<PAGE>
 
                                                                      EXHIBIT 13


                              1998 ANNUAL REPORT





                            [PICTURE APPEARS HERE]





                              NS&L BANCORP, INC.
<PAGE>
 
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                          Page
                                                          ----
     <S>                                                  <C>
     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                               49
     Directors and Officers                                 50
     Corporate Information                                  51
</TABLE>
<PAGE>
 
NSL BANCORP, INC.



President's Message
To Our Stockholders:


On behalf of the 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 third Annual Report as a public company.

During the fiscal year ending September 30, 1998 the Company's stock traded in a
range from $15.359 to $19.50 per share closing out the year at $15.359 per
share.  To date, and in accordance with the Company's repurchase plan, we have
repurchased a total of 273,759 shares (31% of the shares issued) at an average
cost of $15.40 per share. Total shares outstanding as of September 30, 1998 were
616,839. Operating and financial results remained substantially the same as last
fiscal year. The return on average assets was .75%, with a return on average
equity of 4.01%. We are pleased to report that the Association reported a 5.9%
growth in total assets and an increase in earnings per share of 16.1%. Loan
originations also increased significantly from $6.6 million last fiscal year to
$11.2 million for the fiscal year ending September 30, 1998.

We continue to be excited about the future and we remain firm in our pledge to
be a community oriented financial institution with a commitment to provide
affordable financial services and products to our customers and the communities
we serve.  As we grow and build on our strengths we continue to acknowledge and
accept our responsibility to you, the stockholder, to set goals and develop long
term strategies to increase profitability with minimal risk that will enhance
stockholder value.

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 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. During June 1995, the
Company became the holding company for the Association. The Company is primarily
in the business of directing, planning and coordinating the business activities
of the Association. Since the Company had not commenced operations prior to the
mutual to stock conversion of the Association during June 1995, the financial
information presented for the periods prior to 1995 is that of the Association.
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,
                                              -------------------------------------------------------------
                                                    1994        1995        1996         1997        1998
                                                    ----        ----        ----         ----        ----
FINANCIAL CONDITION DATA:                                             (In Thousands)
<S>                                                <C>         <C>         <C>          <C>         <C>         
Total assets................................       $50,995     $58,758     $61,807      $59,817     $63,367
Loans receivable, net.(1)...................        24,873      25,933      31,051       33,878      37,506
Mortgage-backed securities..................         5,481       5,871       5,342        4,473       3,121
Cash, interest bearing deposits
 and investment securities..................        19,196      25,374      23,930       19,638      21,028
Customer deposits...........................        44,196      44,088      48,444       43,892      47,944
Advances from Federal Home Loan Bank........            --          --          --        3,000       3,986
Stockholders' equity........................         6,006      13,729      12,179       11,824      10,405

                                                            For the Years Ended September 30,
                                              --------------------------------------------------------------
                                                     1994        1995        1996         1997        1998
                                                     ----        ----        ----         ----        ----
                                                                (In Thousands, except per share data)
OPERATING DATA:
Interest income.............................       $ 3,149     $ 3,284     $ 3,703      $ 3,906     $ 4,053
Interest expense............................         1,469       1,649       1,873        2,065        2150
                                              ----------------------------------------------------------------

Net interest income.........................         1,680       1,635       1,830        1,841       1,903   
 Provision for loan losses..................            --           8           3            2           8
                                              ----------------------------------------------------------------

Net interest income after
 provision for loan losses..................         1,680       1,627       1,827        1,839       1,895
Noninterest income..........................           185         208         265          235         424
Noninterest expense.........................         1,065       1,141       1,613        1,372        1601
                                              ----------------------------------------------------------------

Income before  taxes and cumulative
 effect of change in accounting principle...           800         694         479          702         718
Income taxes................................           281         212         152          246         264
                                              ----------------------------------------------------------------
Income before cumulative effect of
 change in accounting principle.............           519         482         327          456         454
Cumulative effect of change in
 accounting principle.(2)...................           (67)         --          --           --          --
                                              ----------------------------------------------------------------

Net income..................................       $   452     $   482     $   327      $   456     $   454
                                              ================================================================
Basic earnings per share....................            *      $   .61     $   .42      $   .68     $   .79
                                                               ===============================================
Diluted earnings per share..................            *      $   .61     $   .42      $   .67     $   .77
                                                               ===============================================
Dividends per share.........................            *      $   .10     $  .475      $   .50     $   .50
                                                               ===============================================
</TABLE> 

*Operating as a mutual

                                       3

<PAGE>

<TABLE> 
<CAPTION> 
                                                                    At September 30,
                                              ------------------------------------------------------------
                                                     1994        1995        1996         1997        1998
                                                     ----        ----        ----         ----        ----
OTHER DATA:
<S>                                                 <C>         <C>         <C>          <C>         <C> 
Number of:
 Real estate loans outstanding................        888         889         911          948         956
 Deposit accounts.............................      9,104       8,828       8,830        8,960       9,394
 Full service offices.........................          2           2           2            2           2

                                                        At or For the Years Ended September 30,
                                              ------------------------------------------------------------
                                                     1994        1995        1996         1997        1998
                                                     ----        ----        ----         ----        ----
KEY OPERATING RATIOS:
Return on average assets (net income
 divided by average assets)...................        .86%(3)     .91%        .57%         .78%        .75%
Return on average equity (net income
 divided by average equity)...................       7.76(3)     5.57        2.43         3.83        4.01
Average equity to average assets..............      11.11       16.40       23.34        20.27       18.71
Interest rate spread (difference
 between average yield on interest-
 earning assets and average cost of
 interest-bearing liabilities)................       3.01        2.66        2.23         2.31        2.38
Net interest margin (net interest
 income as a percentage of average
interest-earning assets)......................       3.32        3.23        3.26         3.22        3.23
Noninterest expense to average
 assets.......................................       2.03        2.16        2.80         2.34        2.64
Average interest-earning assets
 to interest-bearing liabilities..............        111         118         131          125         123
Allowance for loan losses to total
 loans at end of period.......................        .12         .15         .13          .13         .14
Net charge-offs to average
 outstanding loans during the period....               --          --          --           --          --
Ratio of non-performing assets to
 total assets.................................        .12         .15         .04          .03         .09
Dividend payout ratio.(4).....................        N/A       16.39      113.10        73.53       63.29
</TABLE> 

______________________________________________
(1) Includes loans held for sale.
(2) Reflects effect of adoption of Statement of Financial Accounting
    Standard("SFAS") No. 109, "Accounting for Income Taxes."
(3) Based on net income after cumulative effect of change in accounting
    principle. 
(4) 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 94.5%, 94.6% and 92.5% of total loans at September
30, 1996, 1997 and 1998, respectively.

     Maintaining Asset Quality.  The Association strongly emphasizes maintaining
     --------------------------                                                 
asset quality through sound underwriting, constant monitoring and effective
collection techniques.  As of September 30, 1998, the Association's ratio of
non-performing assets to total assets was .09%.  That same ratio as of September
30, 1997 was .03%.  There were no loan losses, net of recoveries, for the years
ended September 30, 1997 and 1998.

     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, 1998, 73.33% of the Association's loan portfolio was composed of
adjustable-rate loans.

     Maintaining a High Level of Liquidity.  At September 30, 1998, the
     --------------------------------------                            
liquidity ratio of the Association was 40.1%.  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, 1997 AND 1998
-------------------------------------------------------------------------------

     GENERAL.  Net income remained relatively stable with a decrease of $2,000,
or .4% from $456,000 at September 30, 1997 to $454,000 at September 30, 1998.
However, as a result of having fewer shares outstanding, net income per share
rose to $.77 (diluted) from $.67 (diluted).  Interest income increased $147,000
which was partly offset by an increase in interest expense of $85,000.
Noninterest income increased $189,000 which was offset by an increase in
noninterest expense of $229,000.  Income taxes increased $18,000.  The
Association's net interest margin increased from 3.22% for the fiscal year ended
September 30, 1997 to 3.23% for the fiscal year ended September 30, 1998.

     NET INTEREST INCOME.  Net interest income increased $62,000, or 3.4%, from
$1,841,000 for the fiscal year ended September 30, 1997 to $1,903,000 at
September 30, 1998.  Net interest income increased as a result of an increase in
interest income of $147,000 that was partially offset by a increase in interest
expense of $85,000.

     INTEREST INCOME.  Total interest income increased $147,000, or 3.8%, from
$3,906,000 for the year ended September 30, 1997 to $4,053,000 for the year
ended September 30, 1998.  Interest income from loans receivable increased
$304,000 primarily as a result of an increase in the average balance of loans
receivable of $3,741,000 from $32,416,000 in 1997 to $36,157,000 in 1998.  Loan
balances increased as a result of a more aggressive approach to solicitation and
pricing of mortgage loans.  Income from investment securities decreased by
$207,000 due to a decrease in the average balance of those securities.  Interest
income from mortgage-backed securities decreased by $64,000 as the average
balance of mortgage-backed securities decreased from $4,951,000 in 1997 to
$3,742,000 in 1998.  Balances in mortgage-backed securities and other
investments decreased as more emphasis was placed on originating mortgage loans.
An increase in the average balances of the daily interest-bearing assets
increased other interest income $113,000, despite a decrease in average rates
from 4.40% in 1997 to 4.29% in 1998.

     INTEREST EXPENSE.  Interest expense on customer deposits increased
$144,000, or 7.6%, from $1,912,000 for the year ended September 30, 1997 to
$2,056,000 for the year ended September 30, 1998.  The increase was due to an
increase of $3.498,000 in the average balance of interest bearing deposits from
$42,620,000 for the year ended September 30, 1997 to $46,118,000 for the year
ended September 30, 1998.  Interest on advances from Federal Home Loan Bank of
Des Moines decreased $59,000 from $153,000 for the year ending September 30,
1997 compared to $94,000 for the year ending September 30, 1998.  The decrease
resulted from a decrease in the average balance of advances of $1.336,000 during
1998.

     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 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

                                       6
<PAGE>
 
$8,000 for the year ended September 30, 1998.  This is an increase of $6,000
from the year ended September 30, 1997.  There were no actual loan losses, net
of recoveries, for the fiscal years ended September 30, 1997 and 1998.

     NONINTEREST INCOME.  Noninterest income increased $189,000, or 80% from
$235,000 for the fiscal year ended September 30, 1997 to $424,000 for the year
ended September 30, 1998.  The increase resulted primarily from mortgage banking
fees received from Crawford Mortgage, Inc., a subsidiary of the Association
acquired in August of 1997.

     NONINTEREST EXPENSE.  Noninterest expense increased $229,000, or 16.7% from
$1,372,000 for the fiscal year ended September 30, 1997 to $1,601,000 for the
year ended September 30, 1998.  Compensation expense and employee benefits
increased $156,000 as a result of additional personnel required in the operation
of Crawford Mortgage, Inc. as well as annual salary increases and additional
expenses of the benefit programs of the Employee Stock Option Plan (ESOP) and
the Management Recognition and Development Plan (MRDP).  Occupancy and equipment
expense increased $36,000, or 23.5% from $153,000 at September 30, 1997 to
$189,000 at September 30, 12998, while professional fees decreased $10,000 for
1998 compared to the 1997 year end.  In addition other operating expenses
increased $47,000 as a result of normal operations of the Company.

     INCOME TAXES.  Provision for income tax expense increased $18,000, or 7.3%
from $246,000 for the fiscal year ended September 30, 1997 to $264,000 for the
year ended September 30, 1998 as a result of higher taxable income.


COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED SEPTEMBER 30, 1996 AND 1997
-------------------------------------------------------------------------------

     GENERAL.  Net income increased $129,000, or 39.4% from $327,000 at
September 30, 1996 to $456,000 at September 30, 1997.  The decrease is primarily
attributable to a one-time industry-wide FDIC Special Assessment of $281,000 at
September 30, 1996 to recapitalize the Savings Association Insurance Fund.
Interest income increased $203,000 which was partly offset by an increase in
interest expense of $192,000.  Noninterest income decreased $30,000 primarily as
a result of a decrease on gains on sales of securities by the Company in the
year ended September 30, 1996.  Compensation expense increased $83,000 as a
result of the MRDP, which was adopted in January 1996, and ESOP expense as well
as annual salary increases.  The Association's net interest margin decreased
from 3.26% for the year ended September 30, 1996 to 3.22% for the year ended
September 30, 1997.

     NET INTEREST INCOME.  Net interest income increased $11,000, or .6% from
$1,830,000 at September 30, 1996 to $1,841,000 at September 30, 1997.  The
increase in net interest income resulted from an increase in interest income of
$203,000 and was partially offset by an increase in interest expense of
$192,000.

     INTEREST INCOME.  Total interest income increased by $203,000, or 5.5% from
$3,703,000 at September 30, 1996 to $3,906,000 at September 30, 1997.  Interest
income from loans receivable increased $322,000 primarily as a result of an
increase in the average balance of loans receivable from 1996 to 1997 of
$3,575,000.  Income from investment securities increased by $137,000 due to an
increase in the average balance of those securities.  Interest income from
mortgage-backed securities decreased by $64,000 as the average balance of
mortgage-backed securities decreased from $5,645,000 in 1996 to $4,951,000 in
1997.  Income from other interest-bearing assets decreased by $192,000 due to a
decrease in the average balances and on the yields earned on interest-bearing
assets from 4.96% in 1996 to 4.40% in 1997.

                                       7
<PAGE>
 
     INTEREST EXPENSE.  Interest expense on customer deposits increased by
$40,000, or 2.1% from $1,873,000 at September 30, 1996 to $1,913,000 at
September 30, 1997.  This increase was due to the average rate paid on deposits
increasing from 4.36% in 1996 to 4.49% in 1997.  This increase in rate was
partially offset by a decrease in the average balance of deposits between the
two years.  The Company began using advances from Federal Home Loan Bank of Des
Moines in 1997, which accounted for $153,000 in additional interest expense for
the year ending September 30,1 997.

     PROVISION FOR LOAN LOSSES. The provision for loan losses was $2,000 for the
year ended September 30, 1997.  This is a decrease of $1,000 over the year ended
September 30, 1996.  There were no actual loan losses, net of recoveries, for
the fiscal years ended September 30, 1996 and 1997.

     NONINTEREST INCOME.  Noninterest income decreased by $30,000, or 11.3% from
$265,000 at September 30, 1996 to $235,000 at September 30, 1997.  The decrease
was primarily from gains on sales of investments of $77,000 in 1996 compared to
a $37,000 gain in 1997.  Other income decreased $22,000 as a result of a one-
time sale of assets received from the data center in 1996.  This was partially
offset by a $33,000 increase in mortgage banking fees from Crawford Mortgage,
Inc.

     NONINTEREST EXPENSE.  Noninterest expense decreased $241,000, or 14.9% from
$1,613,000 at September 30, 1996 to $1,372,000 at September 30, 1997.  This
decrease resulted primarily from the one-time FDIC special assessment of
$281,000 in 1996.  This decrease was offset by increases in compensation and
employee benefits of $83,000, or 11.8%.  The ESOP expense was $104,000 for the
year ended September 30, 1997 compared to $87,000 for the year ended September
30, 1996.  In addition, the MRDP expense was $58,000 for the year ended
September 30, 1996 compared to $74,000 for the year ended September 30, 1997.
Other expenses also increased $9,000 from 1996 to 1997.

     INCOME TAXES.  Provision for income tax expense increased $94,000, or 61.8%
from $152,000 at September 30, 1996 to $246,000 at September 30, 1997 as a
result of higher taxable income and the repeal of the percentage of taxable
income special bad debt deduction.


FINANCIAL CONDITION
-------------------

     GENERAL.  During the year ended September 30, 1998, 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 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.  The Association has emphasized the origination of
ARM loan products in order to increase the interest rate sensitivity of its loan
portfolio.

                                       8
<PAGE>
 
     TOTAL ASSETS.  Total assets increased by $3,550,000, or 5.9% from
$59,817,000 at September 30, 1997 to $63,367,000 at September 30, 1998.  The
increase in mortgage loans accounts for the majority of the asset growth.

     CASH AND CASH EQUIVALENTS.  Cash and cash equivalents increased by
$4,862,000, or 88.1% to $10,383,000 at September 30, 1998 from $5,521,000 at
September 30, 1997.  This increase was a result of the maturity or calling of
$3.4 million in investment securities and certificate of deposits and the
principal payments received on mortgage backed securities of $1.4 million.

     CERTIFICATES OF DEPOSIT.  Certificates of deposit purchased as investments
totaled $674,000 at September 30, 1998, an increase of $297,000 from $377,000 at
September 30, 1997.

     INVESTMENT SECURITIES.  Investment securities decreased by $3,651,000, or
28.0%, from $13,052,000 at September 30, 1997 to $9,401,000 at September 30,
1998.  The decrease was primarily due to the maturity or calling of investments.

     FEDERAL HOME LOAN BANK STOCK.  Investments in Federal Home Loan Bank stock
decreased $56,000 from $421,000 at September 30, 1997 to $365,000 at September
30, 1998.  The FHLB redeemed excess stock during the year ended September 30,
1998.

     MORTGAGE-BACKED SECURITIES.  Mortgage-backed securities decreased by
$1,352,000, or 30.2%, from $4,473,000 at September 30, 1997 to $3,121,000 at
September 30, 1998.  The decrease was due to the receipt of principal payments
on those securities.

     LOANS RECEIVABLE.  The balance of net loans increased $3,628,000, or 10.7%,
to $37,506,000 at September 30, 1998 from $33,878,000 at September 30, 1997.
The increase in loans was primarily the result of increases in one-to-four
family residential real estate loans and construction loans which are adjustable
rate and fixed rate mortgages that were funded from funds on hand and a $1
million cash advance from FHLB of Des Moines.

     DEPOSITS.  Deposits increased $4,052,000, or 9.2%, to $47,944,000 at
September 30, 1998 compared to $43,892,000 at September 30, 1997.  The increase
can be attributed to growth partially as a result of deposit transfers from
larger mega banks.

     FHLB ADVANCES.  The use of cash advances from Federal Home Loan Bank of Des
Moines were utilized during the fiscal year ending September 30, 1998 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.  The Association repaid $2.0 million and borrowed another $3.0
million in advances during the year ended September 30, 1998.

     STOCKHOLDERS' EQUITY.  Stockholders' equity decreased $1,419,000, or 12.0%,
from $11,824,000 at September 30, 1997 to $10,405,000 at September 30, 1998, as
a result of the stock repurchase program and quarterly dividend payments.
During the year ended September 30, 1998, the Company repurchased 94,827 shares
of its stock at an average price of $18.41 per share.

                                       9
<PAGE>
 
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,                         
                                              --------------------------------------------------------------------------------- 
                                                                1996                                     1997                      
                                              ---------------------------------------------------------------------------------    
                                                Average      Interest &    Yield/       Average       Interest &       Yield/      
                                              Balance (2)    Dividends      Cost      Balance (2)      Dividends        Cost       
                                              -----------   ------------  --------   ------------    -------------    ---------    
<S>                                           <C>           <C>           <C>        <C>             <C>              <C>          
Interest-earning assets:                                                                                                           
Loans receivable (1)                             $28,841         $2,069      7.17%       $32,416            $2,391        7.38%    
Investment securities                             12,593            758      6.02         13,815               895        6.48     
Mortgage-backed and related securities             5,645            425      7.53          4,951               361        7.29     
Daily interest-bearing assets                      9,089            451      4.96          5,881               259        4.40     
                                              -----------   ------------             ------------    -------------      
   Total interest-earning assets                  56,168          3,703      6.59         57,063             3,906        6.85     
                                                                                                                                   
Noninterest-earning assets:                                                                                                        
 Office properties and                                                                                                             
   equipment, net                                    897                                   1,073                                   
 Other noninterest-earning assets                    542                                     584                                   
                                              -----------                            ------------
   Total assets                                  $57,607                                 $58,720                                   
                                              ===========                            ============
                                                                                                                                   
Interest-earning liabilities:                                                                                                      
 Passbook savings accounts                         5,815            163      2.80          5,752               160        2.78     
 Demand and NOW accounts                           6,188            141      2.28          5,953               138        2.32     
 Money market accounts                             3,095            100      3.23          2,839                92        3.24     
 Certificates of deposit                          27,877          1,469      5.27         28,076             1,522        5.42     
                                              -----------      ---------             ------------    -------------            
  Total deposits                                  42,975          1,873      4.36         42,620             1,912        4.49     
 Advances from FHLB                                   --             --        --          2,917               153        5.25     
                                              -----------      ---------             ------------    -------------            
  Total interest-bearing liabilities              42,975          1,873      4.36         45,537             2,065        4.54     
Noninterest-bearing liabilities:                                                                                                   
 Noninterest-bearing deposits                        245                                     293                                   
 Other liabilities                                   943                                     990                                   
                                              ----------                             -----------                                   
  Total liabilities                               44,163                                  46,820                                   
Stockholders' equity                              13,444                                  11,900                                   
                                              ----------                             -----------                                   
  Total liabilities and                                                                                                            
   stockholders' equity                          $57,607                                 $58,720                                   
                                              ==========                             ===========                                   
                                                                                                                                   
Net interest income                                              $1,830                                     $1,841                 
                                                               =========                             =============                 
                                                                                                                                   
Interest rate spread                                                         2.23                                         2.31     
                                                                                                                                   
Net interest margin                                                          3.26                                         3.22     
                                                                                                                                   
Ratio of average interest-earning assets                                                                                           
 to average interest-bearing liabilities             131%                                    125%                                  

<CAPTION>
                                                           Years ended September 30,                              
                                              ---------------------------------------------------                 
                                                                    1998       
                                              ---------------------------------------------------        
                                                   Average           Interest &          Yield/
                                                 Balance (2)         Dividends            Cost
                                              --------------        --------------     ----------
<S>                                           <C>                   <C>                <C> 
Interest-earning assets:                                                  
Loans receivable (1)                                $36,157                $2,695           7.45%
Investment securities                                10,297                   689           6.69
Mortgage-backed and related securities                3,742                   297           7.94
Daily interest-bearing assets                         8,663                   372           4.29
                                              --------------        --------------
   Total interest-earning assets                     58,859                 4,053           6.89
                                                                           
Noninterest-earning assets:                                               
 Office properties and                                                    
   equipment, net                                     1,141               
 Other noninterest-earning assets                       598            
                                              --------------              
   Total assets                                     $60,598               
                                              ==============              
                                                                          
Interest-earning liabilities:                                             
 Passbook savings accounts                            5,800                   160            2.76
 Demand and NOW accounts                              7,103                   179            2.52
 Money market accounts                                2,861                    93            3.25
 Certificates of deposit                             30,354                 1,624            5.35
                                              --------------        --------------
  Total deposits                                     46,118                 2,056            4.46
 Advances from FHLB                                   1,581                    94            5.95
                                              --------------        --------------
  Total interest-bearing liabilities                 47,699                 2,150            4.51 
Noninterest-bearing liabilities:                                          
 Noninterest-bearing deposits                           570               
 Other liabilities                                      993               
                                              --------------              
  Total liabilities                                  49,262               
Stockholders' equity                                 11,336               
                                              --------------              
  Total liabilities and                                                   
   stockholders' equity                             $60,598               
                                              ==============              
                                                                          
Net interest income                                                         1,903
                                                                    ==============
                                                                          
Interest rate spread                                                                         2.38
                                                                          
Net interest margin                                                                          3.23
                                                                          
Ratio of average interest-earning assets                                  
 to average interest-bearing liabilities                123%            
</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> 
                                                                                                         At
                                                        Years Ended September 30,                   September 30,
                                            ------------------------------------------------
                                                1996              1997              1998                 1998
                                                ----              ----              ----                 ----
<S>                                         <C>                   <C>               <C>             <C>     
Weighted average yield on loan portfolio        7.17%             7.38%             7.45%                7.28%
Weighted average yield on mortgage-
   backed and related securities........        7.53              7.29              6.69                 7.25
Weighted average yield on investment
   securities...........................        6.02              6.48              7.94                 6.20
Weighted average yield on interest-
   bearing deposits.....................        4.96              4.40              4.29                 5.77
Weighted average yield on all interest-
   earning assets.......................        6.59              6.85              6.89                 7.20
Weighted average rate paid on
   total deposits.......................        4.36              4.49              4.46                 4.36
Weighted average rate paid on all
   advances from FHLB...................          --              5.25              5.95                 5.81
Weighted average rate paid on all
   interest-bearing liabilities.........        4.36              4.54              4.51                 4.47
Interest rate spread (spread between
   weighted average rate on all
    interest-
   earning assets and all interest-
   bearing liabilities).................        2.23              2.31              2.38                 2.73
Net interest margin (net interest income
   as a percentage of average
   interest-earning assets).............        3.26              3.22              3.23                  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,
                                                --------------------------------------------------------------------------

                                                       1997 Compared to 1996                  1998 Compared to 1997
                                                    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>  
Interest-earning assets:
  Loans receivable (1)                            $   61     $253        8     $322     $   23     $278    $   3     $304
  Investment securities                               58       73        6      137         29     (228)      (7)    (206)
  Mortgage-backed and related securities             (14)     (50)      --      (64)        32      (88)      (8)     (64)
  Daily interest-bearing deposits                    (51)    (159)      18     (192)        (6)     122       (3)     113
                                                ---------    -----    ----     -----       ----    -----     ----    -----

Total net change in income                                                                                        
  on interest-bearing assets                          54      117       32      203         78       84      (15)     147

Interest-bearing liabilities:
  Interest-bearing deposits                           56      (15)      (2)      39        (13)     157       --      144
  Advances from FHLB                                  21      125        7      153         20      (70)      (9)     (59)
                                                ---------    -----    ----     -----       ----    -----     ----    -----

Total net change in expenses
  on interest-bearing liabilities                     77      110        5      192          7       87       (9)      85
                                                ---------    -----    ----     -----       ----    -----     ----    ----- 

Net change in net interest income                 $  (23)    $  7    $  27     $ 11     $   71     $ (3)   $  (6)    $ 62
                                                ====================================  ====================================
</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 has begun to
use 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 $3,695,000 while
there was a net decrease in investments in securities and mortgage-backed
securities totaling $5,121,000 during the year ended September 30, 1998.  These
activities were primarily funded by cash on hand, maturing and calling of
investments and the use of cash advances from Federal Home Loan Bank of Des
Moines.

          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 years 1996, 1997 and 1998 the
Association used its sources of funds primarily to fund loan commitments and to
pay maturing savings certificates and deposit withdrawals.  At September 30,
1998, the Association had loan commitments of $1,398,000.

          At September 30, 1998, savings certificates amounted to $31,727,000,
or 66.2%, of the Association's total deposits, including $22,809,000 which were
scheduled to mature by September 30, 1999.  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, 1998, 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 40.5%, 35.6% and 36.7% during the years ended September
30, 1996, 1997 and 1998, respectively.  The Association's actual ratio at
September 30, 1998 was 40.1%.  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, 1998, the Association was in
compliance with all regulatory capital requirements which were effective as of
such date with tangible, core and risk-based capital ratios of 13.4%, 13.4% and
29.7%, respectively.  See Note 18 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
----------------


          Information is being provided worldwide on the Y2K (year 2000)
problems and concerns of a computer crash that will occur when the year rolls to
January 1, 2000.  The reason for concern is that when computers were first being
developed, storage space was at a premium and two digits were used for the year
instead of four.  An example is 1967 was stored on a computer as 67 to save
space.  Because of this practice, many computer programs are still using the two
digit format and would read the year 2000 as 1900.  The Company has researched
the  Y2K problem and has developed a plan to identify and correct any potential
problems.  Costs of corrective measures are not expected to be material to the
operations, business or financial condition of the Company.

          The Company uses FISERV of Des Moines as its data center to process
transactions.  FISERV has been upgrading their systems and testing has begun
using a proxy sample of institutions.  Results of testing have been sent to the
Company and are being examined by appropriate personnel.  In the first quarter
of 1999, connectivity testing will be conducted in the Y2K mode.  In the event
that there are still problems that occur in FISERV processing for the Company in
January of 2000, significant data processing delays or mistakes could occur.
Contingency plans are also being developed, but a switch to another processor or
to an-house system, could result in delays in processing customer transactions.
As a result of the extensive testing through FISERV, Year 2000 problems are not
anticipated and there should not be any significant adverse impact on the
Company's financial condition and results of operations.

                                       15
<PAGE>
 
          [LETTERHEAD OF KIRKPATRICK, PHILLIPS & MILLER APPEARS HERE]


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

To the Board of Directors and Stockholders
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, 1997 and 1998, and the 
related consolidated statements of income, stockholders' equity and cash flows 
for each of the three years in the period ended September 30, 1998. 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, 1997 and 1998, and the results of its  
operations and its cash flows for each of the three years in the period ended 
September 30, 1998, in conformity with generally accepted accounting principles.

                                      /s/ Kirkpatrick, Phillips & Miller

                                      KIRKPATRICK, PHILLIPS & MILLER, CPAs, P.C.

November 3, 1998
Springfield, Missouri

                                      16
<PAGE>
 
                       NS&L BANCORP, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                ----------------------------------------------
                          SEPTEMBER 30, 1997 AND 1998

<TABLE> 
<CAPTION> 
                                                                        1997               1998    
                                                                    ------------       ------------
<S>                                                                 <C>                <C>         
                  ASSETS                                                                           
                  ------                                                                           
Cash and cash equivalents, including                                                               
 interest-bearing accounts of $4,844,199 in                                                        
 1997 and $9,697,525 in 1998                                        $  5,521,215       $ 10,383,379
Certificates of deposit                                                  377,000            674,000
Investment securities available-for-sale,                                                          
 at fair value (Notes 1 and 3)                                           266,813            203,850
Investment securities held-to-maturity                                                             
 (estimated market value of $13,039,195 in 1997                                                   
 and $9,701,638 in 1998)(Notes 1 and 3)                               13,052,211          9,401,155
Investment in Federal Home Loan Bank stock, at cost (Note 4)             420,600            365,400
Mortgage-backed securities held-to-maturity                                                        
 (estimated market value of $4,608,360 in 1997                                                     
 and $3,205,626 in 1998)(Notes 1 and 5)                                4,473,160          3,121,405
Loans held for sale (Note 1)                                              31,060             85,582
Loans receivable, net (Notes 1 and 6)                                 33,847,820         37,420,586
Accrued interest receivable (Note 7)                                     454,206            360,216
Property and equipment,                                                                            
 less accumulated depreciation (Notes 1 and 8)                         1,148,039          1,130,031
Intangible assets (Note 1)                                                83,343             80,559
Other assets                                                             141,263            140,370
                                                                    ------------       ------------
   TOTAL ASSETS                                                     $ 59,816,730       $ 63,366,533
                                                                    ============       ============
                                                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY                                                               
------------------------------------                                                               
                                                                                                   
Customer deposits (Note 10)                                         $ 43,892,375       $ 47,944,489
Advances from Federal Home Loan Bank (Note 11)                         3,000,000          3,986,132
Advances from borrowers for taxes and insurance                          317,548            305,199
Income taxes payable - current (Note 9)                                   34,592             10,519
Deferred income taxes (Notes 1 and 9)                                    412,873            340,110
Other liabilities                                                        335,047            375,456
                                                                    ------------       ------------
   Total liabilities                                                  47,992,435         52,961,905
                                                                    ------------       ------------
                                                                                                   
Commitments and Contigencies (Note 16)                                         -                  -                                
                                                                                                   
Preferred stock, $.01 par value; 2,000,000                                                         
 shares authorized, none issued                                                -                  -
Common stock, $.0l par value; 8,000,000 shares authorized,                                         
 issued 886,314 in 1997 and 886,314 in 1998, outstanding                                           
 711,666 in 1997 and 616,839 in 1998                                       8,863              8,863
Paid-in capital                                                        8,461,129          8,514,679
Retained earnings - substantially restricted (Note 18)                 6,493,728          6,647,884
Treasury stock, at cost 174,648 shares in 1997                                                     
 and 269,475 in 1998                                                  (2,414,324)        (4,160,375)
Unearned compensation (Note 12)                                         (779,793)          (637,199)
Unrealized gain on securities available-for-sale,                                                  
 net of applicable deferred income taxes                                  54,692             30,776
                                                                    ------------       ------------
   Total stockholders' equity                                         11,824,295         10,404,628
                                                                    ------------       ------------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $ 59,816,730       $ 63,366,533
                                                                    ============       ============
</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, 1996, 1997 AND 1998

<TABLE> 
<CAPTION> 
                                                                    1996              1997              1998   
                                                                    ----              ----              ----   
<S>                                                             <C>                <C>              <C>        
INTEREST INCOME:                                                                                               
  Loans receivable                                              $ 2,069,138        $ 2,391,319      $ 2,695,123
  Investment securities                                             757,481            894,610          689,208
  Mortgage-backed and related securities                            425,189            361,409          296,973
  Other interest-earning assets                                     450,831            258,951          372,111
                                                                -----------        -----------      -----------
    Total interest income                                         3,702,639          3,906,289        4,053,415
                                                                -----------        -----------      -----------
                                                                                                               
INTEREST EXPENSE:                                                                                              
  Customer deposits                                               1,872,658          1,912,171        2,056,649
  Federal Home Loan Bank advances                                         -            153,359           93,839
                                                                -----------        -----------      -----------
    Total interest expense                                        1,872,658          2,065,530        2,150,488
                                                                -----------        -----------      -----------

    Net interest income                                           1,829,981          1,840,759        1,902,927

PROVISION FOR LOAN LOSSES                                             3,201              2,195            7,825
                                                                -----------        -----------      -----------
    Net interest income after provision for loan losses           1,826,780          1,838,564        1,895,102
                                                                -----------        -----------      -----------
                                                                                                               
NONINTEREST INCOME:                                                                                            
  Gain on sale of investment securities                              77,137             36,859           18,125
  Gain on sale of loans                                                   -                286            9,732
  Banking service charges and fees                                  146,326            145,751          162,902
  Mortgage banking fees                                                   -             33,219          219,843
  Loan late charges                                                   7,350              7,208            7,621
  Other                                                              34,331             11,576            5,353
                                                                -----------        -----------      -----------
    Total noninterest income                                        265,144            234,899          423,576
                                                                -----------        -----------      -----------
                                                                                                               
NONINTEREST EXPENSE:                                                                                           
  Compensation and                                                                                             
   employee benefits (Notes 12 and 13)                              702,127            784,706          940,765
  Occupancy and equipment                                           142,152            152,571          188,689
  Deposit insurance premium                                         383,628             39,171           28,280
  Data processing                                                    83,871             91,095          102,418
  Printing, postage, stationery and supplies                         60,551             55,937           56,001
  Professional fees                                                  63,291             62,959           52,979
  Other                                                             177,749            185,216          231,402
                                                                -----------        -----------      -----------
    Total noninterest expense                                     1,613,369          1,371,655        1,600,534
                                                                -----------        -----------      -----------
    INCOME BEFORE TAXES                                             478,555            701,808          7l8,144
    Income Taxes (Note 9)                                           151,623            246,209          263,879
                                                                -----------        -----------      -----------
NET INCOME                                                      $   326,932        $   455,599      $   454,265
                                                                ===========        ===========      ===========
Basic earnings per share (Notes 1 and 14)                       $      0.42        $      0.68      $      0.79
                                                                ===========        ===========      ===========
Diluted earnings per share (Notes 1 and 14)                     $      0.42        $      0.67      $      0.77
                                                                ===========        ===========      ===========
</TABLE> 
              
              The accompanying notes are an integral part of the
                       consolidated financial statements
                                
                                      18
<PAGE>
                       NS&L BANCORP, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                -----------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 and 1998


<TABLE> 
<CAPTION> 
                                                       Common                                                                    
                                                       Stock                     Paid-In            Retained         Treasury       
                                              -------------------------                                                            
                                                Shares          Amount           Capital            Earnings          Stock        
                                              ----------      ---------       ------------       -------------    ------------- 
<S>                                           <C>             <C>             <C>                <C>              <C> 
Balances at September 30, 1995                $  856,449      $   8,564       $  7,989,521       $   6,402,231    $           -
 Net income                                            -              -                  -             326,932                -
 Net proceeds from issuance of common stock       31,365            314            407,431                   -                -  
 Common stock acquired by MRDP (Note 12)              -               -                  -                   -                -
 Dividends ($.475 per share)                          -               -                  -            (366,l05)               -     
 Purchase of treasury stock at cost            (128,732)              -                  -                   -       (1,675,943)
 Vesting of MRDP shares (Note 12)                     -               -                  -                   -                -
 Release of ESOP shares (Note 12)                     -               -             18,979                   -                -     
 Net change in unrealized gain on                                                                                          
   securities available-for-sale, net of                                                                                    
   applicable deferred income taxes                   -               -                  -                   -                -
                                              ---------       ---------       ------------       -------------    -------------    

Balances at September 30, 1996                  759,082           8,878          8,415,931           6,363,058       (1,675,943)   
 Net income                                           -               -                  -             455,599                -
 Net proceeds from issuance of common stock         500               5              8,120                   -                -
 Proceeds from exercise of stock options         (1,000)             10             12,928                   -                - 
 Common stock acquired by MRDP (Note 12)              -               -                  -                   -                - 
 Dividends ($.50 per share)                           -               -                  -            (326,504)               -
 Purchase of treausry stock at cost             (50,100)              -                  -                   -         (793,035)   
 Issuance of treasury stock                       4,184               -             21,846                   -           54,654 
 Vesting of MRDP shares (Note 12)                     -               -                  -                   -                -
 Release of ESOP shares (Note 12)                     -               -             41,274                   -                -
 Forfeiture of MRDP shares                       (3,000)            (30)           (38,970)              1,575                -
 Net change in unrealized gain                                                                                             
   on securities available for sale,                                                                                        
   net of applicable deferred income                                                                                         
   taxes                                              -               -                  -                   -                -
                                              ---------       ---------       ------------       -------------    -------------    

Balances at September 30, 1997                  711,666           8,863          8,461,129           6,493,728       (2,414,324)   
   Net income                                         -               -                  -             454,265                -
   Dividends ($.5O per share)                         -               -                  -            (300,109)               -     
   Purchase of treausry stock at cost           (94,827)              -                  -                   -       (1,746,051)   
   Vesting of MRDP shares (Note 12)                   -               -                  -                   -                -     
   Release of ESOP shares (Note 12)                   -               -             53,550                   -                -
   Net change in, unrealized gain                                                                                            
    on securities available for sale,                                                                                        
    net of applicable deferred income                 -               -                  -                   -                - 
    taxes                                     ---------       ---------       ------------       -------------    -------------   
Balances at September 30, 1998                  616,839       $   8,863       $  8,514,679       $   6,647,884    $  (4,160,375)    
                                              =========       =========       ============       =============    =============

<CAPTION> 
                                                                 Unrealized          Total
                                                Unearned          Gain on         Stockholders'
                                              Compensation       Securities          Equity
                                              ------------      ------------      -------------
<S>                                           <C>               <C>               <C>  
Balances at September 30, 1995                $   (671,200)     $          -      $  13,729,116       
 Net income                                              -                 -            326,932
 Net proceeds from issuance of common stock              -                 -            407,745
 Common stock acquired by MRDP (Note 12)          (407,745)                -           (407,745)
 Dividends ($.475 per share)                             -                 -           (366,105)
 Purchase of treasury stock at cost                      -                 -         (1,675,943)
 Vesting of MRDP shares (Note 12)                   57,764                 -             57,764
 Release of ESOP shares (Note 12)                   68,475                 -             87,454
 Net change in unrealized gain on           
   securities available-for-sale, net of     
   applicable deferred income taxes                      -            19,345             19,345
                                              ------------      ------------      -------------     

Balances at September 30, 1996                    (952,706)           19,345         12,178,563
 Net income                                              -                 -            455,599
 Net proceeds from issuance of common stock              -                 -              8,125
 Proceeds from exercise of stock options                 -                 -             12,938
 Common stock acquired by MRDP (Note 12)            (8,125)                -             (8,125)
 Dividends ($.50 per share)                              -                 -           (326,504)
 Purchase of treausry stock at cost                      -                 -           (793,035)       
 Issuance of treasury stock                              -                 -             76,500
 Vesting of MRDP shares (Note 12)                   73,519                 -             73,519
 Release of ESOP shares (Note 12)                   68,519                 -            109,793
 Forfeiture or MRDP shares                          39,000                 -              1,575
 Net change in unrealized gain              
   on securities available for sale,         
   net of applicable deferred income          
   taxes                                                 -            35,347             35,347
                                              ------------      ------------      -------------     

Balances at September 30, 1997                    (779,793)           54,692         11,824,295
   Net income                                            -                 -            454,265
   Dividends ($.50 per share)                            -                 -           (300,109)
   Purchase of treausry stock at cost                    -                 -         (1,746,051)
   Vesting of MRDP shares (Note 12)                 74,074                 -             74,074
   Release of ESOP shares (Note 12)                 68,520                 -            122,070
   Net change in, unrealized gain             
    on securities available for sale,         
    net of applicable deferred income         
    taxes                                                -           (23,916)           (23,916)
                                              ------------      ------------      -------------     
Balances at September 30, 1998               $    (637,199)     $     30,776      $  10,404,628
                                              ============      ============      =============
</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, 1996, 1997 AND 1998

<TABLE> 
<CAPTION> 
                                                                     1996            1997             1998
                                                                 ------------    -------------    ------------ 
<S>                                                              <C>             <C>              <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                      $    326,932    $     455,599    $    454,265
 Adjustments to reconcile net income to
  net cash provided by operating activities:
   Depreciation                                                        82,887           84,895          88,479
   Amortization                                                             -              232           2,784
   Premiums and discounts on mortgage-backed
    securities and investment securities                             (107,509)        (103,647)       (116,814)
   Origination of loans held for sale                                       -          (72,276)       (968,673)
   Proceeds from sale of loans held for sale                                -           57,142         923,282
   Loss on loans, net of recoveries                                     3,201            2,195           7,825
   Gain on sale of investment securities                              (77,137)         (36,859)        (18,125)
   Gain on sale of loans                                                    -             (283)         (9,732)
   Loss on sale of equipment                                                -              795               -
   Income reinvested on Federal Home Loan Bank stock                   (8,300)               -               -
   Vesting of MRDP shares                                              57,764           73,519          74,074
   Release of ESOP shares                                              87,454          109,793         122,070
   Net change in operating accounts:
    Accrued interest receivable                                        44,503          (62,745)         93,990
    Other assets                                                      (73,206)          83,508             893
    Other liabilities                                                 310,279         (229,251)         52,263
    Income taxes payable - deferred                                  (112,961)          96,906         (24,073)
    Income taxes payable - current                                     86,826              769         (58,716)
                                                                 ------------    -------------    ------------
     Net cash from operating activities                               620,733          460,292         623,792
                                                                 ------------    -------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of investment securities held-to-maturity                (4,846,991)      (2,803,760)     (6,602,800)
 Proceeds from maturities of investment
  securities held-to-maturity                                       6,578,000          975,000      10,344,102
 Purchase of investment securities available-for-sale              (4,163,255)               -               -
 Proceeds from maturities of investment
  securities available-for-sale                                     2,900,000          500,000               -
 Net change in certificates of deposit                               (655,553)       2,220,553        (297,000)
 Proceeds from sales of investment
  securities available-for-sale                                       446,017          251,859          43,125
 Proceeds from sale of Federal Home Loan Bank stock                         -                -          55,200
 Net change in loans receivable                                    (5,121,492)      (2,781,216)     (3,591,801)
 Purchase of mortgage-backed and
  related securities held-to-maturity                                (370,372)        (315,038)              -
 Proceeds from principal payments and
  maturities of mortgage-backed securities
  held-to-maturity                                                    921,150        1,196,993       1,378,323
 Purchases of property and equipment                                  (23,379)        (325,119)        (58,660)
 Acquisition of Crawford Mortgage Inc, net of cash                          -          (52,588)              -
                                                                 ------------    -------------    ------------
    Net cash from (used in) investing activities                 $ (4,335,875)   $  (1,133,316)    $ 1,270,489
                                                                 -------------   ------------     ------------
</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, 1996, 1997 AND 1998

<TABLE> 
<CAPTION> 
                                                                        1996               1997                1998
                                                                  ---------------     --------------     ---------------
<S>                                                               <C>                 <C>                <C> 
CASH FLOWS FROM FINANCING ACTIVITIES:
 Net change in demand deposits,
  savings accounts, and certificates of deposit                   $     4,355,927     $   (4,551,158)    $     4,052,114
 Proceeds from Federal Home Loan Bank advances                                  -          3,500,000           3,000,000
 Payments on Federal Home Loan Bank advances                                    -           (500,000)         (2,013,868)
 Proceeds from issuance of common stock                                         -             12,938                   -
 Cash dividends paid                                                     (356,865)          (330,856)           (311,963)
 Purchase of treasury stock                                            (1,675,943)          (793,035)         (1,746,051)
 Net increase (decrease) in mortgage escrow funds                           4,957              3,077             (12,349)
                                                                  ---------------     --------------     ---------------
  Net cash from (used in) financing activities                          2,328,076         (2,659,034)          2,967,883
                                                                  ===============     ===============    ================

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                   (1,387,066)        (3,332,058)          4,862,164

Cash and cash equivalents-beginning of year                            10,240,339          8,853,273           5,521,215
                                                                  ---------------     --------------     ---------------
CASH AND CASH EQUIVALENTS-END OF YEAR                             $     8,853,273     $    5,521,215     $    10,383,379
                                                                  ===============     ==============     ===============     

SUPPLEMENTAL DISCLOSURES OF
 CASH FLOW INFORMATION:

  Cash paid during the year for:
    Interest                                                      $     1,868,691     $    2,045,292     $    2,158,283
    Income taxes                                                          231,291            147,476            348,953

SUPPLEMENTAL SCHEDULE OF NON-CASH
 INVESTING AND FINANCING ACTIVITIES:

 Dividends declared September 20,
  1996, payable October 3l, 1996                                  $        94,885     $            -     $            -
 Dividends declared September 22,
  1997, payable October 31, 1997                                                -             88,959                  -
 Dividends declared September 17,
  1998, payable October 30, 1998                                                -                  -             77,105
 Issuance of treasury stock during
  acquisition of subsidiary                                                     -             76,500                  -
 Loan receivable transferred to property and
  equipment in settlement of loan                                               -                  -             11,811
</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, 1996, 1997 AND 1998


(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 an original maturity of three months or less.

                                      22
<PAGE>
                        NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------   
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


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

       INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES -- Securities are
          classified in accordanec 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,
          1997 and 1998, 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, 1998, the Company had no 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:
<TABLE> 
<CAPTION> 
                           CATEGORY              ESTIMATED LIFE                METHOD
                   ---------------------         --------------           -----------------
                   <S>                           <C>                      <C>    
                   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
</TABLE> 
         
                                      23

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

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


 (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 and Financial Services, Inc., which is discussed
             further in Note (2). 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 $232
             and $2,784 for the years ended September 30, 1997 and 1998,
             respectively.

       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.
             Management has considered the effect of the of the year 2000 issues
             on major borrowers in the determination of the adequacy of the
             allowance for loan losses.

       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.

                                      24

<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------                    
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(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. The Company adopted
      SFAS No. 128 for the year ended September 30, 1998, and prior periods were
      restated. The adoption of this standard did not have a material effect on
      previously reported earnings per share.

      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 share 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.

      NEW ACCOUNTING STANDARDS - In July 1997, FASB issued SFAS No. 130,
      "Reporting Comprehensive Income", which establishes standards for
      reporting and presenting of comprehensive income and its components
      (revenues, expenses, gains and losses) in a full set of general-purpose
      financial statements. It requires that all items that are required to be
      recognized under accounting standards as components of comprehensive
      income be reported in a financial statement that is presented with the
      same prominence as other financial statements. SFAS No. 130 requires that
      companies (i) classify items of other comprehensive income by their nature
      in a financial statement and (ii) display the accumulated balance of other
      comprehensive income separately from retained earnings and additional 
      paid-in capital in the equity section of the statement of financial
      condition. SFAS No. 130 is effective for fiscal years beginning after
      December 15, 1997. Reclassification of financial statements for earlier
      periods provided for comparative purposes is required. The Company's most
      significant component of other comprehensive income is the unrealized
      holding gains and losses on investment securities classified as available-
      for-sale.

      In June 1997, FASB issued SFAS No. 131, "Disclosure About Segments of an
      Enterprise and Related Information," which established standards for
      disclosure about operating segments in annual financial statements and 
      selected information in interim financial reports. It also establishes
      standards for related disclosures about products and services, geographic
      areas and major customers. SFAS No. 131 supersedes SFAS No. 14,
      "Financial Reporting for Segments of a Business Enterprise". SFAS No. 131
      becomes effective for the Company's fiscal year ending September 30, 1999,
      and requires that comparative information from earlier years be restated
      to conform to its requirements. The adoption of the provisions of SFAS No.
      131 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, 1996, 1997 AND 1998


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

           In February 1998, FASB issued SFAS No. 132, "Employers' Disclosures
           about Pensions and Other Postretirement Benefits," which standardizes
           the disclosure requirements for pensions and other postretirement
           benefits and requires additional information on changes in the
           benefit obligations and fair values of plan assets that will
           facilitate financial analysis. SFAS No. 132 is effective for years
           beginning after December 15, 1997, and requires comparative
           information for earlier years to be restated, unless such information
           is not readily available. The adoption of SFAS No. 132 is not
           expected to have a material impact on the Company.

           In June 1998, FASB issued SFAS No. 133, "Accounting for Derivative
           Instruments and Hedging Activities," which established 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. This Statement is effective for all fiscal
           quarters of fiscal years beginning after June 15, 1999. The adoption
           of this standard is not expected to have a material impact on the
           Company.

           In October 1998, 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 is effective for the first fiscal quarter beginning after
           December 15, 1998. The adoption of this standards is not expected to
           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)    ACQUISITION
       -----------
     
       During 1997, the Association formed a new subsidiary, Crawford
       Acquisition Company for the sole purpose of acquiring Crawford Mortgage
       and Financial Services, Inc. On August 26, 1997, Crawford Acquisition
       Company acquired all of the capital stock of Crawford Mortgage and
       Financial Services, Inc. in a business combination accounted for as a
       purchase. Crawford Mortgage and Financial Services, Inc. was engaged in
       originating mortgages primarily in Missouri. After the acquisition,
       Crawford Mortgage and Financial Services, Inc. was merged into Crawford
       Acquisition Company and the name was changed to Crawford Mortgage, Inc.
       The results of operations of Crawford Mortgage, Inc. are included in the
       accompanying financial statements since the date of formation.

                                      26
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(2)    ACQUISITION - (CONTINUED)
       -------------------------

       The total cost of this acquisition, which was based on fair market values
       of the net assets acquired, was as follows:

<TABLE> 
              <S>                                               <C> 
              Cash                                              $     20,911
              Loans and accrued interest                              33,432 
              Property and equipment                                  40,466 
              Goodwill                                                83,575 
              Accounts Payable                                       (10,555)
              Income tax payable                                     (12,304)
              Other liabilities                                       (5,525)
                                                                ------------ 
                  Total cost of net assets acquired             $    150,000 
                                                                ============
</TABLE> 

       The purchase price was comprised of 4,184 shares of NS&L Bancorp, Inc.
       common stock, valued at $76,500 and cash of $73,500.

       The table below presents an unaudited pro forma combined summary of
       operations of the Company for the years ended September 30, 1996 and
       1997. The Unaudited Pro Forma Combined Summary of Operations is
       presented as if the acquisition of Crawford Mortgage and Financial
       Services, Inc. had been effective October 1, 1995.

<TABLE> 
<CAPTION> 
                                                    1996           1997   
                                               ------------    -----------
       <S>                                      <C>            <C>        
       Interest Income                          $ 3,703,659    $ 3,908,632
       Interest Expense                           1,872,658      2,065,578
                                                -----------    ----------- 
       Net interest income                        1,831,001      1,843,054 
       Provision for loan losses                      3,201          2,195
       Noninterest Income                           376,076        494,237 
       Noninterest Expense                        1,703,230      1,568,483 
                                                -----------    ----------- 
         Income before income taxes                 500,646        766,613 
       Income taxes                                 159,723        262,309 
                                                -----------    ----------- 
         Net Income                             $   340,923    $   504,304
                                                ===========    =========== 
                                                                          
       Basic earnings per share                 $       .43    $       .75
                                                ===========    ===========                                           
       Diluted earnings per share               $       .43    $       .74
                                                ===========    =========== 
</TABLE> 

                                      27
<PAGE>
                       NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATRD F1NANC1AL STATEMENTS
                   ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998

(3)    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 balance sheets, and their approximate market
       values were as foflows:

       A summary of investment securities available-for-sale at September 30,
       1997 is as follows:

<TABLE> 
<CAPTION> 
                                                                                    Estimated
                                      Amortized            Gross Unrealized           Fair 
                                                     -------------------------  
                                        Cost            Gains         Losses          Value
                                     ----------      ----------     ----------      ----------
      <S>                            <C>             <C>            <C>             <C> 
      Common stock                   $  l80,000      $   86,813     $        -      $  266,813
                                     ==========      ==========     ==========      ==========
</TABLE> 

       Proceeds from the sales of common stock held as available-for-sale during
       the year ended September 30, 1997 were $251,859. A gain of $36,859 was
       recognized on these sales.

       Proceeds from the sales of common stock held as available-for-sale during
       the year ended September 30, 1996 were $446,017. A gain of $77,137 was
       recognized on these sales.

       A summary of the investment securities held-to-maturity at September 30,
       1997 is as follows:

<TABLE> 
<CAPTION>
                                                                                                             Estimated
                                                 Amortized                 Gross Unrealized                    Fair
                                                                  ----------------------------------
                                                   Cost               Gains                Losses              Value
                                              --------------      --------------      --------------      --------------
       <S>                                    <C>                 <C>                 <C>                 <C> 
       U.S. Treasury securities and
         obligations of U.S. government       
         corporations and agencies            $   12,217,582      $      113,046      $      135,483      $   12,195,145
       Obligations of states and
         political subdivisions                      834,629               9,421                   -             844,050
                                              --------------      --------------      --------------      --------------
            Total                             $   13,052,211      $      122,467      $      135,483      $   13,039,195 
                                              ==============      ==============      ==============      ==============
</TABLE> 

       A summary of investment securities avai1ab1e-for-sale at September 30,
       1998 is as follows:
 
<TABLE> 
<CAPTION> 
                                                                                             Estimated
                                          Amortized             Gross Unrealized               Fair
                                                         ----------------------------
                                            Cost            Gains            Losses            Value
                                        -----------      -----------      -----------      -----------
       <S>                              <C>              <C>              <C>              <C> 
       Common Stock                     $   155,000      $    48,850      $         -      $   203,850
                                        ===========      ===========      ===========      ===========
</TABLE> 

       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.

                                      28
<PAGE> 

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(3)    INVESTMENT SECURITIES - CONTINUED
       ---------------------------------

       A summary of the investment securities held-to-maturity at September 30,
       1998 is as follows:

<TABLE> 
<CAPTION> 
                                                                                            Estimated
                                                   Amortized        Gross Unrealized           Fair
                                                                ----------------------- 
                                                      Cost         Gains        Losses        Value
                                                  -----------   ----------     --------    -----------
          <S>                                     <C>           <C>            <C>         <C> 
          U.S. Treasury securities and                      
             obligations of U.S. government                 
             corporations and agencies            $ 8,482,539   $ 291,930      $ 11,939    $ 8,762,530 
          Obligations of states and                         
             political subdivisions                   918,616      20,492             -        939,108
                                                  -----------   ----------     --------    ----------- 
                  Total                           $ 9,401,155   $  312,422     $ 11,939    $ 9,701,638
                                                  ===========   ==========     ========    =========== 
</TABLE> 

       The amortized cost and estimated market value of investment securities
       held-to-maturity at September 30, 1998, 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                               $   734,706     $   738,630
        Due after one year through five years                   2,024,664       2,035,143
        Due after five years through ten years                  5,421,557       5,578,449
        Due after ten years                                     1,220,228       1,349,416
                                                              -----------     -----------
          Total                                               $ 9,401,155     $ 9,701,638
                                                              ===========     ===========
</TABLE> 

       Securities pledged as collateral had book values of $2,395,005 and market
       values of $2,391,750 at September 30, 1997. There were no securities
       pledged as collateral at September 30, 1998.

(4)    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 $365,400 at September 30, 1998.

                                      29
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                YEARS ENDED SEPTEMBER 30, 1996, 1997, AND 1998


(5)    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, 1997                           
                                      ------------------------------------------------------          
                                       PRINCIPAL    UNAMORTIZED     UNEARNED      CARRYING            
                                        BALANCE      PREMIUMS       DISCOUNTS       VALUE             
                                      -----------   -----------   ------------   -----------          
      <S>                             <C>           <C>           <C>            <C>                  
      GNMA Certificates               $ 1,048,907   $         -   $      4,226   $ 1,044,681          
      FHLMC Certificates                1,152,857           115         69,290     1,083,682          
      FNMA Certificates                 2,357,648             -         12,851     2,344,797          
                                      -----------   -----------   ------------   -----------          
                                      $ 4,559,412   $       115   $     86,367   $ 4,473,160          
                                      ===========   ===========   ============   ===========          
<CAPTION>                                                                                             
                                                       GROSS          GROSS       ESTIMATED           
                                       CARRYING     UNREALIZED      UNREALIZED     MARKET             
                                         VALUE         GAINS          LOSSES        VALUE             
                                      -----------   -----------   ------------   -----------          
      <S>                             <C>           <C>           <C>            <C>                  
      GNMA Certificates               $ 1,044,681   $    14,715   $          -   $ 1,059,396          
      FHLMC Certificates                1,083,682        83,554              -     1,167,236          
      FNMA Certificates                 2,344,797        36,931              -     2,381,728          
                                      -----------   -----------   ------------   -----------          
                                      $ 4,473,160   $   135,200   $          -   $ 4,608,360          
                                      ===========   ===========   ============   ===========          
                                                                                                      
<CAPTION>                                                                                             
                                                           SEPTEMBER 30, 1998                         
                                      ------------------------------------------------------          
                                       PRINCIPAL    UNAMORTIZED     UNEARNED      CARRYING            
                                        BALANCE       PREMIUMS      DISCOUNTS      VALUE              
                                      -----------   -----------   ------------   -----------          
      <S>                             <C>           <C>            <C>           <C>                  
      GNMA Certificates               $   729,903   $         -    $     3,085   $   726,818                   
      FHLMC Certificates                  711,747            94         46,708       665,133          
      FNMA Certificates                 1,739,439             -          9,985     1,729,454          
                                      -----------   -----------    -----------   -----------                  
                                      $ 3,181,089   $        94    $    59,778   $ 3,121,405          
                                      ===========   ===========   ============   ===========          
<CAPTION>                                                                                             
                                                      GROSS            GROSS      ESTIMATED           
                                       CARRYING     UNREALIZED      UNREALIZED     MARKET             
                                        VALUE         GAINS           LOSSES       VALUE              
                                      -----------   -----------   ------------   -----------          
      <S>                             <C>           <C>            <C>           <C>                  
      GNMA Certificates               $   726,818   $    27,051              -   $   753,869          
      FHLMC Certificates                  665,133        56,080    $       948       720,265          
      FNMA Certificates                 1,729,454         8,020          5,982     1,731,492          
                                      -----------   -----------    -----------   -----------                                    
                                      $ 3,121,405   $    91,151    $     6,930   $ 3,205,626          
                                      ===========   ===========   ============   ===========           
</TABLE> 

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

                                      30
<PAGE>
                        
                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(6)    LOANS RECEIVABLE

       Loans receivable consist of the following:

<TABLE> 
<CAPTION> 
                                                                                SEPTEMBER 30.
                                                                       ---------------------------------
                                                                           1997                  1998
                                                                       ------------         ------------ 
       <S>                                                             <C>                  <C> 
       MORTGAGE LOANS:
        One-to-four dwelling units                                     $ 31,577,027         $ 33,557,833
        Commercial                                                          585,513              563,786
        Construction                                                        431,196            2,167,200
                                                                       ------------         ------------
         Total mortgage loans                                            32,593,736           36,288,819
                                                                       ------------         ------------

       OTHER LOANS:
        Loans on deposits                                                   407,857              471,139
        Home equity loans                                                    19,323              809,345
        Consumer and automobile                                           1,089,929            1,205,810
        Unsecured                                                            26,440               11,816
                                                                       ------------         ------------
          Total other loans                                               1,543,549            2,498,110
                                                                       ------------         ------------

       LESS:
        Undisbursed portion of loans in process                             209,515            1,298,715
        Net deferred loan origination fees                                   36,163               16,016
        Allowance for loan losses                                            43,787               51,612
                                                                       ------------         ------------
          NET LOANS RECEIVABLE                                         $ 33,847,82O         $ 37,420,586
                                                                       ============         ============
</TABLE> 

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

<TABLE> 
<CAPTION> 
                                                             YEARS ENDED SEPTEMBER 30,
                                                   --------------------------------------------- 
                                                     1996               1997              1998
                                                   --------           --------          -------- 
      <S>                                          <C>                <C>               <C> 
      Beginning balance                            $ 38,391           $ 41,592          $ 43,787
      Provision charged
        to income                                     3,201              2,195             7,825
                                                   --------           --------          --------
          Ending balance                           $ 41,592           $ 43,787          $ 51,612
                                                   ========           ========          ========
</TABLE> 

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

                                      31
<PAGE>
                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(7)  ACCRUED INTEREST RECEIVABLE
     ---------------------------
     
     Accrued interest receivable is summarized as follows:

<TABLE> 
<CAPTION> 
                                                                                SEPTEMBER 30,
                                                                        -----------------------------
                                                                           1997                 1998
                                                                        ---------           ---------
     <S>                                                                <C>                 <C> 
     Investment securities                                              $ 243,575           $ 131,625
     Mortgage-backed securities                                            33,368              24,091
     Loans receivable                                                     177,263             204,500
                                                                        ---------           --------- 
                                                                        $ 454,206           $ 360,216
                                                                        =========           =========  
</TABLE> 
 
(8)  PROPERTY AND EQUIPMENT
     ----------------------

     Property and equipment consists of the following:

<TABLE> 
<CAPTION> 
                                                                      SEPTEMBER 30, 1997
                                                       -----------------------------------------------
                                                                             ACCUM.
             CATEGORY                                      COST              DEPREC.            NET
     -------------------------                         ------------        -----------     -----------  
     <S>                                               <C>                 <C>             <C> 
     Land                                              $    398,215        $         -     $   398,215
     Leasehold improvements                                   5,963                330           5,633
     Buildings                                            1,107,552            500,488         607,064
     Office furniture, fixtures                                                      
       and equipment                                        436,937            299,810         137,127
                                                       ------------        -----------     -----------  
                                                       $  1,948,667        $   800,628     $ 1,148,039
                                                       ============        ===========     ===========

<CAPTION> 
                                                                      SEPTEMBER 30, 1998
                                                       -----------------------------------------------
                                                                             ACCUM.
             CATEGORY                                      COST              DEPREC.            NET
     -------------------------                         ------------        -----------     -----------   
     <S>                                               <C>                 <C>             <C> 
     Land                                              $    402,015        $         -     $   402,015
     Leasehold improvements                                   5,963                831           5,132
     Buildings                                            1,113,272            542,925         570,347
     Office furniture, fixtures            
       and equipment                                        497,879            345,342         152,537
                                                       ------------        -----------     -----------        
                                                       $  2,019,129        $   889,098     $ 1,130,031
                                                       ============        ===========     ===========
</TABLE> 

     Depreciation charged to operations for the years ended September 30,
     1996, 1997 and 1998 was $82,887, $84,895, and $88,479.

                                      32
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------  
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(9)    INCOME TAXES
       ------------

       The provision for income tax expense is as follows:


<TABLE> 
<CAPTION>
                                               YEARS ENDED SEPTEMBER 30,     
                                        -------------------------------------  
                                           1996           1997         1998  
                                        ---------      ---------    ---------  
       <S>                              <C>            <C>          <C>      
       Current                          $ 264,584      $ 145,103    $ 322,595  
       Deferred                          (112,961)       101,106      (58,716)
                                        ---------      ---------    --------- 
         Total                          $ 151,623      $ 246,209    $ 263,879
                                        =========      =========    ========= 
</TABLE> 


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


<TABLE> 
<CAPTION> 
                                               YEARS ENDED SEPTEMBER 30, 
                                        -------------------------------------  
                                           1996           1997         1998    
                                        ---------      ---------    --------- 
       <S>                              <C>            <C>          <C>      
       Tax at statutory rate            $ 162,709      $ 238,615    $ 244,169
       Increase (decrease) in taxes
        resulting from:
         State taxes, net of federal
          benefit                          27,736          5,533        9,097
         Non-deductible expenses            9,804         17,223       25,222
         Tax-exempt income                (18,008)       (18,173)     (15,381)
         Other                            (30,618)         3,011          772
                                        ---------      ---------    --------- 
       Provision for income taxes       $ 151,623      $ 246,209    $ 263,879
                                        =========      =========    =========
</TABLE> 

                                      33
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998

(9)    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,
                                                                  ---------------------------------------------
                                                                       1996            1997            1998
                                                                  ------------    ------------    -------------
<S>                                                               <C>             <C>             <C> 
       Difference from depreciation methods used
        for tax purposes and financial statements                 $     (1,435)   $     9,070     $      (1,347)
       Use of different methods for computing
        loan loss reserves for tax purposes and
        financial statements                                            19,735           (812)           (2,895)
       Difference from accretion methods used
        for mortgage-backed security discounts
        for tax purposes and financial statements                       (7,201)        (8,134)           (3,306)
       Federal Home Loan Bank stock
        dividends                                                        3,070              -            (4,773)
       Difference from cash basis accounting
        for tax purposes and accrual basis
        accounting for financial statements                           (125,998)       109,730           (31,683)
       Use of different methods for computing
        net deferred loan fees for tax purposes
        and financial statements                                        27,491          9,870            (3,185)
       Deferred compensation                                            (5,752)         5,025           (35,544)
       Unearned compensation                                           (29,566)       (19,301)            9,675
       Other book/tax differences                                        6,695         (4,342)           14,342
                                                                  ------------    -----------     -------------
         Increase (decrease) in deferred income taxes             $   (112,961)   $   101,106     $     (58,716)
                                                                  ============    ===========     =============
</TABLE> 

                                      34
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(9)   INCOME TAXES - (CONTINUED)
      --------------------------

      The components of deferred tax assets and liabilities consisted of:

<TABLE> 
<CAPTION> 
                                                                    SEPTEMBER 30,
                                                                ----------------------
                                                                   1997         1998 
                                                                ---------    ---------
      <S>                                                       <C>          <C>      
      Deferred tax assets:                       
       Reserve for loan losses                                  $  16,201    $  19,096
       Deferred compensation                                       34,216       69,760
       Unearned compensation                                       48,867       39,192
       Other                                                        4,342            -
                                                                ---------    ---------
        Total gross deferred tax assets                           103,626      128,048
                                                                ---------    ---------
                                                               
      Deferred tax liabilities:                                                           
       Tax depreciation in excess of book depreciation             28,440       27,093
       Federal Home Loan Bank stock dividends                      36,374       31,601
       Bad debt reserves for tax purposes in excess of                                    
        base year bad debt reserves                               155,474      155,474
       Cash basis conversion for tax purposes                     121,052       89,369
       Book accretion in excess of tax accretion                                          
        on mortgage-backed security discounts                      89,724       86,418
       Unrealized gains on investments                             32,121       18,074
       Deferred loan fees                                          53,314       50,129
       Other                                                            -       10,000 
                                                                ---------    ---------
        Total gross deferred tax liabilities                      516,499      468,158 
                                                                ---------    ---------
          Net deferred tax liabilities                          $ 412,873    $ 340,110
                                                                =========    =========
</TABLE> 


      Under the Internal Revenue Code, the Association, in determining taxable
      income, was allowed a special bad debt deduction based on a percentage of
      taxable income (8%) for 1996 or on specified experience formulas. In
      accordance with SFAS No. 109, a deferred tax liability has not been
      recognized for tax basis bad debt reserves of approximately $1,373,013 of
      the Association that arose in tax years that began prior to December 31,
      1987. At September 30, 1998, the amount of the deferred tax liability that
      had not been recognized was approximately $508,015. 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 institution," as defined by the Internal Revenue Code, or the
      bad debt reserves are used for any purpose other than absorbing bad debts.
      In August 1996, the above percentage of taxable income special bad debt
      deduction was repealed. All thrifts are required to recapture and pay tax
      on all or a portion of their bad debt reserves added since the last
      taxable year beginning before January 1, 1988 (the "base year").
      Institutions are required to recapture the excess of their bad debt
      reserves over the balance of the bad debt reserves outstanding at the end
      of the base year ratably over a six year period beginning with the first
      taxable year after December 31, 1995. Institutions can postpone the
      payment of these taxes for two years if they meet a residential loan
      requirement. This requirement is, generally, the institution's mortgage
      lending activity equaling or exceeding its average mortgage lending
      activity for the six taxable years preceding 1996, adjusted for inflation.
      As a result of the SFAS No. 109 recording described above, there will be
      no impact on the provision for federal income tax resulting from the
      recapture of the excess reserves. As the tax on the recapture is paid, the
      deferred tax liability will be reduced.
                                                                             
                                      35
<PAGE>
                        NS&L BANCORP, INC. AND SUBSIDIARY

                    NOTES TO CONSOUDATED FINANCIAL STATEMENTS
                    -----------------------------------------
                  YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998

(10)   CUSTOMER DEPOSITS
       -----------------

       Deposit account balances at September 30, 1997 and 1998, are summarized 
       as follows;
       
<TABLE> 
<CAPTION> 
                                                                  1997                      1998
                                                         --------------------       --------------------
                                                            AMOUNT        %            AMOUNT        %
                                                         ------------   -----       ------------   -----                     
         <S>                                            <C>            <C>         <C>            <C> 
          Non-interest bearing deposits                 $    398,307      .9       $    579,296     1.2     
          Interest-bearing checking accounts               5,949,863    13.6          7,335,785    15.3     
          Money market accounts                            3,087,506     7.0          2,583,749     5.4     
          Passbook savings                                 5,732,738    13.1          5,718,696    11.9     
          Certificates of deposit                         28,723,961    65.4         31,726,963    66.2     
                                                        ------------   -----       ------------   -----     
                                                        $ 43,892,375   100.0%      $ 47,944,489   100.0%              
                                                        ============   =====       ============   =====      
</TABLE> 

       The aggregate amount of jumbo certificates of deposit with a minimum
       denomination of $100,000 was approximately $991,982 and $1,796,692 at
       September 30, 1997 and 1998, respectively.

       At September 30, 1998 scheduled maturities of certificates of deposit are
       as follows:

<TABLE> 
                              <S>            <C> 
                                1999           $22,809,224
                                2000             5,985,661
                                2001             2,449,546
                                2002               469,438
                                2003                13,094
                                               -----------
                                               $31,726,963
                                               ===========
</TABLE> 

(11)   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:

<TABLE> 
<CAPTION> 
                                                                     1997             1998
                                                                 -----------     ------------
       <S>                                                       <C>             <C> 
       92 day, 5.66% fixed, interest payable
          at maturity, matured October 1997                      $ 2,000,000     $         -

       Ten year, 5.94% adjustable (FHLB DSM 1- year 
          cost of funds + .20%), interest payable
          monthly, matures November 2016                           1,000,000       1,000,000

       Fifteen year, 6.00% fixed, $8,439 due monthly                       
          including interest, matures June 2013                            -         989,633

       Fifteen year, 5.79% fixed, $8,326 due monthly                       
          including interest, matures August 2013                          -         996,499

       Fifteen year, 5.50% fixed, $8,171 due monthly                       
          including interest, matures September 2013                       -       1,000,000
                                                                 -----------     -----------
                                                                 $ 3,000,000     $ 3,986,132
                                                                 ===========     ===========
</TABLE> 

                                      36
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


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

       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 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:

<TABLE> 
<CAPTION> 
                                                        Aggregate
                                                         Annual
                Year Ended September30                 Maturities
                ----------------------                ------------
                <S>                                   <C> 
                       1999                           $    130,600    
                       2000                                138,300  
                       2001                                146,500  
                       2002                                155,100  
                       2003                                164,300   
                   Later Years                           3,251,332     
                                                      ------------ 
                                                      $  3,986,132   
                                                      ============ 
</TABLE> 


(12)   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 $9,403, $9,657
       and $10,581 for the years ended September 30, 1996, 1997 and 1998,
       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, 1996, 1997 and 1998 was $32,269, $17,354 and $30,473.

       Effective June 1, 1997, the Association adopted a deferred compensation
       plan for five outside directors. The directors will vest over a period of
       five 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 year ended September
       30, 1997 and 1998 was $8,664 and $25,992.

       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.

                                      37
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(12)   EMPLOYEE BENEFITS - (CONTINUED)
       -------------------------------
   
       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 ESOP borrowed funds from the
       Company in an amount sufficient to purchase 68,516 shares (8% of the
       Common Stock issued in the conversion). 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 seven years. As of September 30, 1998, the
       loan had an outstanding balance of $519,275 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 or 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 $87,454 in 1996, $109,793 in 1997
       and $122,070 in 1998.

                                      38
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------  
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(12)   EMPLOYEE BENEFITS - (CONTINUED)
       -------------------------------

       A summary of ESOP shares at September 30, 1998 is as follows:

<TABLE> 
          <S>                                  <C>      
          Allocated shares                        15,852 
                                                        
          Shares committed for release             6,848
                                                        
          Unreleased shares                       45,816
                                               --------- 
                                                        
           Total                                  68,516
                                               ========= 
          Fair value of unreleased shares      $ 703,688
</TABLE> 

       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
       trustees acquired 34,258 shares of the common stock of the Company, of
       which 28,865 shares have been awarded as of September 30, 1998. 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 $57,764, $73,519 and $74,074 of compensation 
       expense under the MRDP in 1996, 1997 and 1998.

(13)   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 85,645 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 1996 and 1997, respectively; risk-free interest rates of
       6.25% and 6.25%; dividend yields of 3.86% and 2.79%, 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.

                                      39
<PAGE>
                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------ 
                  YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(13)   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:
<TABLE> 
<CAPTION> 
                                       1996          1997         1998
                                    ---------     ---------    ---------
       <S>                          <C>           <C>          <C> 
       Pro forma net income         $ 312,903     $ 437,428    $ 434,093
                                    =========     =========    =========   

       Pro forma basic earnings        
        per share:                  $     .40     $     .65    $     .76   
                                    =========     =========    =========

       Pro forma diluted earnings
        per share:                  $     .40     $     .64    $     .73   
                                    =========     =========    =========
</TABLE> 
                                    

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

<TABLE> 
<CAPTION> 
                                                    1996                         1997                        1998
                                         ------------------------          -----------------------      ----------------------------
                                                    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                                  -  $            -             67,410  $        12.94         63,910   $      13.21
      Granted                              67,410           12.94              3,500           17.95              -              -
      Exercised                                 -               -             (1,000)          12.94              -              -
      Forfeited                                 -               -             (6,000)          12.94              -              -
                                         --------                          ---------                      ---------       

      Outstanding-end of year              67,410           12.94             63,910           13.21         63,910   $      13.21
                                         ========                          =========                      =========
                                         
      Exercisable at end of
       year                                     -               -             12,082           12.94         24,864          13.08

      Weighted-average fair 
       value of options
       granted during the
       year                              $   1.67                             $ 3.75                            N/A
</TABLE>
       
       Exercise prices for options outstanding as of September 30, 1998 ranged
       from $12.94 to $18.63. The weighted-average remaining contractual life of
       those options is 7.4 years.


                                      40

<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------  
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(14)   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> 
                                             1996                             1997                              1998
                               -------------------------------    ------------------------------    ----------------------------
                                                     PER SHARE                         PER SHARE                       PER SHARE
                                INCOME     SHARES      AMOUNT      INCOME     SHARES     AMOUNT      INCOME    SHARES    AMOUNT
                               --------   --------   ---------    --------   --------  ---------    -------- --------  ---------
<S>                            <C>        <C>        <C>          <C>        <C>       <C>          <C>      <C>       <C> 
       Basic EPS;
       Income available
         to Common
         Stockholders          $326,932    783,969     0.42       $455,599    671,559    0.68       $454,265  574,439      0.79
                                                       ====                              ====                              ==== 

       Effect of
         dilutive securities          -          -                       -     10,805                      -   16,580
                               --------   --------                --------    -------               -------- -------- 

       Diluted EPS:
         Income available to
         Stockholders plus
         stock options         $326,932    783,969     0.42       $455,599    682,364    0.67       $454,265  591,019      0.77
                               ========    =======     ====       ========    =======    ====       ========  =======      ====
</TABLE> 

(15)   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:

<TABLE> 
<CAPTION> 
                                                 1997              1998 
                                              ---------       -----------
<S>                                           <C>             <C>  
       Beginning balance                      $ 406,795       $   454,119
       Originations and advances                157,220           366,631
       Principal repayments                    (109,896)         (115,024)
                                              ---------       -----------
       Ending balance                         $ 454,119       $   705,726
                                              =========       ===========  
</TABLE> 

       Crawford Mortgage, Inc. leases office facilities from an officer of the
       corporation on a month-to-month basis. Current monthly rent is $1,500.
       Rent charged to operations for the years ended September 30, 1997 and
       1998 was $1,984 and $18,000, respectively.

                                      41

<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------  
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(16)  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 $1,397,760
           at September 30, 1998.

(17)  ADVERTISING COSTS
      -----------------

      The Company incurred $30,122, $31,140 and $42,422 in non-direct response
      advertising costs during the years ended September 30, 1996, 1997 and
      1998, respectively. The Company incurred no direct response advertising
      costs during the three years.

(18)  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, 1998, that
      the Association meets all capital adequacy requirements to which it is
      subject.

                                      42
<PAGE>
                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(18)    REGULATORY CAPITAL REQUIREMENTS - (CONTINUED)
        ---------------------------------------------

        As of September 30, 1998, the most recent notification from 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> 
                                                                                                  To Be Well-
                                                                                               Capitalized Under
                                                                      For Capital              Prompt Corrective
                                               Actual              Adequacy Purposes           Action Provisions
                                          ---------------          ------------------          -----------------
                                          Amount    Ratio          Amount       Ratio          Amount      Ratio
                                          ------    -----          -------      -----          ------      -----
                                                                   (Dollars in thousands)
<S>                                       <C>       <C>            <C>          <C>            <C>         <C> 
  As of September 30, 1997:
   Total Risk-Based Capital
    (to Risk-Weighted Assets)             8,837     34.8%    *     2,031   *    8.0%     *     2,539    *  10.0%
   Core Capital
    (to Adjusted Tangible Assets)         8,793     14.9%    *     1,769    *   3.0%      *    2,949     *  5.0%
   Tangible Capital
    (to Tangible Assets)                  8,793     14.9%    *       885    *   1.5%             N/A
   Tier 1 Capital
    (to Risk-Weighted Assets)             8,793     34.6%            N/A                  *    1,523     *  6.0%

  As of September 30, 1998:
   Total Risk-Based Capital
    (to Risk-Weighted Assets)             8,465     29.7%    *     2,279    *   8.0%      *    2,849     * 10.0%
   Core Capital
    (to Adjusted Tangible Assets)         8,413     13.4%    *     2,509    *   4.0%      *    3,136     *  5.0%
   Tangible Capital
    (to Tangible Assets)                  8,413     13.4%    *       941    *   1.5%            N/A
   Tier 1 Capital
    (to Risk-Weighted Assets)             8,413     29.5%            N/A                  *    1,710     *  6.0%
</TABLE>
 

* Greater than or equal to

(19)    DISCLOSURES ABOUT FAIR VALUE OF FINANCLAL 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.

        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.

                                      43
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


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

      Loans held for sale - These instruments are carried in the consolidated
      balance sheet 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. The carrying amount of accrued interest
      payable approximates its fair value.

      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. The carrying amount of
      accrued interest payable approximates its fair values.

      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.

      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.

                                      44
<PAGE>

                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


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

<TABLE> 
<CAPTION> 
                                                                           SEPTEMBER 30, 1997        
                                                                   ----------------------------------
                                                                      CARRYING              FAIR     
                                                                       AMOUNT               VALUE    
                                                                   -------------        -------------
      <S>                                                          <C>                  <C>          
      Financial assets:                                                                              
       Cash and cash equivalents                                   $   5,521,215        $   5,521,215
       Certificates of deposit                                           377,000              377,000
       Available-for-sale securities                                     266,813              266,813
       Held-to-maturity securities                                    13,052,211           13,039,195
       Investment in FHLB stock                                          420,600              420,600 
       Held-to-maturity mortgage-backed securities                     4,473,160            4,608,360
       Loans held for sale                                                31,060               31,000
       Loans, net of allowance for loan losses                        33,847,820           34,086,000
       Accrued interest receivable                                       454,206              454,206

      Financial liabilities:                                                                         
       Deposits                                                    $  43,892,375        $  43,847,000
       Federal Home Loan Bank advances                                 3,000,000            2,983,000
       Advances from borrowers for taxes and insurance                   317,548              317,548
      Unrecognized financial instruments                                                             
        (net of contract amount)                                                                     
        Commitments to extend credit                                           -                    -
        Letters of credit                                                      -                    -
        Unused lines of credit                                                 -                    -
<CAPTION>                                                                                            
                                                                           SEPTEMBER 30, 1998        
                                                                   ----------------------------------
                                                                      CARRYING              FAIR     
                                                                       AMOUNT               VALUE    
                                                                   -------------        -------------
      <S>                                                          <C>                  <C>          
      Financial assets:                                                                              
       Cash and cash equivalents                                   $  10,383,379        $  10,383,379
       Certificates of deposit                                           674,000              674,000
       Available-for-sale securities                                     203,850              203,850
       Held-to-maturity securities                                     9,401,155            9,701,638
       Investment in FHLB stock                                          365,400              365,400
       Held-to-maturity mortgage-backed securities                     3,121,405            3,205,626
       Loans held for sale                                                85,582               87,313
       Loans, net of allowance for loan losses                        37,420,586           37,811,000
       Accrued interest receivable                                       360,216              360,216

      Financial liabilities:                                                                         
       Deposits                                                    $  47,944,489        $  48,060,000
       Federal Home Loan Bank advances                                 3,986,132            4,181,000
       Advances from borrowers for taxes and insurance                   305,199              305,199
      Unrecognized financial instruments                                                             
        (net of contract amount)                                                                     
        Commitments to extend credit                                           -                    -
        Letters of credit                                                      -                    -
        Unused lines of credit                                                 -                    -
</TABLE> 

                                      45
<PAGE>

                        NS&L BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                  YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


(20)  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                                                       1997             1998 
                  ------                                                  ------------      ------------
     <S>                                                                  <C>               <C> 
     Cash                                                                 $ 1,738,200       $    855,589
     Certificates of deposit                                                  179,000             80,000
     Investment securities available-for-sale, at fair value                  266,813            203,850
     Investment in subsidiary                                               8,876,278          8,528,038
     Loan to ESOP                                                             574,346            519,275
     Land                                                                     302,865            302,865
     Due from subsidiary                                                       23,484              3,668
     Other assets                                                               1,830              7,667
                                                                          -----------       ------------
         Total assets                                                     $11,962,8l6       $ 10,500,952
                                                                          ===========       ============
                                                                                                          
     LIABILITIES AND STOCKHOLDERS' EQUITY                                                               
     ------------------------------------
     Accrued expenses                                                     $    17,791       $          -
     Accounts payable                                                               -                680
     Deferred income taxes, net                                                31,771             18,539
     Dividends payable                                                         88,959             77,105
     Stockholders' equity                                                  11,824,295         10,404,628
                                                                          -----------       ------------
         Total liabilities and stockholders' equity                       $11,962,816       $ 10,500,952
                                                                          ===========       ============
</TABLE> 

                                      46
<PAGE>
                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


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

                        CONDENSED STATEMENTS OF INCOME

<TABLE> 
<CAPTION> 
                                                       YEAR ENDED             YEAR ENDED         YEAR ENDED
                                                      SEPTEMBER 30,          SEPTEMBER 30,      SEPTEMBER 30,
                                                          1996                   1997               1998
                                                      -------------          -----------        ------------
      <S>                                             <C>                    <C>                <C> 
      Income
       Equity in earnings of subsidiary               $     227,933          $    375,058       $    421,452     
       Interest income                                      133,174               124,059             61,140     
       Dividend income                                        5,526                 8,806              6,916     
       Gain on sale of investments                           77,137                36,859             18,125      
       Other income                                               -                     -                715
                                                      -------------          ------------       ------------
        Total income                                        443,770               544,782            508,348
                                                      -------------          ------------       ------------

      Expenses
       Professional fees                                     29,639                19,422             15,304         
       Other                                                 28,260                25,895             25,824          
       Income tax                                            58,939                43,866             12,955          
                                                      -------------          ------------       ------------
        Total expenses                                      116,838                89,183             54,083
                                                      -------------          ------------       ------------
          Net income                                  $     326,932          $    455,599       $    454,265
                                                      =============          ============       ============ 
</TABLE> 

                      CONDENSED STATEMENTS OF CASH FLOWS

<TABLE> 
<CAPTION> 
                                                       YEAR ENDED             YEAR ENDED          YEAR ENDED
                                                      SEPTEMBER 30,          SEPTEMBER 30,       SEPTEMBER 30,
                                                          1996                   1997                1998
                                                      ------------           ------------        ------------
      <S>                                             <C>                    <C>                 <C>    
      Cash flows from operating activities:
       Net income                                     $    326,932           $    455,599        $    454,265
       Adjustments to reconcile net income
        to net cash provided by operating
        activities:
         Equity in earnings of subsidiary                 (227,933)              (375,058)           (421,452)
         Discounts on investment securities                    (57)                  (568)                  -
         Gain on sale of investments                       (77,137)               (36,859)            (18,125)
         Net change in operating accounts:
          Deferred income taxes, net                        13,576                (13,926)                815
          Other assets                                    (117,985)                93,977              13,979
          Liabilities                                       19,300                 (9,272)            (17,111)
                                                      ------------           ------------        ------------
           Net cash from (used in)
            operating activities                           (63,304)               113,893              12,371
                                                      ------------           ------------        ------------ 
</TABLE> 

                                      47
<PAGE>
                       NS&L BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                 YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998


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

<TABLE> 
<CAPTION> 
                                                        YEAR ENDED            YEAR ENDED           YEAR ENDED
                                                       SEPTEMBER 30,         SEPTEMBER 30,        SEPTEMBER 30,
                                                          1996                    1997                1998
                                                       ------------          ------------         ------------
       <S>                                             <C>                   <C>                  <C> 
       Cash flows from investing activities:
        Dividends from subsidiary                         2,000,000                     -            1,000,000
        Receipt of principal payment on
         ESOP loan                                           15,500                16,312               20,907
        Purchase of investment securities                (4,163,255)                    -                    -
        Proceeds from maturities of investments           2,900,000               500,000                    -
        Proceeds from sales of investments                  446,017               251,859               43,125
        Purchase of property and equipment                        -              (302,865)                   -
        Net change in certificates of deposit            (1,358,553)            1,229,553               99,000
                                                       ------------          ------------         ------------
         Net cash from (used in) investing
          activities                                       (160,291)            1,694,859            1,163,032
                                                       ------------          ------------         ------------

       Cash flows from financing activities:
        Net proceeds from issuance of
         common stock                                             -                12,938                    - 
        Cash dividends paid                                (356,865)             (330,856)            (311,963)
        Purchase of treasury stock                       (1,675,943)             (793,035)          (1,746,051)
                                                       ------------          ------------         ------------               
         Net cash used in financing
          activities                                     (2,032,808)           (1,110,953)          (2,058,014)
                                                       ------------          ------------         ------------    
       Net increase (decrease) in cash and
         cash equivalents                                (2,256,403)              697,799             (882,611)

       Cash and cash equivalents at
         beginning of period                              3,296,804             1,040,401            1,738,200
                                                       ------------          ------------         ------------

       Cash and cash equivalents at
         end of period                                 $  1,040,401          $  1,738,200         $    855,589
                                                       ============          ============         ============
</TABLE> 

                                      48
<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 30, 1998, there were 281
stockholders of record and 616,839 shares of common stock outstanding (including
unreleased ESOP shares of 45,816).  This does not reflect the number of persons
or entities who hold stock in nominee or "street name".  On September 17, 1998,
the Company declared a $.125 common stock dividend payable October 30, 1998 to
stockholders of record on October 15, 1998.  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.

<TABLE>
<CAPTION>

                                                FISCAL 1997                            FISCAL 1998
                                            -------------------                    -------------------
                                 High        Low       Dividend              High        Low        Dividend
                                 ----        ---       ---------             ----        ---        --------   
<S>                             <C>          <C>        <C>                  <C>        <C>         <C> 
First Quarter                   $14.00       $ 12.50    $0.125               $19.50     $ 18.25     $0.125
 
Second Quarter                  $16.75       $ 13.75    $0.125               $18.50     $17.375     $0.125
 
Third Quarter                   $17.25       $ 16.25    $0.125               $18.00     $17.375     $0.125
 
Fourth Quarter                  $19.50       $16.625    $0.125               $18.50     $15.359     $0.125
</TABLE>

                                       49
<PAGE>
 
                            DIRECTORS AND OFFICERS
<TABLE> 
<CAPTION> 
<S>                                            <C> 
NS&L BANCORP, INC.                             NEOSHO SAVINGS AND
                                               LOAN ASSOCIATION, F.A.

DIRECTORS:                                     DIRECTORS:

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 ad Chief Executive Officer           President
NS&L Bancorp, Inc.                             President 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 Appliance, Inc.                          Mills Appliance, Inc.

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

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> 

                                 

                                       50
<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
Washington, D.C.



________________________________________________________________________


ANNUAL MEETING

     The Annual Meeting of Stockholders will be held Wednesday, January 13,
1999, 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.

                                       51