:
 Office properties and

   equipment, net                                   1,088
 Other noninterest-earning assets                     911
                                             -------------
   Total assets                                   $71,443
                                             =============

Interest-earning liabilities:
 Passbook savings accounts                          5,587           156      2.79
 Demand and NOW accounts                            8,614           237      2.75
 Money market accounts                              2,529            84      3.32
 Certificates of deposit                           31,920         1,666      5.22
                                             -------------  ------------
  Total deposits                                   48,650         2,143      4.40
 Advances from FHLB                                10,215           621      6.08
                                             -------------  ------------
  Total interest-bearing liabilities               58,865         2,764      4.70
Noninterest-bearing liabilities:
 Noninterest-bearing deposits                        1032
 Other liabilities                                  1,209
                                             -------------
  Total liabilities                                61,106
Stockholders' equity                               10,337
                                             -------------
  Total liabilities and
   stockholders' equity                           $71,443
                                             =============

Net interest income                                              $2,131
                                                            ============

Interest rate spread                                                         2.35

Net interest margin                                                          3.07

Ratio of average interest-earning assets
 to average interest-bearing liabilities             118%
</TABLE>


----------------------------------------------
(1)   Average balances  include  nonaccrual loans and loans 90 days or more past
      due and loans held for sale.
(2)   Average  balances for a period have been  calculated  using the average of
      month-end balances during such period.



                                       11


<PAGE>

     The following  table sets forth (on a  consolidated  basis) for the periods
and at the dates indicated,  the weighted average yields earned on the Company's
assets,  the weighted average interest rates paid on the Company's  liabilities,
together with the net yield on interest-earning assets.


<TABLE>
<CAPTION>
                                                    Years Ended September 30,                    At
                                              ---------------------------------------       September 30,
                                                1998            1999            2000            2000
                                                ----            ----            ----            ----
<S>                                             <C>             <C>             <C>             <C>
Weighted average yield on loan portfolio        7.45 %          7.48 %          7.69 %          8.12 %
Weighted average yield on mortgage-
   backed and related securities............    6.69            7.45            7.26            7.41
Weighted average yield on investment
   securities................................   7.94            6.19            6.46            6.69
Weighted average yield on interest-
   bearing deposits.........................    4.29            3.83            2.86            2.62
Weighted average yield on all interest-
   earning assets...........................    6.89            6.75            7.05            7.45
Weighted average rate paid on
   total deposits............................   4.46            4.24            4.40            4.57
Weighted average rate paid on all
   advances from FHLB.................          5.95            5.52            6.08            6.47
Weighted average rate paid on all
   interest-bearing liabilities.............    4.51            4.34            4.70            4.98
Interest rate spread (spread between
   weighted average rate on all interest-
   earning assets and all interest-
   bearing liabilities).....................    2.38            2.41            2.35            2.47
Net interest margin (net interest income
   as a percentage of average
   interest-earning assets).................    3.23            3.12            3.07             N/A
</TABLE>





                                       12

<PAGE>

The following  table sets forth the effects of changing rates and volumes on net
interest  income of the  Company.  Information  is provided  with respect to (i)
effects on interest income  attributable to changes in volume (changes in volume
multiplied  by prior rate);  (ii)  effects on interest  income  attributable  to
changes in rate (changes in rate multiplied by prior volume);  and (iii) changes
in rate/volume (change in rate multiplied by change in volume).


<TABLE>
<CAPTION>
                                                                     Years Ended September 30,
                                          ---------------------------------------------------------------------------------
                                                 1999 Compared to 1998                         2000 Compared to 1999
                                                                     (Dollars In Thousands)
                                              Increase (Decrease) Due to                     Increase (Decrease) Due to
                                          ---------------------------------------       -----------------------------------
                                                                   Rate/                                     Rate/
                                              Rate      Volume    Volume      Net        Rate     Volume    Volume     Net
<S>                <C>                       <C>        <C>        <C>       <C>        <C>        <C>        <C>     <C>
Interest-earning assets:
  Loans receivable (1)                       $  10      $ 195      ($ 1)     $ 204      $  81      $ 298      $ 8     $ 387
  Investment securities                        (51)       341       (26)       264         42        301       13       356
  Mortgage-backed and related securities       (18)       (61)        4        (75)        (6)       (26)       1       (31)
  Daily interest-bearing deposits              (40)       (50)        5        (85)       (73)      (141)      36      (178)
                                              ----       ----         -       ----       ----      -----       --     -----

Total net change in income
  on interest-bearing assets                   (99)       425       (18)       308         44        432       58       534

Interest-bearing liabilities:
  Interest-bearing deposits                   (102)       166        (8)        56         80        (51)       2        31
  Advances from FHLB                            (7)       154       (11)       136         23        334       34       391
                                               ---        ---      ----        ---         --        ---       --       ---

Total net change in expenses
  on interest-bearing liabilities             (109)       320       (19)       192        103        283       36       422
                                            ------        ---      ----        ---       ----        ---       --       ---

Net change in net interest income            $  10      $ 105      $  1      $ 116      $ (59)     $ 149      $22     $ 112
                                            =======================================    ======================================
</TABLE>

-----------------------------------
(1) For  purposes  of  calculating  volume,  rate,  and  rate/volume  variances,
    nonaccrual loans were included in the weighted-average balance outstanding.



                                       13

<PAGE>

Liquidity and Capital Resources
-------------------------------

         The  Association's  primary  sources of funds are deposits and proceeds
from principal and interest  payments on loans and  mortgage-backed  securities.
While  maturities  and  scheduled  amortization  of  loans  and  mortgage-backed
securities  are a  predictable  source of  funds,  deposit  flows  and  mortgage
prepayments  are  greatly   influenced  by  general  interest  rates,   economic
conditions and competition. The Association also has access to and uses advances
from the Federal Home Loan Bank of Des Moines to supplement its supply of funds.

         The primary investing activity of the Association is the origination of
loans and purchasing of investment  securities and  mortgage-backed  securities.
Mortgage  loan  originations  in  excess  of  repayments   totaled   $4,307,000,
mortgage-backed  securities  had a net  increase of $423,000 and  investment  in
Federal  Home Loan Bank Stock  increased  $292,000.  There was a net decrease in
investments  securities  of $390,000  during the year ended  September 30, 1999.
Cash on hand,  maturing and calling of investments  and the use of cash advances
from Federal Home Loan Bank of Des Moines primarily funded these activities.

         The Association  must maintain an adequate level of liquidity to ensure
the  availability  of  sufficient  funds to  support  loan  growth  and  deposit
withdrawals,   to  satisfy  financial  commitments  and  to  take  advantage  of
investment  opportunities.  During  fiscal  year 1998 the  Association  used its
sources of funds primarily to fund loan  commitments and to pay maturing savings
certificates  and deposit  withdrawals.  During fiscal years 1999 and 2000,  the
Association used its sources of funds and cash advances to fund loan commitments
and purchase investment  securities.  At September 30, 2000, the Association had
loan commitments of $2,741,000.

         At September 30, 2000, savings certificates amounted to $31,913,000, or
66.2%, of the  Association's  total deposits,  including  $26,223,000  that were
scheduled to mature by September 30, 2001.  Historically,  the  Association  has
been  able to  retain a  significant  amount  of its  deposits  as they  mature.
Management  of the  Association  believes it has adequate  resources to fund all
loan  commitments  by savings  deposits and FHLB advances and that it can adjust
the  offering  rates of savings  certificates  to retain  deposits  in  changing
interest rate environments.

         During the year ended  September  30, 2000,  the OTS required a savings
institution  to maintain an average  daily  balance of liquid  assets  (cash and
eligible investments) equal to at least 4.0% of the average daily balance of its
net withdrawal  deposits and short-term  borrowings.  The Association's  average
liquidity  ratios were 36.7%,  39.4% and 40.6% during the years ended  September
30,  1998,  1999 and  2000,  respectively.  The  Association's  actual  ratio at
September 30, 2000 was 40.8%. The Association  consistently  maintains liquidity
levels in excess of regulatory requirements, and believes this is an appropriate
strategy for proper asset and liability management.

         The  Association  is required to maintain  specific  amounts of capital
pursuant to OTS  requirements.  As of September 30, 2000, the Association was in
compliance with all regulatory  capital  requirements  that were effective as of
such date with tangible,  core and risk-based capital ratios of 12.3%, 12.3% and
27.5%,  respectively.  See  Note  17 of  the  Notes  to  Consolidated  Financial
Statements.

                                       14

<PAGE>


Effect of Inflation and Changing Prices

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

Impact of New Accounting Standards
----------------------------------

         See Note 1 of the Notes to the Consolidated Financial Statements.


Year 2000 Issue

The year 2000 issue exists because many computer  systems and  applications  use
two-digit date fields to designate a year.  Date-sensitive systems may recognize
the year 2000 as 1900, or not all. This inability to recognize or properly treat
the year 2000 may cause erroneous results,  ranging from system  malfunctions to
incorrect or incomplete  processing.  As a user of computers,  computer software
and equipment utilizing embedded  microprocessors,  failure to resolve year 2000
issues could cause  substantial  disruption  of the  Association's  business and
could have a material adverse effect on the  Association's  business,  financial
condition or results of operations.

The Association  believes it has effectively  addressed the year 2000 issue. The
Association  did not  experience any system  malfunctions  and is unaware of any
year 2000 issues that have impaired the ability of the  Association's  borrowers
to repay their debt.

                                       15

<PAGE>


[KIRKPATRICK, PHILLIPS & MILLER LETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT
                      - - - - - - - - - - - - - - - - - - -


To the Board of Directors and Shareholders of NS&L Bancorp,  Inc. and Subsidiary
Neosho, Missouri.

We have audited the accompanying  consolidated statements of financial condition
of NS&L Bancorp,  Inc. and Subsidiary as of September 30, 1999 and 2000, and the
related consolidated  statements of income,  stockholders' equity and cash flows
for each of the three  years in the  period  ended  September  30,  2000.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of NS&L Bancorp,  Inc.
and  Subsidiary  as of  September  30,  1999 and 2000,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
September 30, 2000, in conformity with generally accepted accounting principles.




/s/ Kirkpatrick, Phillips & Miller
----------------------------------
KIRKPATRICK, PHILLIPS & MILLER

November 9, 2000
Springfield, Missouri




                                       16

<PAGE>


<TABLE>
<CAPTION>

                             NS&L BANCORP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                      ----------------------------------------------
                                September 30, 1999 and 2000

                                                                      1999                  2000
                                                                      ----                  ----
                           ASSETS
                           ------
<S>                                                               <C>                  <C>
Cash and cash equivalents, including
  interest-bearing accounts of $1,371,255 in
  1999 and $2,437,098 in 2000                                     $  2,316,542         $  2,981,902
Certificates of deposit                                              1,664,000               80,000
Investment securities available-for-sale,
  at fair value                                                        183,031              173,375
Investment securities held-to-maturity
  (estimated market value of $19,540,819 in 1999
  and $19,242,915 in 2000)                                          20,028,363           19,638,443
Investment in Federal Home Loan Bank stock, at cost                    365,400              657,100
Mortgage-backed securities held-to-maturity
  (estimated market value of $2,525,001 in 1999
  and $2,924,243 in 2000)                                            2,483,912            2,906,678
Loans held for sale                                                     79,262              386,292
Loans receivable, net                                               40,090,543           44,090,649
Income taxes recoverable - current                                      82,489                   --
Accrued interest receivable                                            513,563              560,413
Property and equipment,
  less accumulated depreciation                                      1,118,904            1,063,002
Intangible assets                                                       77,775               74,991
Other assets                                                           223,746              196,052
                                                                      --------              -------
    Total assets                                                  $ 69,227,530         $ 72,808,897
                                                                 =============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Customer deposits                                                 $ 51,546,988         $ 48,256,428
Advances from Federal Home Loan Bank                                 5,855,578           13,117,297
Advances from borrowers for taxes and insurance                        354,010              378,578
Income taxes payable - current                                              --               81,224
Deferred income taxes                                                  344,180              290,409
Other liabilities                                                      470,314              561,407
                                                                      --------              -------
    Total liabilities                                               58,571,070           62,685,343
                                                                   -----------           ----------

Commitments and Contigencies                                                --                   --

Preferred stock, $.01 par value; 2,000,000
  shares authorized, none issued                                            --                   --
Common stock, $.01 par value; 8,000,000 shares authorized,
  issued 1,012,441 in 1999 and 2000, outstanding
  741,866 in 1999 and 664,946 in 2000                                   10,124               10,124
Paid-in capital                                                     10,370,931           10,388,385
Retained earnings - substantially restricted                         4,956,386            5,051,208
Treasury stock, at cost, 270,575 shares in 1999
  and 347,495 in 2000                                               (4,174,612)          (4,959,579)
Unearned compensation                                                 (524,029)            (375,010)
Accumulated other comprehensive income                                  17,660                8,426
                                                                       -------                -----
    Total stockholders' equity                                      10,656,460           10,123,554
                                                                   -----------           ----------
    Total liabilities and stockholders' equity                    $ 69,227,530         $ 72,808,897
                                                                 =============         ============
</TABLE>


                    The accompanying notes are an integral part of the
                             consolidated financial statements




                                       17

<PAGE>
                       NS&L BANCORP, INC. AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME
                       ---------------------------------
                 Years Ended September 30, 1998, 1999 and 2000

<TABLE>
<CAPTION>
                                                                    1998              1999              2000
                                                                    ----              ----              ----
<S>                                                              <C>               <C>               <C>
Interest Income:
  Loans receivable                                               $2,695,123        $2,898,515        $3,286,171
  Investment securities                                             689,208           952,735         1,309,268
  Mortgage-backed and related securities                            296,973           222,218           190,794
  Other interest-earning assets                                     372,111           287,216           109,031
                                                                   --------          --------           -------
      Total interest income                                       4,053,415         4,360,684         4,895,264
                                                                 ----------        ----------         ---------

Interest Expense:

  Customer deposits                                               2,056,649         2,111,134         2,143,154
  Federal Home Loan Bank advances                                    93,839           230,347           620,683
                                                                    -------          --------           -------
      Total interest expense                                      2,150,488         2,341,481         2,763,837
                                                                 ----------        ----------         ---------

      Net interest income                                         1,902,927         2,019,203         2,131,427

Provision for Loan Losses                                             7,825            12,112            12,682
                                                                     ------           -------            ------
      Net interest income after provision for loan losses         1,895,102         2,007,091         2,118,745
                                                                 ----------        ----------         ---------

Noninterest Income:

  Gain on sale of investment securities                              18,125                --                --
  Gain on sale of loans                                               9,732            70,278            61,429
  Banking service charges and fees                                  162,902           206,821           221,079
  Mortgage banking fees                                             219,843           152,099           129,112
  Loan late charges                                                   7,621             8,840             9,658
  Other                                                               5,353            13,031            12,587
                                                                     ------           -------            ------
      Total noninterest income                                      423,576           451,069           433,865
                                                                   --------          --------           -------

Noninterest Expense:

  Compensation and employee benefits                                940,765         1,002,621         1,112,798
  Occupancy and equipment                                           188,689           194,423           186,103
  Deposit insurance premium                                          28,280            29,250            15,221
  Data processing                                                   102,418           120,301           131,083
  Printing, postage, stationery and supplies                         56,001            70,217            68,869
  Professional fees                                                  52,979            53,227            50,821
  Advertising                                                        42,423            47,935            54,124
  Other                                                             188,979           184,739           196,243
                                                                   --------          --------           -------
      Total noninterest expense                                   1,600,534         1,702,713         1,815,262
                                                                 ----------        ----------         ---------

      Income before taxes                                           718,144           755,447           737,348
  Income Taxes                                                      263,879           247,221           255,577
                                                                   --------          --------           -------

Net income                                                       $  454,265        $  508,226        $  481,771
                                                                 ==========        ==========         =========

Basic earnings per share                                         $     0.66        $     0.74        $     0.74
                                                                    =======           =======            ======

Diluted earnings per share                                       $     0.64        $     0.73        $     0.74
                                                                    =======           =======            ======
</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements



                                       18

<PAGE>

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 -----------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000
<TABLE>
<CAPTION>

                                                                   Common
                                                                    Stock
                                                          ------------------------        Paid-In       Retained         Treasury
                                                            Shares         Amount         Capital       Earnings           Stock
                                                          -----------    ---------      -----------   -------------    -------------
<S>                                                       <C>            <C>          <C>             <C>              <C>
Balances at September 30, 1997                            711,666        $   8,863    $  8,461,129    $  6,493,728     $ (2,414,324)

   Net income                                                  --               --              --         454,265               --
   Other comprehensive income, net of tax:
     Change in unrealized gain on
     securities available-for-sale, net of deferred
     income taxes of $(7,340)                                  --               --              --              --               --
     Less:  reclassification adjustment, net of
     deferred income taxes of $(6,706)                         --               --              --              --               --

       Total Comprehensive Income                         430,349

   Dividends ($.42 per share)                                  --               --              --        (300,109)              --
   Purchase of treasury stock at cost                     (94,827)              --              --              --       (1,746,051)
   Vesting of MRDP shares                                      --               --              --              --               --
   Release of ESOP shares                                      --               --          53,550              --               --
                                                       ----------     ------------    ------------    ------------     ------------

Balances at September 30, 1998                            616,839            8,863       8,514,679       6,647,884       (4,160,375)

  Net income                                                   --               --              --         508,226               --
 Other comprehensive income, net of tax:
     Change in unrealized gain on
     securities available-for-sale, net of deferred
     income taxes of $(7,703)                                  --               --              --              --               --

       Total Comprehensive Income                         495,110

   Dividends ($.59 per share)                                  --               --              --        (391,605)              --
   Stock dividend (20%)                                   123,627            1,236       1,806,883      (1,808,119)              --
   Net proceeds from issue of common stock                  2,500               25          33,725              --               --
   Common stock acquired by MRDP                               --               --              --              --               --
   Purchase of treasury stock at cost                      (1,100)              --              --              --          (14,237)
   Vesting of MRDP shares                                      --               --              --              --               --
   Release of ESOP shares                                      --               --          15,644              --               --
                                                       ----------     ------------    ------------    ------------     ------------

Balances at September 30, 1999                            741,866           10,124      10,370,931       4,956,386       (4,174,612)

  Net income                                                   --               --              --         481,771               --
 Other comprehensive income, net of tax:
     Change in unrealized gain on
     securities available-for-sale, net of deferred
     income taxes of $(5,423)                                  --               --              --              --               --

       Total Comprehensive Income                         472,537

   Dividends ($.64 per share)                                  --               --              --        (386,949)              --
   Purchase of treasury stock at cost                     (76,920)              --              --              --         (784,967)
   Vesting of MRDP shares                                      --               --              --              --               --
   Release of ESOP shares                                      --               --          17,454              --               --
                                                       ----------     ------------    ------------    ------------     ------------

Balances at September 30, 2000                            664,946     $     10,124    $ 10,388,385    $  5,051,208     $ (4,959,579)
                                                       ==========     ============    ============    ============     ============
</TABLE>

<TABLE>
<CAPTION>
                                                                          Accumulated
                                                                             Other            Total
                                                            Unearned     Comprehensive    Stockholders'
                                                          Compensation      Income           Equity
                                                        ---------------  ------------     -------------
<S>                                                     <C>              <C>              <C>
Balances at September 30, 1997                          $   (779,793)    $     54,692     $ 11,824,295
                                                                                          ------------
   Net income                                                     --               --          454,265
   Other comprehensive income, net of tax:
     Change in unrealized gain on
     securities available-for-sale, net of deferred
     income taxes of $(7,340)                                     --          (12,497)         (12,497)
     Less:  reclassification adjustment, net of
     deferred income taxes of $(6,706)                            --          (11,419)         (11,419)
                                                                                          ------------
       Total Comprehensive Income
                                                                                          ------------
   Dividends ($.42 per share)                                     --               --         (300,109)
   Purchase of treasury stock at cost                             --               --       (1,746,051)
   Vesting of MRDP shares                                     74,074               --           74,074
   Release of ESOP shares                                     68,520               --          122,070
                                                        ------------     ------------     ------------

Balances at September 30, 1998                              (637,199)          30,776       10,404,628
                                                                                          ------------
  Net income                                                      --               --          508,226
 Other comprehensive income, net of tax:
     Change in unrealized gain on
     securities available-for-sale, net of deferred
     income taxes of $(7,703)                                     --          (13,116)         (13,116)
                                                                                          ------------
       Total Comprehensive Income                                                              495,110
                                                                                          ------------
   Dividends ($.59 per share)                                     --               --         (391,605)
   Stock dividend (20%)                                           --               --               --
   Net proceeds from issue of common stock                        --               --           33,750
   Common stock acquired by MRDP                             (33,750)              --          (33,750)
   Purchase of treasury stock at cost                             --               --          (14,237)
   Vesting of MRDP shares                                     78,575               --           78,575
   Release of ESOP shares                                     68,346               --           83,990
                                                        ------------     ------------     ------------

Balances at September 30, 1999                              (524,029)          17,660       10,656,460
                                                                                          ------------
  Net income                                                      --               --          481,771
 Other comprehensive income, net of tax:
     Change in unrealized gain on
     securities available-for-sale, net of deferred
     income taxes of $(5,423)                                     --           (9,234)          (9,234)
       Total Comprehensive Income                                                              472,537
                                                                                           ------------
   Dividends ($.64 per share)                                     --               --         (386,949)
   Purchase of treasury stock at cost                             --               --         (784,967)
   Vesting of MRDP shares                                     80,825               --           80,825
   Release of ESOP shares                                     68,194               --           85,648
                                                        ------------     ------------     ------------

Balances at September 30, 2000                          $   (375,010)    $      8,426     $ 10,123,554
                                                        ============     ============     ============
</TABLE>




The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements


                                       19



<PAGE>

                        NS&L BANCORP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000

<TABLE>
<CAPTION>

                                                                         1998             1999                2000
                                                                         ----             ----                ----
<S>                                                                    <C>               <C>                <C>
Cash flows from operating activities:

  Net income                                                           $ 454,265         $ 508,226          $ 481,771
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Depreciation                                                        88,479            95,502             85,857
      Amortization                                                         2,784             2,784              2,784
      Premiums and discounts on mortgage-backed
        securities and investment securities                            (116,814)          (90,640)           (90,174)
      Origination of loans held for sale                                (968,673)       (5,611,609)        (4,795,292)
      Proceeds from sale of loans held for sale                          923,282         5,687,356          4,549,484
      Provision for loan losses                                            7,825            12,112             12,682
      Gain on sale of investment securities                              (18,125)                -                  -
      Gain on sale of loans                                               (9,732)          (70,278)           (61,429)
      Loss on sale of equipment                                                -             1,217                  -
      Vesting of MRDP shares                                              74,074            78,574             80,825
      Release of ESOP shares                                             122,070            83,990             85,648
      Net change in operating accounts:
        Accrued interest receivable                                       93,990          (153,347)           (46,850)
        Other assets                                                         893           (83,376)            27,694
        Other liabilities                                                 52,263            53,265            103,411
        Income taxes payable - deferred                                  (24,073)           11,773            (48,349)
        Income taxes payable - current                                   (58,716)          (93,008)           163,713
                                                                    ------------     --------------      -------------
          Net cash from operating activities                            623,792           432,541             551,775
                                                                    ------------     --------------      -------------

Cash flows from investing activities:

  Purchase of investment securities held-to-maturity                  (6,602,800)      (15,087,234)          (280,000)
  Proceeds from maturities of investment
    securities held-to-maturity                                       10,344,102         4,535,000            750,000
  Purchase of investment securities available-for-sale                         -                 -             (5,000)
  Net change in certificates of deposit                                 (297,000)         (990,000)         1,584,000
  Proceeds from sales of investment
    securities available-for-sale                                         43,125                 -                  -
  Proceeds from sale of Federal Home Loan Bank stock                      55,200                 -                  -
  Purchase of Federal Home Loan Bank stock                                     -                 -           (291,700)
  Net change in loans receivable                                      (3,591,801)       (2,686,745)        (4,216,414)
  Purchase of mortgage-backed and
    related securities held-to-maturity                                        -          (560,507)        (1,096,233)
  Proceeds from principal payments and
    maturities of mortgage-backed securities
    held-to-maturity                                                   1,378,323         1,213,666            683,561
  Proceeds from sale of repossessed assets                                     -             5,527            203,832
  Purchases of property and equipment                                    (58,660)          (85,592)           (29,955)
                                                                    ------------     --------------      -------------
          Net cash from (used in) investing activities              $ 1,270,489      $ (13,655,885)      $ (2,697,909)
                                                                    ------------     --------------      -------------

</TABLE>



The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements


                                       20



<PAGE>

                        NS&L BANCORP, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                -------------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000

<TABLE>
<CAPTION>

                                                                     1998               1999                  2000
                                                                     ----               ----                  ----
<S>                                                             <C>                  <C>                  <C>
Cash flows from financing activities:
  Net change in demand deposits,
    savings accounts, and certificates of deposit               $  4,052,114         $  3,602,499         $ (3,290,560)
  Proceeds from Federal Home Loan Bank advances                    3,000,000            2,000,000           34,483,100
  Payments on Federal Home Loan Bank advances                     (2,013,868)            (130,556)         (27,221,381)
  Cash dividends paid                                               (311,963)            (350,010)            (399,266)
  Purchase of treasury stock                                      (1,746,051)             (14,237)            (784,967)
  Net increase (decrease) in mortgage escrow funds                   (12,349)              48,811               24,568
                                                                    --------              -------               ------
    Net cash from financing activities                             2,967,883            5,156,507            2,811,494
                                                                  ----------           ----------            ---------

Net increase (decrease) in cash and cash equivalents               4,862,164           (8,066,837)             665,360

Cash and cash equivalents-beginning of year                        5,521,215           10,383,379            2,316,542
                                                                  ----------          -----------            ---------

Cash and cash equivalents-end of year                           $ 10,383,379         $  2,316,542         $  2,981,902
                                                               =============         ============          ===========

Supplemental disclosures of

  cash flow information:

   Cash paid during the year for:

      Interest                                                  $  2,158,283         $  2,362,186         $  2,724,222
      Income taxes                                                   348,953              329,097              179,481

Supplemental schedule of non-cash
  investing and financing activities:

  Dividends declared September 17,
    1998, payable October 30, 1998                              $     77,105         $         --         $         --
  Dividends declared September 15,
    1999, payable October 29, 1999                                        --              118,699                   --
  Dividends declared September 20,
    2000, payable October 31, 2000                                        --                   --              106,381
  Loan receivable transferred to property and
    equipment in settlement of loan                                   11,811                   --                   --
  Loans transferred to foreclosed and repossessed assets                  --                5,527              216,489
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements

                                       21
<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                  Years Ended September 30, 1998, 1999 and 2000


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      NS&L Bancorp,  Inc. (the  "Company")  is a Missouri  corporation  that was
      organized in February  1995 for the purpose of becoming a unitary  savings
      and loan holding  company for Neosho  Savings and Loan  Association,  F.A.
      (the  "Association").  The Association is primarily engaged in providing a
      full range of banking and mortgage  services to individuals  and corporate
      customers.  In August of 1997  Crawford  Mortgage,  Inc.  was  formed as a
      subsidiary  of  the  Association.   Crawford  Mortgage,   Inc.  originates
      mortgages primarily in Missouri.

      To assist  the  reader in  evaluating  the  financial  statements  of NS&L
      Bancorp,  Inc. and  Subsidiary,  the significant  accounting  policies are
      summarized below.

      Use of estimates - Management  uses estimates and assumptions in preparing
      these  financial   statements  in  accordance   with  generally   accepted
      accounting principles. Those estimates and assumptions affect the reported
      amounts of assets and liabilities, the disclosure of contingent assets and
      liabilities,  and the reported revenues and expenses. Actual results could
      vary from the estimates that were used.

      Material estimates that are particularly susceptible to significant change
      relate to the  determination  of the  allowance  for loan  losses  and the
      valuation of real estate  acquired in connection  with  foreclosures or in
      satisfaction of loans.

      While  management uses available  information to recognize losses on loans
      and  foreclosed  real estate,  future  additions to the  allowances may be
      necessary  based on changes in local  economic  conditions.  In  addition,
      regulatory  agencies,  as an integral part of their  examination  process,
      periodically  review  the  Association's  allowances  for loan  losses and
      foreclosed  real  estate.  Such  agencies may require the  Association  to
      recognize  additions  to the  allowances  based on their  judgments  about
      information available to them at the time of their examination.

      Principles of  consolidation  - The  accompanying  consolidated  financial
      statements include the accounts of NS&L Bancorp, Inc. and its wholly-owned
      subsidiary,  the Association,  and NS&L Enterprises and Crawford  Mortgage
      Inc., wholly-owned subsidiaries of the Association. In consolidation,  all
      significant intercompany balances and transactions have been eliminated.

      Consolidated  statements of cash flows - For purposes of the  consolidated
      statements of cash flows,  cash consists of cash on hand and deposits with
      other financial  institutions  which are  unrestricted as to withdrawal or
      use. Cash equivalents include highly-liquid instruments with maturities of
      three months or less at the date of their acquisition.



                                        22
<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
    --------------------------------------------------------

      Investment  securities  and  mortgage-backed  securities - Securities  are
      classified  in  accordance  with the  Statement  of  Financial  Accounting
      Standards  ("SFAS") No. 115,  "Accounting for Certain  Investments in Debt
      and  Equity  Securities,"  which  established  three   classifications  of
      investment securities:  held-to-maturity,  trading and available-for-sale.
      Trading  securities are acquired  principally for the purpose of near term
      sales. Such securities are reported at fair value and unrealized gains and
      losses are included in income. At September 30, 1999 and 2000, the Company
      had no securities  designated as trading securities.  Securities which are
      designated as held-to-maturity are designated as such because the investor
      has the ability and the intent to hold these securities to maturity.  Such
      securities are reported at amortized cost.

      All other securities are designated as  available-for-sale,  a designation
      which  provides the  investor  with  certain  flexibility  in managing its
      investment  portfolio.  Such  securities  are reported at fair value;  net
      unrealized  gains and losses are excluded  from income and reported net of
      applicable income taxes as a separate  component of stockholders'  equity.
      Gains or losses on sales of securities are recognized in operations at the
      time of sale and are  determined by the  difference  between the net sales
      proceeds and the cost of the securities using the specific  identification
      method,  adjusted for any unamortized  premiums or discounts.  Premiums or
      discounts  are  amortized or accreted to income using the interest  method
      over the period to maturity.

      Loans held for sale - Loans held for sale include  mortgage and  education
      loans and are  carried at the lower of cost or fair value on an  aggregate
      basis.

      Loans  receivable - Loans  receivable are stated at their principal amount
      outstanding,  net of deferred loan  origination  and  commitment  fees and
      certain direct costs,  which are recognized over the  contractual  life of
      the loan as an adjustment of the loan's yield. Interest income on loans is
      recognized on an accrual basis.

      Non-performing  loans  are  placed  on a  nonaccrual  status  when  it  is
      determined  that the  payment of  interest  or  principal  is  doubtful of
      collection,  or when  interest or  principal  is past due 90 days or more,
      except when the loan is well secured and in the process of collection. Any
      accrued  but  uncollected  interest  previously  recorded on such loans is
      generally   reversed  in  the  current  period  and  interest   income  is
      subsequently  recognized upon collection.  Cash  collections  subsequently
      received  are  applied  against  outstanding  principal  until the loan is
      considered fully collectible,  after which cash collections are recognized
      as interest income.  As of September 30, 2000, the Company had no material
      loans which were impaired.

      Property, equipment and related depreciation - Property and equipment have
      been  stated  at cost.  Depreciation  has  been  principally  computed  by
      applying the following methods and estimated lives:

                 Category            Estimated Life            Method
         -------------------------   --------------     ---------------------
          Office furniture,                             Straight-line and
           fixtures and equipment      3-10 Years         declining-balance
          Buildings and lease-                          Straight-line and
           hold improvements          10-40 Years         declining-balance


                                        23

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
      --------------------------------------------------------

      Intangible   assets  -  Intangible   assets  have  been  recorded  by  the
      Association  in  connection  with the  acquisition  of the net  assets  of
      Crawford  Mortgage,  Inc.  Goodwill,  which  represents  the excess of the
      purchase price over the estimated market value of net assets acquired,  is
      being amortized on a straight-line  basis over thirty years.  Amortization
      expense  charged to  operations  amounted  to $2,784 for each of the years
      ended September 30, 1998, 1999 and 2000.

      Income taxes - The Company files a consolidated  federal income tax return
      with  its  wholly-owned  subsidiary.  The  income  tax  effect  of  timing
      differences in reporting  transactions for financial  reporting and income
      tax purposes is reflected in the financial  statements as deferred  income
      taxes.

      Deferred tax liabilities and assets are determined based on the difference
      between the financial  statement  and tax bases of assets and  liabilities
      using  enacted  tax rates in effect for the year in which the  differences
      are expected to reverse.  A valuation  allowance  would be  established to
      reduce deferred tax assets if it is more likely than not that all, or some
      portion, of a deferred tax asset will not be realized.

      Allowance  for loan losses - The allowance for loan losses is increased by
      charges to income and decreased by charge-offs, net of recoveries, if any.
      Management's periodic evaluation of the adequacy of the allowance is based
      on the Association's past loan loss experiences,  known and inherent risks
      in the  portfolio,  adverse  situations  that may  affect  the  borrowers'
      ability to repay,  the estimated value of any underlying  collateral,  and
      current economic conditions.

      Foreclosed  real estate - Real estate  acquired in  settlement of loans is
      carried  at the lower of the  balance of the  related  loan at the time of
      foreclosure or fair value less the estimated costs to sell the asset.

      Loan origination fees - Loan fees received are accounted for in accordance
      with SFAS No. 91,  "Accounting for Nonrefundable Fees and Costs Associated
      with  Originating or Acquiring  Loans and Initial Direct Costs of Leases."
      Under  SFAS  No.  91,  loan  origination  fees  and  certain  direct  loan
      origination  costs are deferred and recognized in interest income over the
      contractual  lives of the related loans using the interest method.  When a
      loan is paid off or sold, the  unamortized  balance of these deferred fees
      and costs are recognized in income.

      Advertising costs - The Company expenses non-direct  response  advertising
      costs as they are incurred.

      Stock  dividend - On March 24,  1999,  the  Company's  Board of  Directors
      declared a twenty  percent  stock  dividend of NS&L Bancorp,  Inc.  common
      stock to  stockholders  of record on April 15, 1999,  payable on April 30,
      1999.  Common  stock and  paid-in  capital  were  increased  and  retained
      earnings was reduced for the  aggregate  value of the shares  issued.  The
      stated par value of each share was not changed from $.01.

      All per share amounts and average shares outstanding have been restated to
      reflect the aforementioned stock dividend.

                                        24

<PAGE>

                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
      --------------------------------------------------------

      Earnings per share - In February 1997, the Financial  Accounting Standards
      Board  ("FASB")  issued SFAS No. 128,  "Earnings  Per Share." SFAS No. 128
      replaces  the   presentation   of  primary   earnings  per  share  with  a
      presentation  of basic and diluted  earnings  per share on the face of the
      income  statement for all entities with complex capital  structures.  SFAS
      No. 128 also requires a reconciliation of the numerator and denominator of
      the basic and diluted earnings per share computation.

      Basic earnings per share excludes dilution and is computed by dividing net
      income available to common  stockholders by the weighted average number of
      common shares  outstanding  during the period.  Diluted earnings per share
      reflects the  potential  dilution  that could occur if securities or other
      contracts to issue common stock were exercised or resulted in the issuance
      of common stock that would share in the earnings of the Company.  Dilutive
      potential  common  shares are added to  weighted  average  shares  used to
      compute  basic  earnings  per share.  The  number of shares  that would be
      issued from the  exercise of stock  options has been reduced by the number
      of shares that could have been  purchased from the proceeds at the average
      market price of the Company's stock.

      Comprehensiveincome  -  The  Company  adopted  SFAS  No.  130,  "Reporting
      Comprehensive  Income,"  as of  October  1,  1998.  Accounting  principles
      generally require that recognized revenue,  expenses,  gains and losses be
      included  in  net  income.   Although   certain   changes  in  assets  and
      liabilities,  such as  unrealized  gains and losses on  available-for-sale
      securities,  are reported as a separate component of the equity section of
      the balance sheet,  such items,  along with net income,  are components of
      comprehensive  income.  The  adoption of SFAS No. 130 had no effect on the
      Company's net income or shareholders' equity.

      New  accounting  standards  - In June  1998,  FASB  issued  SFAS No.  133,
      "Accounting  for Derivative  Instruments  and Hedging  Activities,"  which
      establishes accounting and reporting standards for derivative instruments,
      including  certain  derivative  instruments  embedded in other  contracts,
      (collectively  referred to as derivatives) and for hedging activities.  It
      requires  that an entity  recognize  all  derivatives  as either assets or
      liabilities  in the  statement  of financial  position  and measure  those
      instruments at fair value.  In June 1999, SFAS No. 133 was amended by SFAS
      No. 137,  "Accounting for Derivative  Instruments and Hedging Activities -
      Deferral of the Effective  Date of FASB  Statement No. 133" which deferred
      the effective  date to the first quarter of fiscal years  beginning  after
      June 15,  2000.  In June 2000,  SFAS No. 133 was  amended by SFAS No. 138,
      "Accounting  for  Certain  Derivative   Instruments  and  Certain  Hedging
      Activities"  which adds  guidance  related to  accounting  for  derivative
      instruments and hedging  activities.  The adoption of this standard is not
      expected to have a material impact on the Company.


                                       25

<PAGE>

                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
      --------------------------------------------------------

      In October 1999, FASB issued SFAS No. 134, "Accounting for Mortgage-Backed
      Securities  Retained after the  Securitization  of Mortgage Loans Held for
      Sale by a Mortgage Banking  Enterprise," which established  accounting and
      reporting standards for certain activities of mortgage banking enterprises
      and  other  enterprises  that are  substantially  similar  to the  primary
      operations of a mortgage  banking  enterprise.  It requires that after the
      securitization  of a  mortgage  loan held for sale,  an entity  engaged in
      mortgage  banking  activities   classify  the  resulting   mortgage-backed
      security as a trading security. This statement was adopted during the year
      ended  September  30, 2000.  The adoption of this  standard did not have a
      material impact on the Company.

      Reclassifications  - Certain  accounts  in the  prior-years'  consolidated
      financial  statements have been  reclassified for comparative  purposes to
      conform with the presentation in the current-year  consolidated  financial
      statements.

(2)   INVESTMENT SECURITIES
      ---------------------

      As discussed in Note (1), the Company has designated certain securities as
      available-for-sale. The carrying amounts of investment securities as shown
      in  the  consolidated   statements  of  financial  condition,   and  their
      approximate market values were as follows:

      A summary of  investment  securities  available-for-sale  at September 30,
      1999 is as follows:


                                           Gross Unrealized          Estimated
                           Amortized    -----------------------        Fair
                             Cost         Gains         Losses         Value
                        -------------   ---------   -----------    -----------
      Common stock      $     155,000   $  32,719   $     4,688    $   183,031
                        =============   =========   ===========    ===========

      There were no sales of common stock held as available-for-sale  during the
      year ended September 30, 1999.

      Proceeds from the sales of common stock held as available-for-sale  during
      the year ended  September  30,  1998 were  $43,125.  A gain of $18,125 was
      recognized on these sales.

      A summary of the investment  securities  held-to-maturity at September 30,
      1999 is as follows:

<TABLE>
<CAPTION>
                                                                 Gross Unrealized         Estimated
                                              Amortized       -----------------------        Fair
                                                Cost            Gains        Losses         Value
                                           -------------      ---------   -----------    -----------
<S>                                         <C>              <C>            <C>          <C>
      U.S. Treasury securities and
         obligations of U.S. government
         corporations and agencies          $18,969,507      $  133,178     $ 607,391    $18,495,294
      Obligations of states and
         political subdivisions               1,058,856           6,761        20,092      1,045,525
                                            -----------      ----------     ---------    -----------
             Total                          $20,028,363      $  139,939     $ 627,483    $19,540,819
                                            ===========      ==========     =========    ===========
</TABLE>

                                       26

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(2)           INVESTMENT SECURITIES - (CONTINUED)
              -----------------------------------

      A summary of  investment  securities  available-for-sale  at September 30,
      2000 is as follows:

<TABLE>
<CAPTION>
                                                 Gross Unrealized        Estimated
                             Amortized       -----------------------        Fair
                               Cost            Gains        Losses         Value
                          -------------      ---------   -----------    -----------
<S>                       <C>                <C>          <C>          <C>
      Common Stock       $      160,000      $  16,250    $   2,875    $  173,375
                         ==============      =========    =========    ============
</TABLE>



              There  were no sales of common  stock  held as  available-for-sale
during the year ended September 30, 2000.

              A  summary  of  the  investment  securities   held-to-maturity  at
September 30, 2000 is as follows:


<TABLE>
<CAPTION>
                                                                          Gross Unrealized            Estimated
                                              Amortized                -----------------------          Fair
                                                Cost                     Gains        Losses            Value
                                           -------------              ---------   -----------        -----------
<S>                                         <C>                       <C>            <C>             <C>
      U.S. Treasury securities and
         obligations of U.S. government
         corporations and agencies           $ 18,299,347              $ 121,035     $ 490,461       $ 17,929,921
      Obligations of states and
         political subdivisions                 1,339,096                  2,814        28,916          1,312,994
                                             ------------              ---------     ---------       ------------
            Total                            $ 19,638,443              $ 123,849     $ 519,377       $ 19,242,915
                                             ============              =========     =========       ============
</TABLE>


      The  amortized  cost and estimated  market value of investment  securities
      held-to-maturity at September 30, 2000, by contractual maturity, are shown
      below. Expected maturities will differ from contractual maturities because
      borrowers may have the right to call or prepay obligations with or without
      call or prepayment penalties.

<TABLE>
<CAPTION>
                                                               Amortized          Estimated
                                                                 Cost            Fair Value
                                                           ---------------     --------------
<S>                                                        <C>                 <C>
      Due in one year or less                              $        84,953     $       85,000
      Due after one year through five years                      6,228,785          6,139,605
      Due after five years through ten years                    12,289,705         12,032,760
      Due after ten years                                        1,035,000            985,550
                                                           ---------------     --------------
            Total                                          $    19,638,443     $   19,242,915
                                                           ===============     ==============
</TABLE>


      Securities  pledged as collateral had book values of $1,530,338 and market
      values of  $1,544,634  at  September  30, 1999.  There were no  securities
      pledged as collateral at September 30, 2000.


                                       27

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


 (3)  INVESTMENT IN FEDERAL HOME LOAN BANK STOCK
      ------------------------------------------

      Investment  in stock of the  Federal  Home Loan Bank is required by law of
      every  federally-insured  savings institution.  No ready market exists for
      this stock and it has no quoted market value. However,  redemption of this
      stock has been at par value.

      The Savings Bank, as a member of the Federal Home Loan Bank of Des Moines,
      is required  to acquire  and hold  shares of capital  stock in the Federal
      Home Loan Bank of Des Moines in an amount equal to the greater of (i) 1.0%
      of the aggregate  outstanding  principal  amount of  residential  mortgage
      loans, home purchase contracts and similar obligations at the beginning of
      each year, or (ii) 1/20 of its advances (borrowings) from the Federal Home
      Loan Bank of Des  Moines.  The  Savings  Bank is in  compliance  with this
      requirement  with an  investment  in Federal  Home Loan Bank of Des Moines
      stock of $657,100 at September 30, 2000.

 (4)  MORTGAGE-BACKED SECURITIES
      --------------------------

      As discussed in Note (1), the carrying values and estimated  market values
      of mortgage-backed securities are summarized below:

<TABLE>
<CAPTION>
                                                              September 30, 1999
                              ------------------------------------------------------------------------------
                                 Principal            Unamortized             Unearned           Carrying
                                  Balance               Premiums              Discounts            Value
                              ----------------      ----------------       --------------      -------------
<S>                           <C>                   <C>                    <C>                 <C>
      GNMA Certificates       $        835,216      $          2,736       $        2,317      $     835,635
      FHLMC Certificates               520,677                    60               32,690            488,047
      FNMA Certificates              1,166,830                    -                 6,600          1,160,230
                              ----------------      ----------------       --------------      -------------
                              $      2,522,723      $          2,796       $       41,607      $   2,483,912
                              ================      ================       ==============      =============
<CAPTION>

                                                         Gross                  Gross            Estimated
                                 Carrying              Unrealized             Unrealized              Market
                                  Value                  Gains                 Losses                Value
                              ----------------      ----------------       --------------      -------------
<S>                           <C>                   <C>                    <C>                 <C>
      GNMA Certificates       $        835,635      $          2,858       $        2,441      $     836,052
      FHLMC Certificates               488,047                33,005                   60            520,992
      FNMA Certificates              1,160,230                 7,727                   -           1,167,957
                              ----------------      ----------------       --------------      -------------
                              $      2,483,912      $         43,590       $        2,501      $   2,525,001
                              ================      ================       ==============      =============
</TABLE>



                                     28


<PAGE>




                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(4)   MORTGAGE-BACKED SECURITIES - (CONTINUED)
      ----------------------------------------

<TABLE>
<CAPTION>
                                                                   September 30, 2000
                                     -------------------------------------------------------------------------------
                                      Principal             Unamortized           Unearned                 Carrying
                                       Balance               Premiums             Discounts                 Value
                                     -----------           -----------            ---------              -----------

<S>                                  <C>                   <C>                    <C>                    <C>
      GNMA Certificates              $   668,330           $     2,007            $   1,924              $   668,413
      FHLMC Certificates                 435,946                    46               24,641                  411,351
      FNMA Certificates                1,839,782                    -                12,868                1,826,914
                                     -----------           -----------            ---------              -----------
                                     $ 2,944,058           $     2,053            $  39,433              $ 2,906,678
                                     ===========           ===========            =========              ===========
<CAPTION>

                                                              Gross                 Gross                  Estimated
                                      Carrying              Unrealized            Unrealized                  Market
                                       Value                  Gains                 Losses                    Value
                                     -----------           -----------            ---------              -----------
<S>                                  <C>                   <C>                    <C>                    <C>
      GNMA Certificates              $   668,413           $        -             $   6,355              $   662,058
      FHLMC Certificates                 411,351                26,782                  445                  437,688
      FNMA Certificates                1,826,914                 4,145                6,562                1,824,497
                                     -----------           -----------            ---------              -----------
                                     $ 2,906,678           $    30,927            $  13,362              $ 2,924,243
                                     ===========           ===========            =========              ===========
</TABLE>


      The mortgage-backed  securities presented above are non-equity securities.
      Management  does not believe there is  substantial  risk  associated  with
      these securities.

 (5)  LOANS RECEIVABLE
      ----------------

              Loans receivable consist of the following:
<TABLE>
<CAPTION>
                                                                            September 30,
                                                            --------------------------------------------
                                                                  1999                         2000
                                                            ---------------             ----------------
<S>                                                         <C>                         <C>
              Mortgage loans:
                One-to-four dwelling units                  $    34,220,790             $    38,465,040
                Commercial                                          856,622                     768,605
                Construction                                      2,162,675                     654,400
                Land                                                      -                      42,350
                                                            ---------------             ---------------
                    Total mortgage loans                         37,240,087                  39,930,395
                                                            ---------------             ---------------
              Other loans:
                Loans on deposits                                   481,674                     364,873
                Home equity loans                                 1,646,777                   1,992,746
                Consumer and automobile                           1,599,428                   2,058,407
                Unsecured                                             1,600                          -
                                                            ---------------             ---------------
                    Total other loans                             3,729,479                   4,416,026
                                                            ---------------             ---------------
              Less:
                Undisbursed portion of loans in process             858,417                     284,620
                Net deferred loan origination fees (costs)          (42,100)                   (91,579)
                Allowance for loan losses                            62,706                      62,731
                                                            ---------------             ---------------
                    Net loans receivable                    $    40,090,543             $    44,090,649
                                                            ===============             ===============
</TABLE>


                                      29

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(5)   LOANS RECEIVABLE - (CONTINUED)
      ------------------------------

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

                                      Years Ended September 30,
                                 1998            1999             2000
                               --------        ---------       ----------

      Beginning balance        $ 43,787        $ 51,612        $  62,706
      Provision charged
        to income                 7,825          12,112           12,682
      Net charge-offs                -           (1,018)         (12,657)
                               --------        --------        ---------
          Ending balance       $ 51,612        $ 62,706        $  62,731
                               ========        ========        =========

      The Association primarily grants residential loans to customers throughout
      southwest Missouri. The loans are typically secured by real estate.

(6)   ACCRUED INTEREST RECEIVABLE
      ---------------------------

              Accrued interest receivable is summarized as follows:

                                                       September 30,
                                                   --------------------
                                                   1999            2000
                                                   ----            ----
              Investment securities            $  288,572      $  304,174
              Mortgage-backed securities           18,423          19,966
              Loans receivable                    206,568         236,273
                                               ----------      ----------
                                               $  513,563      $  560,413
                                               ==========      ==========

(7)           PROPERTY AND EQUIPMENT

              Property and equipment consists of the following:


                                               September 30, 1999
                                               ------------------
                                                     Accum.
               Category                 Cost         Deprec.         Net
               --------            -----------     ---------    ------------
      Land                         $   402,015     $      -     $    402,015
      Leasehold improvements            13,198         1,467          11,731
      Buildings                      1,125,399       585,466         539,933
      Office furniture, fixtures
          and equipment                559,007       393,782         165,225
                                   -----------     ---------    ------------
                                   $ 2,099,619     $ 980,715    $  1,118,904
                                   ===========     =========    ============


                                       30
<PAGE>



                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(7)           PROPERTY AND EQUIPMENT - (CONTINUED)
              ------------------------------------

                                                September 30, 2000
                                                ------------------
                                                      Accum.
               Category                 Cost          Deprec.           Net
               --------                 ----          -------           ---
      Land                         $   402,015    $        -       $   402,015
      Leasehold improvements            13,198          2,148           11,050
      Buildings                      1,125,399        625,328          500,071
      Office furniture, fixtures
          and equipment                523,908        374,042          149,866
                                   -----------    -----------      -----------
                                   $ 2,064,520    $ 1,001,518      $ 1,063,002
                                   ===========    ===========      ===========

      Depreciation charged to operations for the years ended September 30, 1998,
      1999 and 2000 was $88,479, $95,502, and $85,857.

(8)           INCOME TAXES

              The provision for income tax expense is as follows:

                                 Years Ended September 30,
                         ----------------------------------------
                            1998          1999              2000
                         ----------     ---------        --------

              Current    $ 322,595      $ 235,448        $ 303,926
              Deferred     (58,716)        11,773          (48,349)
                         ---------      ---------        ---------
                  Total  $ 263,879      $ 247,221        $ 255,577
                         =========      =========        =========

      The provision for income taxes differs from that computed at the statutory
      corporate rate of 34% as follows:

                                                 Years Ended September 30,
                                          ------------------------------------
                                             1998          1999         2000
                                          ----------   -----------   ---------

      Tax at statutory rate               $ 244,169    $  256,852    $ 250,698
      Increase (decrease) in taxes
        resulting from:
          State taxes, net of federal
            benefit                           9,097         8,457       25,849
          Non-deductible expenses            25,222         8,310        7,977
          Tax-exempt income                 (15,381)      (18,533)     (22,820)
          Other                                 772        (7,865)      (6,127)
                                          ---------    ----------    ---------
      Provision for income taxes          $ 263,879    $  247,221    $ 255,577
                                          =========    ==========    =========


                                       31
<PAGE>




                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                  Years Ended September 30, 1998, 1999 and 2000

(8)   INCOME TAXES - (CONTINUED)
      --------------------------

      Deferred income tax expense (benefit)  results from timing  differences in
      the  recognition  of income and  expense for tax and  financial  reporting
      purposes.  The sources of the  differences and the related tax effects are
      as follows:

<TABLE>
<CAPTION>
                                                                        Years Ended September 30,
                                                           ------------------------------------------------
                                                                  1998              1999            2000
                                                            -------------       ------------      ---------
<S>                                                             <C>              <C>              <C>
      Difference from depreciation methods used
        for tax purposes and financial statements             $   (1,347)        $    128         $  2,035
      Use of different methods for computing
        loan loss reserves for tax purposes and
        financial statements                                      (2,895)         (40,494)         (23,826)
      Difference from accretion methods used
        for mortgage-backed security discounts
        for tax purposes and financial statements                 (3,306)          (5,858)          (8,654)
      Federal Home Loan Bank stock
        dividends                                                 (4,773)            --               --
      Difference from cash basis accounting
        for tax purposes and accrual basis
        accounting for financial statements                      (31,683)          92,253            7,644
      Use of different methods for computing
        net deferred loan fees for tax purposes
        and financial statements                                  (3,185)          (4,477)          (3,562)
      Deferred compensation                                      (35,544)         (21,587)         (22,964)
      Unearned compensation                                        9,675           (4,743)          (1,023)
      Other book/tax differences                                  14,342           (3,449)           2,001
                                                            ------------      -----------     ------------
          Increase (decrease) in deferred income taxes        $ (58,716)         $ 11,773         $(48,349)
                                                            ============      ===========     =============
</TABLE>


      The components of deferred tax assets and liabilities consisted of:

<TABLE>
<CAPTION>

                                                                                 September 30,
                                                                   ---------------------------------------
                                                                         1999                     2000
                                                                   ----------------           ------------
<S>                                                                <C>                        <C>
      Deferred tax assets:
        Reserve for loan losses                                    $         23,201           $     23,210
        Deferred compensation                                                91,347                114,311
        Unearned compensation                                                43,935                 44,958
                                                                   ----------------           ------------
           Total gross deferred tax assets                                  158,483                182,479
                                                                   ----------------           ------------
      Deferred tax liabilities:
        Tax depreciation in excess of book depreciation                      27,221                 29,256
        Federal Home Loan Bank stock dividends                               31,601                 31,601
        Bad debt reserves for tax purposes in excess of
          base year bad debt reserves                                       119,085                 95,268
        Cash basis conversion for tax purposes                              181,622                189,266
        Book accretion in excess of tax accretion
          on mortgage-backed security discounts                              80,560                 71,906
        Net unrealized gains on investments                                  10,371                  4,949
        Deferred loan fees                                                   45,652                 42,090
        Other                                                                 6,551                  8,552
            Total gross deferred tax liabilities                            502,663                472,888
                                                                   ----------------           ------------
               Net deferred tax liabilities                        $        344,180           $    290,409
                                                                   ================           ============
</TABLE>


                                      32
<PAGE>



                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                  Years Ended September 30, 1998, 1999 and 2000


(8)   INCOME TAXES - (CONTINUED)
      --------------------------

      In  accordance  with SFAS No. 109, a deferred tax  liability  has not been
      recognized for tax basis bad debt reserves of approximately  $1,406,992 of
      the  Association  that arose in tax years that began prior to December 31,
      1987. At September 30, 2000, the amount of the deferred tax liability that
      had not been  recognized  was  approximately  $520,587.  This deferred tax
      liability  could be  recognized  if, in the  future,  there is a change in
      federal  tax  law,  the  Association  fails to meet  the  definition  of a
      `qualified savings  institution,' as defined by the Internal Revenue Code,
      certain   distributions  are  made  with  respect  to  the  stock  of  the
      Association,  or the bad debt reserves are used for any purpose other than
      absorbing bad debts.  In August 1996,  new  legislation  was enacted which
      provided  for  the  recapture  into  taxable  income  of  certain  amounts
      previously  deducted as additions to the bad debt  reserves for income tax
      purposes.  The  Association  began changing its method of determining  bad
      debt reserves for tax purposes  during 1996.  The amounts to be recaptured
      for income tax reporting purposes are considered by the Association in the
      determination of the net deferred tax liability.

(9)   CUSTOMER DEPOSITS
      -----------------

      Deposit account balances at September 30, 1999 and 2000, are summarized as
      follows:

<TABLE>
<CAPTION>
                                                            1999                          2000
                                                --------------------------    -------------------------
                                                   Amount             %           Amount            %
                                                ------------      --------    -------------       -----
<S>                                             <C>                  <C>      <C>                   <C>
      Non-interest bearing deposits             $    961,565         1.9      $     976,633         2.0
      Interest-bearing checking accounts           8,841,425        17.1          7,818,174        16.2
      Money market accounts                        2,852,975         5.5          2,221,860         4.6
      Passbook savings                             5,668,897        11.0          5,326,473        11.0
      Certificates of deposit                     33,222,126        64.5         31,913,288        66.2
                                                ------------        ----      -------------       -----
                                                $ 51,546,988       100.0%     $  48,256,428       100.0%
                                                ============       =====      =============       ======
</TABLE>

      The  aggregate  amount of jumbo  certificates  of  deposit  with a minimum
      denomination  of $100,000 was  approximately  $3,087,014 and $2,306,281 at
      September 30, 1999 and 2000, respectively.

      At September 30, 2000 scheduled  maturities of certificates of deposit are
      as follows:


                          2001           $  26,223,356
                          2002               4,926,308
                          2003                 425,908
                          2004                 315,216
                          2005                  22,500
                                         -------------
                                         $  31,913,288
                                         =============



                                       33

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


 (10) ADVANCES FROM FEDERAL HOME LOAN BANK
      -------------------------------------

      The advances listed below were obtained from the Federal Home Loan Bank of
      Des Moines and secured by Federal Home Loan Bank stock, loans,  investment
      securities and deposit accounts.  Advances from the Federal Home Loan Bank
      at September 30, are summarized as follows:

                                                         1999            2000
                                                      -----------     ----------
109 day, 5.41% fixed, interest payable at
   maturity, matured November 1999                    $ 1,000,000     $       --
90 day, 5.42% fixed, interest payable at
   maturity, matured December 1999                      1,000,000             --
Ten year, 5.05% adjustable (FHLB DSM 1-
   year cost of funds + .20%), interest payable
   monthly, paid during year ended September 30,
   2000                                                1,000,000              --

63 day, 6.71% fixed, interest payable at
   maturity, matures October 2000                             --       1,500,000

64 day, 6.68% fixed, interest payable at
   maturity, matures October 2000                             --       1,000,000

95 day, 6.71% fixed, interest payable at
   maturity, matures October 2000                             --       1,000,000

61 day, 6.67% fixed, interest payable at
   maturity, matures November 2000                            --       1,000,000

61 day, 6.67% fixed, interest payable at
   maturity, matures November 2000                            --       1,000,000

61 day, 6.67% fixed, interest payable at
   maturity, matures November 2000                            --       1,100,000

93 day, 6.73% fixed, interest payable at
   maturity, matures November 2000                            --       1,000,000

92 day, 6.66% fixed, interest payable at
   maturity, matures December 2000                            --       1,000,000

Two year, 6.87% fixed, interest payable
   monthly, matures March 2002                                --       1,000,000

Fifteen year, 6.00% fixed, $8,439 due monthly
   including interest, matures June 2013                 946,577         900,864
Fifteen year, 5.79% fixed, $8,326 due monthly
   including interest, matures August 2013               953,153         907,227


                                       34
<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


 (10) ADVANCES FROM FEDERAL HOME LOAN BANK - (CONTINUED)
      --------------------------------------------------

<TABLE>
<CAPTION>

<S>                                                           <C>               <C>
      Fifteen year, 5.50% fixed, $8,171 due monthly
         including interest, matures September 2013                955,848            909,206

      Seventeen year, 5.99% adjustable (Reprice annually at
         FHLB-DM 1 year advance rate), interest payable
         monthly, matures November 2016                                  -            800,000
                                                              ------------      -------------
                                                              $  5,855,578      $  13,117,297
                                                              ============      =============
</TABLE>



      The  adjustable  advance shown above shall be subject to a prepayment  fee
      equal to 100 percent of the present value of the monthly lost cash flow to
      the Federal Home Loan Bank based upon the difference  between the contract
      rate on the advance and the rate on an alternative  qualifying  investment
      of the same  remaining  maturity.  The  advance  may be prepaid  without a
      prepayment  fee if the rate on an  advance  being  prepaid  is equal to or
      below the current rate for an  alternative  qualifying  investment  of the
      same  remaining  maturity.  The fifteen  year fixed rate  advances are not
      prepayable during the first five years. After five years, the advances are
      prepayable without penalty.

      Maturities of Federal Home Loan Bank advances are as follows:


                                                        Aggregate
                                                         Annual
                 Year Ended September 30               Maturities
                 -----------------------             --------------
                          2001                       $    8,746,460
                          2002                            1,155,126
                          2003                              164,305
                          2004                              174,029
                          2005                              184,328
                   Later Years                            2,693,049
                                                     --------------
                                                     $   13,117,297
                                                     ==============

(11)  EMPLOYEE BENEFITS

      The Association has established a 401(k) employee benefit plan that covers
      all  employees  meeting  specific age and length of service  requirements.
      Total expenses incurred for the plan were $10,581, $15,394 and $16,309 for
      the years ended September 30, 1998, 1999 and 2000, respectively.

      The Association has also entered into a salary continuation agreement with
      five of its  officers.  These  agreements  provide  for  monthly  deferred
      compensation payments for a period of ten years following retirement.  The
      Association   has  purchased  life   insurance   policies  to  fund  these
      agreements.  Deferred  compensation  charged to  operations  for the years
      ended September 30, 1998, 1999 and 2000 was $30,473, $32,353 and $34,348.




                                      35
<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


 (11) EMPLOYEE BENEFITS - (CONTINUED)

      Effective June 1, 1997, the  Association  adopted a deferred  compensation
      plan for outside  directors.  The benefits will vest over a period of five
      to  fifteen  years  and  the  agreements   provide  for  monthly  deferred
      compensation  payments  for a period of five years  following  retirement.
      Directors' deferred compensation charged to operations for the years ended
      September 30, 1998, 1999 and 2000 was $25,992, $25,992 and $27,716.

      The  Association  has entered into  employment  agreements with two of its
      officers for three years. On each anniversary of the commencement  date of
      the agreement, the term of the agreement may be extended for an additional
      year.  In the event of a change of control or  termination  other than for
      cause, the officers would be entitled to receive  severance  payments from
      the  Association of 2.99 times the officers'  average annual  compensation
      during the preceding five years.

      The Association established an internally-leveraged ESOP for the exclusive
      benefit  of  participating  employees  (all  salaried  employees  who have
      completed at least 1000 hours of service in a twelve-month period and have
      attained the age of 21). The loan is secured by the shares  purchased  and
      will be repaid by the  contributions to the ESOP and any other earnings on
      ESOP assets. The Association presently expects to contribute approximately
      $106,762  including  interest annually to the ESOP.  Contributions will be
      applied to repay  interest on the loan first,  then the remainder  will be
      applied to principal.  The loan is expected to be repaid in  approximately
      five years. As of September 30, 2000, the loan had an outstanding  balance
      of $393,819 and an interest rate of 9%.

      Shares purchased with the loan proceeds are held in a suspense account for
      allocation among participants as the loan is repaid.  Contributions to the
      ESOP and shares  released from the suspense  account are  allocated  among
      participants  in  proportion  to  their  compensation  relative  to  total
      compensation of all active  participants.  Benefits  generally  become 25%
      vested  after each year of credited  service  beyond one year.  Vesting is
      accelerated upon retirement, death, disability or separation from service.
      Since the Association's annual  contributions are discretionary,  benefits
      payable under the ESOP cannot be estimated.

      The  Association  accounts for its ESOP in  accordance  with  Statement of
      Position 93-6,  "Employers Accounting for Employee Stock Ownership Plans."
      Accordingly,  the debt of the ESOP is eliminated in consolidation  and the
      shares  pledged as collateral  are reported as unearned ESOP shares in the
      consolidated balance sheets. Contributions to the ESOP shall be sufficient
      to pay principal and interest  currently due under the loan agreement.  As
      shares are  committed  to be released  from  collateral,  the  Association
      reports  compensation  expense  equal to the average  market  price of the
      shares for the respective  period,  and the shares become  outstanding for
      earnings per share  computations.  Dividends on allocated  ESOP shares are
      recorded as a reduction of retained  earnings;  dividends  on  unallocated
      ESOP shares are recorded as a reduction of debt and accrued interest. ESOP
      compensation was $122,070 in 1998, $83,990 in 1999 and $85,648 in 2000.


                                       36
<PAGE>




                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(11)  EMPLOYEE BENEFITS - (CONTINUED)
      -------------------------------

      A summary of ESOP shares at September 30, 2000 is as follows:
                   Allocated shares                                 35,457
                   Shares committed for release                      8,217
                   Unreleased shares                                38,545
                                                                   -------
                     Total                                          82,219
                                                                   =======
                           Fair value of unreleased shares      $  399,904

      The Association has adopted a Management  Recognition and Development Plan
      ("MRDP") for the benefit of the  directors,  officers and employees of the
      Association.  The MRDP provides  directors,  officers and employees of the
      Company with a proprietary interest in the Company in a manner designed to
      encourage such persons to remain with the Association. The MRDP is managed
      by trustees comprised of the directors of the Company. The Plan authorizes
      the Company to grant up to 41,109  shares of the Company  stock,  of which
      37,638  shares have been  awarded as of September  30, 2000.  These shares
      represent unearned compensation and have been accounted for as a reduction
      of stockholders' equity. Such awards vest at the rate of 20% at the end of
      each  twelve  months.   Vesting  is  accelerated  upon   retirement.   The
      Association  recorded $74,074 $78,574 and $80,825 of compensation  expense
      under the MRDP in 1998, 1999 and 2000.

(12)  STOCK OPTION PLAN
      -----------------

      The company has elected to follow Accounting  Principles Board Opinion No.
      25,  "Accounting  for Stock  Issued  to  Employees"  (APB 25) and  related
      Interpretations  in accounting for its employee stock options because,  as
      discussed below, the alternative fair value accounting  provided for under
      FASB  Statement  No.  123,  "Accounting  for  Stock-Based   Compensation,"
      requires use of option valuation models that were not developed for use in
      valuing  employee stock options.  Under APB 25, because the exercise price
      of the Company's  employee  stock  options  equals the market price of the
      underlying  stock  on the  date  of  grant,  no  compensation  expense  is
      recognized.

      The Company's  1995 Stock Option and  Incentive  Plan has  authorized  the
      grant of options to management  personnel for up to 102,774  shares of the
      Company's  common stock.  All options  granted have 10 year terms and vest
      and become exercisable ratably over 5 years following date of grant.

      Pro forma  information  regarding  net  income and  earnings  per share is
      required by Statement  123, and has been  determined as if the company had
      accounted  for its employee  stock  options under the fair value method of
      that  Statement.  Stock Options were first granted  January 17, 1996.  The
      fair value for these  options was  estimated  at the date of grant using a
      Black-Scholes  option  pricing model with the  following  weighted-average
      assumptions for 1999; risk-free interest rate of 6.25%;  dividend yield of
      4.74%,  and a  weighted-average  expected  life of the option of 10 years.
      Based on historical  fluctuations of stock price, the volatility factor is
      considered zero.


                                       37
<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000

(12)  STOCK OPTION PLAN - (CONTINUED)
      -------------------------------

      The  Black-Scholes  option  valuation  model  was  developed  for  use  in
      estimating  the  fair  value  of  traded  options  which  have no  vesting
      restrictions  and are fully  transferable.  In addition,  option valuation
      models require the input of highly  subjective  assumptions  including the
      expected  stock price  volatility.  Because the Company's  employee  stock
      options have characteristics  significantly different from those of traded
      options,  and because  changes in the  subjective  input  assumptions  can
      materially affect the fair value estimate,  in management's  opinion,  the
      existing  models do not  necessarily  provide a reliable single measure of
      fair value of its employee stock options.

      For purposes of pro forma  disclosures,  the  estimated  fair value of the
      options is  amortized to expense over the  options'  vesting  period.  The
      Company's pro forma information follows:

                                       1998           1999            2000
                                    ---------      ----------      ----------

      Pro forma net income          $ 434,093      $  487,643      $  460,939
                                    =========      ==========      ==========

      Pro forma basic earnings
        per share:                  $     .63      $      .71      $      .70
                                    =========      ==========      ==========

      Pro forma diluted earnings
        per share:                  $     .61      $      .70      $      .70
                                    =========      ==========      ==========

      A summary of the  Company's  stock  option  activity,  and related
      information for the years ended September 30 follows:

<TABLE>
<CAPTION>
                                                 1998                          1999                        2000
                                      -----------------------------  -------------------------   --------------------------
                                                      Weighted-                 Weighted-                      Weighted-
                                                       Average                   Average                        Average
                                        Options     Exercise Price   Options  Exercise Price     Options     Exercise-Price
                                      ----------------------------   -------  --------------     -------     --------------
<S>                                     <C>          <C>              <C>      <C>                 <C>          <C>
      Outstanding-beginning
        of year                         76,692       $  11.01         76,692   $  11.01            80,892       $  11.02
      Granted                                -              -          4,200      11.25                 -              -
      Exercised                              -              -              -          -                 -              -
      Forfeited                              -              -              -          -                 -              -
                                      --------      ---------                  --------

      Outstanding-end of year           76,692          11.01         80,892      11.02            80,892          11.02
                                      ========      =========       ========

      Exercisable at end of
        year                            29,837          10.90         45,174      10.94            61,352          10.96

      Weighted-average fair
        value of options
        granted during the
        year                               N/A                          $.78                          N/A
</TABLE>


      Exercise  prices for options  outstanding  as of September 30, 2000 ranged
      from $10.78 to $15.53. The weighted-average  remaining contractual life of
      those options is 5.5 years.

      All  references in this note to the number of shares and per share amounts
      have been restated to reflect the 20% stock dividend during 1999.

                                      38

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(13)  EARNINGS PER SHARE
      ------------------

      The following information shows the amounts used in computing earnings per
      share and the effect on income and the weighted  average  number of shares
      of dilutive  potential  common  stock.  The amounts in the income  columns
      represent the numerator  and the amounts in the shares  columns  represent
      the denominator.

<TABLE>
<CAPTION>
                                               1998                          1999                                2000
                             --------------------------------  --------------------------------   ----------------------------------
                                                    Per Share                         Per Share                            Per Share
                                 Income      Shares    Amt.      Income      Shares      Amt.       Income        Shares     Amt.
                             -----------  ---------   ------   ---------    --------   --------   -----------    -------   -------
<S>                          <C>             <C>         <C>   <C>           <C>          <C>     <C>            <C>          <C>
      Basic EPS:
      Income available
        to Common
        Stockholders         $   454,265     689,326     0.66  $   508,226   689,768      0.74    $   481,771    653,878      0.74
                             -----------  ----------  =======  -----------   -------    ======    -----------    -------  ========

      Effect of dilutive
        securities                    -       19,896                     -     7,205                        -          -
                             -----------  ----------           -----------   -------              -----------   --------

      Diluted EPS:
      Income available to
        Stockholders plus
        stock options        $   454,265     709,222     0.64  $   508,226   696,973      0.73    $   481,771    653,878      0.74
                             ===========  ==========  =======  ===========   =======    ======    ===========    =======    ======
</TABLE>


(14)  RELATED-PARTY TRANSACTIONS
      --------------------------

      Certain employees, officers and directors are engaged in transactions with
      the   Association  in  the  ordinary   course  of  business.   It  is  the
      Association's  policy that all related party transactions are conducted at
      "arm's length" and all loans and commitments included in such transactions
      are made on  substantially  the same terms,  including  interest rates and
      collateral,  as those  prevailing at the time for comparable  transactions
      with other  customers.  A summary of the changes in  outstanding  loans to
      employees,  officers and directors for the years ended  September 30 is as
      follows:

                                          1999                  2000
                                    ----------------       ---------------
      Beginning balance             $       705,726        $      924,891
      Originations and advances             444,218               349,010
      Principal repayments                 (225,053)             (152,180)
                                    ---------------        --------------
      Ending balance                $       924,891        $    1,121,721
                                    ===============        ==============

      Crawford  Mortgage,  Inc. leases office  facilities from an officer of the
      corporation on a  month-to-month  basis.  Current  monthly rent is $1,200.
      Rent charged to operations  for the years ended  September 30, 1998,  1999
      and 2000 was $18,000, $17,700 and $14,400, respectively.



                                       39

<PAGE>

                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(15)  COMMITMENTS AND CONTINGENCIES
      -----------------------------

      In  the  ordinary   course  of  business,   the  Association  has  various
      outstanding  commitments  that  are  not  reflected  in  the  accompanying
      consolidated  financial  statements.  Since  some of the  commitments  are
      expected to expire without being drawn upon, the total commitment  amounts
      do not  necessarily  represent  future cash  requirements.  The  principal
      commitments of the Association are as follows:

      Loan  Commitments - The Association had  outstanding  firm  commitments to
      originate  variable  rate real estate loans in the amount of $2,741,365 at
      September 30, 2000.

(16)  ADVERTISING COSTS
      -----------------

      The Company incurred $42,423,  $47,935 and $54,124 in non-direct  response
      advertising  costs during the years ended  September  30,  1998,  1999 and
      2000,  respectively.  The Company incurred no direct response  advertising
      costs during the three years.

(17)  REGULATORY CAPITAL REQUIREMENTS
      -------------------------------

      The  Association  is subject to various  regulatory  capital  requirements
      administered  by its  primary  federal  regulator,  the  Office  of Thrift
      Supervision  ("OTS").  Failure  to meet  the  minimum  regulatory  capital
      requirements  can initiate  certain  mandatory,  and  possible  additional
      discretionary  actions by  regulators,  that if  undertaken,  could have a
      direct material affect on the Association and the  consolidated  financial
      statements.  Under the  regulatory  capital  adequacy  guidelines  and the
      regulatory  framework for prompt corrective  action,  the Association must
      meet specific capital guidelines  involving  quantitative  measures of the
      Association's assets, liabilities,  and certain off-balance-sheet items as
      calculated  under  regulatory  accounting  practices.   The  Association's
      capital  amounts and  classification  under the prompt  corrective  action
      guidelines  are also subject to  qualitative  judgements by the regulators
      about components, risk weightings, and other factors.

      Quantitative measures established by regulation to ensure capital adequacy
      require the Association to maintain  minimum amounts and ratios (set forth
      in the table  below) of total  risk-based  capital  and Tier 1 capital  to
      risk-weighted  assets ( as defined in the regulations),  Tier 1 capital to
      adjusted total assets (as defined), and tangible capital to adjusted total
      assets (as defined).  Management believes,  as of September 30, 2000, that
      the  Association  meets all capital  adequacy  requirements to which it is
      subject.


                                       40

<PAGE>

                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(17)  REGULATORY CAPITAL REQUIREMENTS - (CONTINUED)
      ---------------------------------------------

      As of September 30, 2000, the most recent  notification  from the OTS, the
      Association  was categorized as  well-capitalized  under the framework for
      prompt  corrective  action.  To be  categorized as  well-capitalized,  the
      Association must maintain minimum total risk-based, Tier 1 risk-based, and
      core  capital  leverage  ratios  as set forth in the  table.  There are no
      conditions or events since that notification that management believes have
      changed the institution's category.

      The Association's  actual capital amounts and ratios are also presented in
      the table. Dollar amounts are expressed in thousands.

<TABLE>
<CAPTION>

                                                    Actual
                                            -------------------
                                            Amount        Ratio
                                            ------       ------
<S>                                      <C>               <C>
      As of September 30, 1999:
        Total Risk-Based Capital
          (to Risk-Weighted Assets)      $  9,219          29.9%
        Core Capital
          (to Adjusted Tangible Assets)     9,156          13.3%
        Tangible Capital
          (to Tangible Assets)              9,156          13.3%
        Tier 1 Capital
          (to Risk-Weighted Assets)         9,156          29.7%

      As of September 30, 2000:
        Total Risk-Based Capital
          (to Risk-Weighted Assets)         8,964          27.5%
        Core Capital
          (to Adjusted Tangible Assets)     8,901          12.3%
        Tangible Capital
          (to Tangible Assets)              8,901          12.3%
        Tier 1 Capital
          (to Risk-Weighted Assets)         8,901          27.3%
</TABLE>

<TABLE>
<CAPTION>
                                                                          For Capital
                                                                       Adequacy Purposes
                                           -------------------------------------------------------------------------
                                                                         Amount                                Ratio
                                                                       ---------                               -----
<S>                                        <C>                         <C>          <C>                          <C>
      As of September 30, 1999:
        Total Risk-Based Capital
          (to Risk-Weighted Assets)        greater than or equal to    $  2,467     greater than or equal to     8.0%
        Core Capital
          (to Adjusted Tangible Assets)    greater than or equal to       2,749     greater than or equal to     4.0%
        Tangible Capital
          (to Tangible Assets)             greater than or equal to       1,031     greater than or equal to     1.5%
        Tier 1 Capital
          (to Risk-Weighted Assets)                        N/A

      As of September 30, 2000:
        Total Risk-Based Capital
          (to Risk-Weighted Assets)        greater than or equal to       2,611     greater than or equal to     8.0%
        Core Capital
          (to Adjusted Tangible Assets)    greater than or equal to       2,887     greater than or equal to     4.0%
        Tangible Capital
          (to Tangible Assets)             greater than or equal to       1,083     greater than or equal to     1.5%
        Tier 1 Capital
          (to Risk-Weighted Assets)                        N/A
</TABLE>

<TABLE>
<CAPTION>

                                                                       Prompt Corrective
                                                                       Action Provisions
                                           ---------------------------------------------------------------------------
                                                                           Amount                               Ratio
                                                                          -------                               ------
<S>                                        <C>                          <C>         <C>                          <C>
      As of September 30, 1999:
        Total Risk-Based Capital
          (to Risk-Weighted Assets)        greater than or equal to     $  3,083    greater than or equal to     10.0%
        Core Capital
          (to Adjusted Tangible Assets)    greater than or equal to        3,436    greater than or equal to      5.0%
        Tangible Capital
          (to Tangible Assets)                             N/A
        Tier 1 Capital
          (to Risk-Weighted Assets)        greater than or equal to        1,850    greater than or equal to      6.0%

      As of September 30, 2000:
        Total Risk-Based Capital
          (to Risk-Weighted Assets)        greater than or equal to        3,264    greater than or equal to     10.0%
        Core Capital
          (to Adjusted Tangible Assets)    greater than or equal to        3,609    greater than or equal to      5.0%
        Tangible Capital
          (to Tangible Assets)                             N/A
        Tier 1 Capital
          (to Risk-Weighted Assets)                                        1,958    greater than or equal to      6.0%
</TABLE>




(18)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
      -----------------------------------------------------

      The following methods and assumptions were used to estimate the fair value
      of each class of financial instruments:

      Cash  and  cash  equivalents  and  certificates  of  deposit  - For  these
      short-term instruments, the carrying amount approximates fair value.


                                       41

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(18)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - (CONTINUED)
      -------------------------------------------------------------------

      Available-for-sale  and  held-to-maturity  securities  - Fair  values  for
      investment securities equal quoted market prices, if available.  If quoted
      market prices are not available, fair values are estimated based on quoted
      market prices of similar securities.

      Loans held for sale - These  instruments  are carried in the  consolidated
      statements of financial  condition at the lower of cost or fair value. The
      fair  values  of these  instruments  are based on  subsequent  liquidation
      values of the instruments which did not result in any significant gains or
      losses.

      Loans receivable - The fair value of loans is estimated by discounting the
      future cash flows using the current  rates at which similar loans would be
      made to borrowers  with similar  credit ratings and for the same remaining
      maturities. Loans with similar characteristics are aggregated for purposes
      of the  calculations.  The carrying value of accrued  interest  receivable
      approximates its fair value.

      Investment in FHLB stock - Fair value of the  Association's  investment in
      FHLB stock  approximates  the carrying value as no ready market exists for
      this  investment and the stock could only be sold back to the Federal Home
      Loan Bank.

      Deposits  - The fair  value  of  demand  deposits,  savings  accounts  and
      interest-bearing  demand  deposits is the amount  payable on demand at the
      reporting  date  (i.e.,   their  carrying  amount).   The  fair  value  of
      fixed-maturity  time  deposits is estimated  using a discounted  cash flow
      calculation  that  applies the rates  currently  offered  for  deposits of
      similar remaining maturities.

      Federal  Home  Loan  Bank  advances  - Rates  currently  available  to the
      Association  for advances with similar terms and remaining  maturities are
      used to estimate fair value of existing advances.

      Advances from  borrowers  for taxes and  insurance - For these  short-term
      liabilities, the carrying value approximates fair value.

      Commitments to extend credit,  letters of credit and lines of credit - The
      fair value of commitments is estimated using the fees currently charged to
      enter into similar agreements,  taking into account the remaining terms of
      the agreements and the present  credit  worthiness of the  counterparties.
      For fixed-rate loan commitments,  fair value also considers the difference
      between current levels of interest rates and the committed rates. The fair
      value of letters of credit and lines of credit is based on fees  currently
      charged for similar  agreements or on the  estimated  cost to terminate or
      otherwise  settle the obligations  with the  counterparts at the reporting
      date.

                                       42
<PAGE>




                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                  Years Ended September 30, 1998, 1999 and 2000


(18)   DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - (CONTINUED)
       -------------------------------------------------------------------

      The  following  table  presents  estimated  fair  values of the  Company's
      financial  instruments.  The fair  values of certain of these  instruments
      were  calculated  by  discounted   expected  cash  flows,  which  involves
      significant  judgments by management and uncertainties.  Fair value is the
      estimated  amount  at  which  financial  assets  or  liabilities  could be
      exchanged in a current transaction between willing parties,  other than in
      a forced or  liquidation  sale.  Because no market  exists for  certain of
      these financial instruments and because management does not intend to sell
      these  financial  instruments,  the Company does not know whether the fair
      values  shown below  represent  values at which the  respective  financial
      instruments could be sold individually or in the aggregate.

<TABLE>
<CAPTION>
                                                      September 30, 1999                   September 30, 2000
                                                --------------------------------       -----------------------------
                                                   Carrying             Fair             Carrying           Fair
                                                    Amount             Value              Amount            Value
                                                --------------------------------       -----------------------------
<S>                                              <C>                <C>                <C>                <C>
      Financial assets:
  Cash and cash equivalents                      $ 2,316,542        $ 2,316,542        $ 2,981,902        $ 2,981,902
  Certificates of deposit                          1,664,000          1,664,000             80,000             80,000
  Available-for-sale securities                      183,031            183,031            173,375            173,375
  Held-to-maturity securities                     20,028,363         19,540,819         19,638,443         19,242,915
  Investment in FHLB stock                           365,400            365,400            657,100            657,100
  Held-to-maturity mortgage-backed
    securities                                     2,483,912          2,525,001          2,906,678          2,924,243
  Loans held for sale                                 79,262             82,977            386,292            390,846
  Loans, net of allowance for loan losses         40,090,543         39,883,000         44,090,649         43,526,000
  Accrued interest receivable                        513,563            513,563            560,413            560,413
Financial liabilities:
  Deposits                                        51,546,988         51,125,000         48,256,428         48,115,000
  Federal Home Loan Bank advances                  5,855,578          5,492,000         13,117,297         12,828,000
  Advances from borrowers for taxes
    and insurance                                    354,010            354,010            378,578            378,578
Unrecognized financial instruments
   (net of contract amount):
    Commitments to extend credit                          --                 --                 --                 --
    Letters of credit                                     --                 --                 --                 --
    Unused lines of credit                                --                 --                 --                 --
</TABLE>

                                       43

<PAGE>




                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(19)  PARENT COMPANY ONLY FINANCIAL INFORMATION

      The following  condensed  statements of financial  condition and condensed
      statements of income and cash flows for NS&L Bancorp,  Inc. should be read
      in  conjunction  with the  consolidated  financial  statements  and  notes
      thereto.

                   Condensed Statements of Financial Condition
<TABLE>
<CAPTION>
                                                                       September 30,
                                                              ------------------------------
                                ASSETS                            1999              2000
                                ------                        ------------      ------------
<S>                                                           <C>               <C>
Cash                                                          $    513,404      $    304,091
Certificates of deposit                                             80,000            80,000
Investment securities available-for-sale, at fair value            183,031           173,375
Investment in subsidiary                                         9,234,425         8,975,770
Loan to ESOP                                                       459,248           393,819
Land                                                               302,865           302,865
Other assets                                                        13,120             5,827
                                                              -------------    -------------
    Total assets                                              $ 10,786,093      $ 10,235,747
                                                              =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                                              $         98      $        399
Deferred income taxes, net                                          10,836             5,413
Dividends payable                                                  118,699           106,381
Stockholders' equity                                            10,656,460        10,123,554
                                                              ------------------------------
    Total liabilities and stockholders' equity                $ 10,786,093     $  10,235,747
                                                              ==============================
</TABLE>


                 Condensed Statements of Income
<TABLE>
<CAPTION>

                                           Year Ended         Year Ended            Year Ended
                                          September 30,      September 30,         September 30,
                                              1998               1999                  2000
                                          -------------      -------------         ------------
<S>                                            <C>              <C>                   <C>
      Income:
       Equity in earnings of subsidiary        $421,452         $500,298              $472,397
       Interest income                           61,140           50,675                46,282
       Dividend income                            6,916            8,856                 8,530
       Gain on sale of investments               18,125               --                    --
       Other income                                 715               --                    --
                                          -------------      -------------         ------------
         Total income                           508,348          559,829               527,209
                                          -------------      -------------         ------------

      Expenses:
       Professional fees                         15,304           22,456                20,381
       Other                                     25,824           28,385                23,231
       Income tax                                12,955              762                 1,826
                                          -------------      -------------         ------------
         Total expenses                          54,083           51,603                45,438
                                          -------------      -------------         ------------
           Net income                          $454,265         $508,226              $481,771
                                          =============      =============         ============
</TABLE>

                                       44

<PAGE>


                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  Years Ended September 30, 1998, 1999 and 2000


(19)  PARENT COMPANY ONLY FINANCIAL INFORMATION - (CONTINUED)
      -------------------------------------------------------

                       Condensed Statements of Cash Flows

<TABLE>
<CAPTION>


                                                      Year Ended          Year Ended        Year Ended
                                                     September 30,       September 30,     September 30,
                                                         1998                1999              2000
                                                     -------------       -------------     -------------
<S>                                                  <C>                 <C>               <C>
      Cash flows from operating activities:
        Net income                                   $   454,265         $ 508,226         $   481,771
        Adjustments to reconcile net income
          to net cash provided by operating
          activities:
            Equity in earnings of subsidiary            (421,452)         (500,298)           (472,397)
            Gain on sale of investments                  (18,125)               --                  --
            Net change in operating accounts:
              Deferred income taxes, net                     815                --                  --
              Other assets                                13,979            (1,784)              7,292
              Liabilities                                (17,111)             (582)                301
                                                     -----------         ---------         -----------
                Net cash from
                  operating activities                    12,371             5,562              16,967
                                                     -----------         ---------         -----------

      Cash flows from investing activities:
        Dividends from subsidiary                      1,000,000                --             950,000
        Receipt of principal payment on
          ESOP loan                                       20,907            16,502              12,953
        Purchase of investment securities                     --                --              (5,000)
        Proceeds from sales of investments                43,125                --                  --
        Net change in certificates of deposit             99,000                --                  --
                                                     -----------         ---------         -----------
          Net cash from investing activities           1,163,032            16,502             957,953
                                                     -----------         ---------         -----------

      Cash flows from financing activities:
        Cash dividends paid                             (311,963)         (350,012)           (399,266)
        Purchase of treasury stock                    (1,746,051)          (14,237)           (784,967)
                                                     -----------         ---------         -----------
          Net cash used in financing
            activities                                (2,058,014)         (364,249)         (1,184,233)
                                                     -----------         ---------         -----------
      Net decrease in cash and
          cash equivalents                              (882,611)         (342,185)           (209,313)

      Cash and cash equivalents at
          beginning of period                          1,738,200           855,589             513,404
                                                     -----------         ---------         -----------

      Cash and cash equivalents at
          end of period                              $   855,589         $ 513,404         $   304,091
                                                     ===========         =========         ===========
</TABLE>


                                       45

<PAGE>


                            COMMON STOCK INFORMATION

         The common stock of NS&L  Bancorp,  Inc. is traded on the NASDAQ (Small
Cap) Stock Market under the symbol "NSLB".  As of November 27, 2000,  there were
252  stockholders  of record  and  661,882  shares of common  stock  outstanding
(including  unreleased ESOP shares of 38,545).  This does not reflect the number
of persons or entities who hold stock in nominee or "street name".  On September
20, 2000, the Company  declared a $.16 common stock dividend payable October 31,
2000 to  stockholders  of record on October 16, 2000.  Dividend  payments by the
Company are  dependent  primarily on dividends  received by the Company from the
Association. Under Federal regulations, the dollar amount of dividends a savings
and  loan  association  may pay is  dependent  upon  the  association's  capital
position  and recent net income.  Generally,  if an  association  satisfies  its
regulatory capital requirements,  it may make dividend payments up to the limits
prescribed in the OTS regulations.  However, institutions that have converted to
stock form of ownership may not declare or pay a dividend on, or repurchase  any
of, its common stock if the effect thereof would cause the regulatory capital of
the  institution  to be reduced  below the amount  required for the  liquidation
account which was  established in accordance  with the OTS  regulations  and the
Association's  Plan of Conversion.  There are also certain dividend  limitations
applicable to the Company under Missouri law.

The  following  table sets forth market price and dividend  information  for the
Company's common stock.  Share price and dividend  information has been adjusted
for the first two  quarters  of 1999 to reflect the 20% stock  dividend  paid in
April 1999.

                           Fiscal 1999                      Fiscal 2000
                           -----------                      -----------

                      High     Low    Dividend       High      Low    Dividend
                      ----     ---    --------       ----      ---    --------

First Quarter        $12.50  $10.42    $0.133        $11.50   $10.00    $0.16

Second Quarter       $13.54  $11.25    $0.133        $11.75   $ 9.88    $0.16

Third Quarter        $15.00  $12.75    $0.16         $10.75   $10.00    $0.16

Fourth Quarter       $12.88  $11.50    $0.16         $10.50   $10.00    $0.16


                                       46

<PAGE>

                             DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>
NS&L BANCORP, INC.                          NEOSHO SAVINGS AND
                                            LOAN ASSOCIATION, F.A.

DIRECTORS:                                  DIRECTORS:
<S>                                         <C>
George A. Henry                             George A. Henry
Chairman of the Board                       Chairman of the Board
NS&L Bancorp, Inc.                          Neosho Savings and Loan Association, F.A.

C.R. 'Rick' Butler                          C.R. 'Rick' Butler
President and Chief Executive Officer       President

NS&L Bancorp, Inc.                          Neosho Savings and Loan Association, F.A.

Jon C. Genisio                              Jon C. Genisio
Owner                                       Owner
Jon's Pharmacy, Inc.                        Jon's Pharmacy, Inc.

John D. Mills                               John D. Mills
President                                   President
Mills Park Centre Furniture & Appliance     Mills Park Centre Furniture &Appliance

Ralph J. Haas                               Ralph J. Haas
President                                   President
Haas Warehousing, Inc.                      Haas Warehousing, Inc.

Robert J. Johnson                           Robert J. Johnson
Retired Insurance Agent                     Retired Insurance Agent

Larry Neff                                  Larry Neff
President                                   President
Red Carpet Enterprises, Inc.                Red Carpet Enterprises, Inc.

OFFICERS:                                   OFFICERS:

George A. Henry                             George A. Henry
Chairman of the Board                       Chairman of the Board

C.R. 'Rick' Butler                          C.R. 'Rick' Butler
President and Director                      President and Director

Dorothy A. LaDue                            Dorothy A. LaDue
Senior Vice President and Secretary         Senior Vice President and Secretary

Carol A. Guest                              Stephen M. Kelly
Treasurer                                   Senior Vice President

                                            Carol A. Guest
                                            Vice President and Treasurer

                                            Greg Crawford
                                            Vice President
</TABLE>

                                       47

<PAGE>


                                            CORPORATE INFORMATION

CORPORATE HEADQUARTERS                      TRANSFER AGENT

111 East Main Street                        Registrar and Transfer Co.
Neosho, Missouri                            10 Commerce Drive
                                            Cranford, New Jersey  07016
INDEPENDENT AUDITORS                        (800) 866-1340

Kirkpatrick, Phillips & Miller, CPAs, P.C.  COMMON STOCK
Springfield, Missouri

                                            Traded Nasdaq Small Cap Market
GENERAL COUNSEL
                                            Nasdaq Symbol:  NSLB
Sims, Johnson & Wood
Neosho, Missouri

SPECIAL COUNSEL

Muldoon, Murphy & Faucette, LLP
Washington, D.C.





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

ANNUAL MEETING

         The Annual Meeting of Stockholders will be held Wednesday,  January 17,
2001, at 3:00 p.m.,  Central  Time,  at the branch office of Neosho  Savings and
Loan Association, F.A 713 Neosho Boulevard, Neosho, Missouri.

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

A COPY OF THE COMPANY'S  FORM 10-KSB AS FILED WITH THE  SECURITIES  AND EXCHANGE
COMMISSION  WILL BE FURNISHED  WITHOUT CHARGE TO  STOCKHOLDERS  AS OF THE RECORD
DATE FOR VOTING AT THE ANNUAL MEETING OF  STOCKHOLDERS  UPON WRITTEN  REQUEST TO
THE SECRETARY, NS&L BANCORP, INC., 111 EAST MAIN STREET, NEOSHO, MISSOURI 64850.


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