SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)

[X]    Annual report pursuant to section 13 or 15 (d) of the Securities Exchange
       Act of 1934

       For the fiscal year ended March 31, 1999

[ ]    Transition  report  pursuant  to  section  13 or 15(d) of the  Securities
       Exchange Act of 1934

       For the transition period from                to             .
                                        ------------    ------------

Commission File No. 0-24468

                              GUTHRIE SAVINGS, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

Oklahoma                                                           73-1452383
---------------------------------------------                 ------------------
(State or Other Jurisdiction of Incorporation                    I.R.S. Employer
or Organization)                                              Identification No.

120 North Division, Guthrie, Oklahoma                                73044
-------------------------------------                         ------------------
(Address of Principal Executive Offices                            (Zip Code)

Issuer's Telephone Number, Including Area Code:                 (405) 282-2201
                                                              ------------------

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

Securities registered under to Section 12(g) of the Exchange Act:

                     Common Stock, par value $0.01 per share
                     ---------------------------------------
                                (Title of Class)

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

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

         State issuer's revenues for its most recent fiscal year:  $3.7 million

         The aggregate  market value of the voting stock held by  non-affiliates
of the  registrant,  based on an  estimate of the average bid and asked price of
the registrant's  common stock on June 23, 1999, was $4.9 million  (estimated at
$18.50 per share multiplied by 265,938 shares of common stock).

         As of June 23, 1999,  there were issued and outstanding  402,257 shares
of the registrant's common stock.

         Transition Small Business Disclosure Format (check one):
YES      NO  X
    ---     ---

                       DOCUMENTS INCORPORATED BY REFERENCE

          1.   Portions of the annual report to stockholders for the fiscal year
               ended March 31, 1999. (Parts II and III)

          2.   Portions  of the  proxy  statement  for  the  annual  meeting  of
               stockholders for the fiscal year ended March 31, 1999. (Part III)


<PAGE>






         Guthrie  Savings,  Inc.  (the  "Company" or "we") may from time to time
make  written  or  oral  "forward-looking   statements",   including  statements
contained in our filings with the Securities and Exchange Commission  (including
this  annual  report  on  Form  10-KSB  and its  exhibits),  in our  reports  to
stockholders  and in our  other  communications,  which  are made in good  faith
pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
Reform Act of 1995.

         These forward-looking statements involve risks and uncertainties,  such
as statements of our plans, objectives,  expectations, estimates and intentions,
that are subject to change based on various important factors (some of which are
beyond our  control).  The  following  factors,  among  others,  could cause our
financial   performance  to  differ  materially  from  the  plans,   objectives,
expectations,   estimates  and  intentions   expressed  in  the  forward-looking
statements:  the  strength  of the United  States  economy  in  general  and the
strength of the local economies in which we conduct operations;  the effects of,
and changes in, trade, monetary and fiscal policies and laws, including interest
rate  policies  of the  Board  of  Governors  of  the  Federal  Reserve  System,
inflation,   interest  rate,  market  and  monetary  fluctuations;   the  timely
development  of and  acceptance  of new products and services and the  perceived
overall value of these  products and services by users,  including the features,
pricing  and  quality  compared  to  competitors'  products  and  services;  the
willingness  of users to substitute  competitors'  products and services for our
products  and  services;  our  success in  gaining  regulatory  approval  of our
products  and  services,  when  required;  the impact of  changes  in  financial
services'  laws and  regulations  (including  laws  concerning  taxes,  banking,
securities  and  insurance);  technological  changes,  acquisitions;  changes in
consumer spending and saving habits; and our success in managing these factors.

         This list of important factors is not exclusive. We do not undertake to
update any forward-looking statement,  whether written or oral, that we may make
from time to time.

PART I

Item 1.  Description of Business
--------------------------------

Business of the Company

         We are an  Oklahoma-chartered  corporation organized in May 1994 at the
direction of Guthrie  Federal  Savings and Loan  Association in connection  with
that  association's  conversion  from the mutual to stock  form.  On October 11,
1994, the  association  completed its conversion and changed its name to Guthrie
Federal Savings Bank (the "Bank") and became our wholly owned subsidiary. We are
a unitary savings and loan holding company which, under existing laws, generally
is not  restricted  in the types of business  activities  in which we may engage
provided  the Bank retains a specified  amount of its assets in  housing-related
investments.  At March 31, 1999,  the Company had total  consolidated  assets of
$45.8  million and  stockholders'  equity of $7.4  million.  On May 26, 1999, we
signed and  announced  the execution of a Stock  Purchase  Agreement  with Local
Oklahoma Bank, N.A. ("Local Oklahoma"). The proposal that Local Oklahoma acquire
our stock and merge the Bank into Local Oklahoma will be considered for approval
by our  shareholders  at our annual meeting which is expected to be held in July
1999.

Business of the Bank

         The Bank is a federally  chartered stock savings bank  headquartered in
Guthrie,  Oklahoma.  The  Bank  was  founded  in 1906  with a  charter  from the
Territory  of  Oklahoma   under  the  name  of  "Employees   Building  and  Loan
Association."  Employees  Building and Loan Association became known as "Guthrie
Savings and Loan  Association" in 1968 when it changed its name. In early August
1994,  the Bank became


                                       2
<PAGE>

a  federal  association  under  the  name  "Guthrie  Federal  Savings  and  Loan
Association."  The Bank  changed  its name to Guthrie  Federal  Savings  Bank in
October of 1994 in connection with its conversion from mutual to stock form. The
Bank's deposits have been federally insured by the Savings Association Insurance
Fund  ("SAIF")  and its  predecessor,  the Federal  Savings  and Loan  Insurance
Corporation,  since 1948, and the Bank is a member of the Federal Home Loan Bank
(the "FHLB") System.

         The Bank is primarily  engaged in attracting  deposits from the general
public  and  using  those  funds  to  originate  real  estate  loans  on one- to
four-family residences and, to a lesser extent, consumer loans. The Bank has one
office in  Guthrie,  Oklahoma,  which is located in its  primary  market area of
Logan County, Oklahoma. In addition, the Bank holds interest-bearing deposits in
other  financial  institutions  and invests in  mortgage-backed  securities  and
investment   securities.   The  Bank  offers  its   customers   fixed-rate   and
adjustable-rate mortgage loans, as well as consumer loans, including home equity
and savings account loans.  Federal National Mortgage  Association  ("FNMA") and
Federal Home Loan Mortgage  Corporation  ("FHLMC") fixed-rate mortgage loans and
Federal  Housing  Administration/Veterans  Administration  ("FHA/VA")  loans are
originated  under a correspondent  banking  relationship  with mortgage  banking
companies.  Adjustable-rate  mortgage loans and  fixed-rate  mortgage loans with
terms of up to 30 years are  originated  for retention in the Bank's  portfolio.
All installment loans are retained in the Bank's portfolio.

         The Bank is subject to examination and comprehensive  regulation by the
Office of Thrift Supervision ("OTS") and its deposits are insured by the Federal
Deposit Insurance  Corporation  ("FDIC") under the SAIF. The Bank is a member of
and owns  capital  stock in the FHLB of Topeka,  which is one of the 12 regional
banks in the FHLB System.

         The principal  sources of funds for the Bank's  lending  activities are
deposits and the  amortization,  repayment,  and  maturity of loans,  investment
securities,  and  mortgage-backed  securities.  Principal  sources of income are
interest and fees on loans, mortgage-backed certificates, investment securities,
and deposits held in other financial institutions.  The Bank's principal expense
is interest paid on deposits.

Market Area and Competition

         Logan County,  Oklahoma is considered to be the Bank's  primary  market
area. Agriculture and the oil and gas industry dominate the economy.

         For over 90 years, the Bank has focused on serving its customers. These
customers  are located in the Oklahoma  communities  of Guthrie and  surrounding
communities in Logan County,  and to a lesser  extent,  the cities of Kingfisher
and  Stillwater  and parts of the Oklahoma  counties of Payne,  Kingfisher,  and
Oklahoma.  The Bank is one of five local  thrifts and  commercial  banks serving
Logan County.  Guthrie must also compete with credit unions and mortgage banking
companies located outside of Logan County.

         The  Bank  encounters  strong  competition  both in the  attraction  of
deposits  and  origination  of real estate and other  loans.  Competition  comes
primarily from five savings  institutions  and commercial  banks with offices in
Logan  County.  In addition,  the Bank  competes with credit unions and mortgage
banking  companies that operate in Logan County.  Due to their size, many of the
Bank's competitors possess greater financial and marketing  resources.  The Bank
competes for savings accounts by offering depositors  competitive interest rates
and a high level of personal service.


                                       3
<PAGE>

         Competition  for  mortgage  loans is not  limited  to  local  financial
institutions.  The Bank competes for loans primarily  through the interest rates
and loan fees it charges and the  efficiency and quality of services it provides
borrowers, real estate brokers and contractors.

         The  Bank's  market  place  has  seen  moderate  unemployment  and some
population  decline.  Because  of the  lack  of  economic  growth  and  stagnant
population,  the  Bank  has had to  invest  in  mortgage-backed  and  investment
securities.

Lending Activities

         General.   The  Bank's  loan   portfolio   predominantly   consists  of
adjustable-and   fixed-rate  mortgage  loans  secured  by  one-  to  four-family
residences  and,  to  a  lesser  extent,   land  and  lot   development   loans,
non-residential  loans,  and loans for other dwelling units. The Bank also makes
consumer loans, including automobile and savings account loans.

         Analysis of Loan  Portfolio.  Set forth below is selected data relating
to the  composition  of the Bank's  loan  portfolio  by type of loan and type of
security on the dates indicated:

<TABLE>
<CAPTION>
                                               1998                           1999
                                      -------------------------  ------------------------
                                           $             %            $            %
                                      ---------      ----------  --------      -----------
<S>                                   <C>            <C>        <C>            <C>
Type of Loan:
Real estate loans:
  Construction .....................   $  2,098         8.18%    $  1,630         6.55%
  Residential ......................     19,568        76.27       18,644        78.33
  Non-residential ..................      1,763         6.87        1,722         7.23
  Second mortgage and other equity .      1,267         4.94        1,121         4.71
Consumer loans:
  Savings account ..................        560         2.18          352         1.48
  Automobile .......................      1,457         5.68        1,615         6.79
  Other ............................        466         1.82          445         1.87
                                       --------       ------      -------       ------
    Gross loans ....................     27,179       105.94       25,529       107.26
Less:
  Loans in process .................     (1,098)       (4.28)      (1,332)       (5.60)
  Deferred loan origination fees and        (73)       (0.28)         (56)       (0.24)
costs
  Allowance for loan losses ........       (353)       (1.38)        (339)       (1.42)
                                       --------       ------     --------       ------
Total loans, net ...................   $ 25,655       100.00%    $ 23,802       100.00%
                                       ========       ======     ========       ======

Type of Security:
Residential real estate:
    1-4 family .....................   $ 21,961        85.60%    $ 20,081        84.37%
    Other dwelling units ...........        244          .95          222          .93
    Land ...........................        728         2.84        1,092         4.59
Non-residential ....................      1,763         6.87        1,722         7.23
Savings accounts ...................        560         2.18          352         1.48
Automobiles ........................      1,457         5.68        1,615         6.79
Other ..............................        466         1.82          445         1.87
Less:
  Loans in process .................     (1,098)       (4.28)      (1,332)       (5.60)
  Deferred loan origination fees and        (73)       (0.28)         (56)       (0.24)
costs
  Allowance for loan losses ........       (353)       (1.38)        (339)       (1.42)
                                       --------       ------     --------       ------
    Total loans, net ...............   $ 25,655       100.00%    $ 23,802       100.00%
                                       ========       ======     ========       ======
</TABLE>


                                       4

<PAGE>



Loan Maturity Tables

         The  following  table sets forth the  maturity  of the  Company's  loan
portfolio at March 31, 1999. The table does not include prepayments or scheduled
principal  repayments.  Prepayments and scheduled principal  repayments on loans
totalled  $6.2  million and $ 9.5 million for the years ended March 31, 1998 and
1999,  respectively.   The  increase  is  partially  attributable  to  increased
construction lending activities.  All mortgage loans are shown as maturing based
on contractual maturities.

<TABLE>
<CAPTION>
                                                         Other
                                      1-4 Family      Residential,
                                      Real Estate        Land,
                                        Mortgage      Commercial      Construction    Consumer          Total
                                        --------      ----------      ------------    --------          -----
                                                                    (In Thousands)
<S>                                     <C>              <C>             <C>           <C>            <C>
Non-performing                           $   306          $    -          $   --        $    6         $   312
Amounts Due:
1 Year or less                                22              38           1,630           510           2,200

After 1 year:
  1 to 5 years                               889             766              --         1,672           3,327
  Over 5 years                            17,457           2,009              --           224          19,690
                                          ------           -----           -----         ------         ------

Total due after one year                  18,346           2,775              --         1,896          23,017
                                          ------           -----           -----        ------          ------

Total amount due                         $18,674          $2,813          $1,630        $2,412         $25,529
                                          ======           =====           =====         =====          ======

Less:
Allowance for loan loss                                                                                   (339)
Loans in process                                                                                        (1,332)
Deferred loan fees                                                                                         (56)
                                                                                                        ------
  Loans receivable, net                                                                                $23,802
                                                                                                       =======


</TABLE>


                                       5
<PAGE>



         The following table sets forth the dollar amount of all loans due after
March 31,  2000 which have  pre-determined  fixed  interest  rates or which have
floating or adjustable interest rates.

                                                    Floating or
                                                    Adjustable
                               Fixed Rates             Rates             Total
                               -----------             -----             -----
                                                 (In Thousands)
One- to four-family........      $11,856              $ 6,490          $18,346
Other residential, land
  and commercial...........        1,953                  822            2,775
Construction...............           --                   --               --
Consumer...................        1,896                   --            1,896
                                   -----                -----            -----
  Total....................      $15,705               $7,312          $23,017
                                  ======                =====           ======

         Residential  Loans. The Bank's primary lending activity consists of the
origination of one- to four-family,  owner-occupied,  residential mortgage loans
secured by  property  located  in the Bank's  primary  market  area.  Management
believes  that this policy of focusing on one- to  four-family  lending has been
effective  in   contributing   to  net  interest   income  while   keeping  loan
delinquencies  and losses to a minimum.  The Bank also originates a small number
of residential real estate loans secured by multi-family dwellings.

         The Bank  currently  offers,  for  retention in its  portfolio  and for
correspondent  banks and mortgage banking companies,  adjustable-rate  mortgages
("ARMs")  that  adjust  every one and three  years and have terms from one to 30
years, and fixed-rate mortgage loans with terms of one to 30 years. The interest
rates on ARMs are based on treasury  bill rates and the national  cost of funds.
The Bank considers the market factors and competitive  rates on loans as well as
its own cost of funds  when  determining  the rates on the loans that it offers.
The Bank has a small  network of  correspondents  to whom the Bank refers  loans
that it does not  wish to  originate  for its  portfolio.  The  Bank  originates
adjustable-rate loans for its own loan portfolio. The Bank originates fixed-rate
loans with  terms of 30 years or less for its  portfolio.  The Bank also  refers
FHA/VA loans to its correspondents. Although the Bank only originates fixed rate
and  adjustable-rate  mortgage loans for its own  portfolio,  they are generally
underwritten to Federal Home Loan Mortgage Corporation ("FHLMC") standards.

         Generally, during periods of rising interest rates, the risk of default
on an ARM is  considered  to be greater than the risk of default on a fixed-rate
loan due to the upward  adjustment of interest costs to the borrower.  ARM loans
are made at up to 90% of the loan to value  ratio.  The Bank does not  originate
ARMs with negative amortization.

         Regulations  limit the amount  that a savings  association  may lend in
relationship  to the  appraised  value of the real estate  securing the loan, as
determined  by an appraisal at the time of loan  origination.  Such  regulations
permit a maximum  loan-to-value  ratio of 100% for residential  property and 90%
for all other real estate loans. The Bank's lending policies, however, generally
limit  the  maximum  loan-to-value  ratio to 80% of the  appraised  value of the
property, based on an independent or staff appraisal. When the Bank makes a loan
in excess of 80% of the  appraised  value or purchase  price,  private  mortgage
insurance  is  required  for at least the amount of the loan in excess of 80% of
the appraised value.

         The  loan-to-value  ratio,   maturity,  and  other  provisions  of  the
residential  real  estate  loans made by the Bank  reflect  the policy of making
loans generally below the maximum limits permitted under applicable regulations.
The Bank  requires an  independent  or staff  appraisal,  title  insurance or an
attorney's opinion

                                       6
<PAGE>

with an abstract, flood hazard insurance (if applicable),  and fire and casualty
insurance on all  properties  securing  real estate loans made by the Bank.  The
Bank  reserves  the right to approve  the  selection  of which  title  insurance
companies' policies are acceptable to insure real estate in loan transactions.

         While one- to  four-family  residential  real estate loans are normally
originated with one to 30 year terms,  such loans typically  remain  outstanding
for substantially  shorter periods because borrowers often prepay their loans in
full upon sale of the  property  pledged as  security  or upon  refinancing  the
original loan. In addition,  substantially all of the fixed-interest  rate loans
in the Bank's loan portfolio contain due-on-sale clauses providing that the Bank
may declare  the unpaid  amount due and  payable  upon the sale of the  property
securing the loan.  The Bank enforces  these  due-on-sale  clauses to the extent
permitted  by law.  Thus,  average  loan  maturity is a function of, among other
factors,  the level of purchase  and sale  activity  in the real estate  market,
prevailing interest rates and the interest rates payable on outstanding loans.

         Second Mortgage  Loans.  The Bank makes loans on real estate secured by
secondary, or junior,  mortgages.  Secondary mortgage loans possess greater risk
than primary  mortgage loans since the security  underlying the second  mortgage
loan must first be used to satisfy the  obligation  under the  primary  mortgage
loan. The Bank's lending  policies for second  mortgage loans secured by one- to
four-family  residences  are  similar  to  those  used  for  residential  loans,
including  the  required  loan-to-value  ratio.  The  Bank  does  not  currently
originate any second mortgage loans outside its primary market area.

         Land  Loans.  The Bank makes  loans  secured by  undeveloped  land,  in
amounts up to 65% of the  appraised  value of the land.  The loans are primarily
secured by lots in the Bank's  primary  market  area.  Although  those loans are
generally considered to be of a higher credit risk than home loans, the Bank has
not experienced a high rate of delinquencies.

         Consumer  Loans.  Consumer loans consist of personal  unsecured  loans,
home  improvement  loans,  automobile  loans and savings account loans, at fixed
rates.

         The  underwriting  standards  employed by the Bank for  consumer  loans
include a determination of the applicant's payment history on other debts and an
assessment of ability to meet existing  obligations and payments on the proposed
loan. In addition,  the stability of the applicant's monthly income from primary
employment is considered during the underwriting  process.  Creditworthiness  of
the applicant is of primary  consideration;  however,  the underwriting  process
also  includes a  comparison  of the value of the  security  in  relation to the
proposed loan amount.

         Consumer loans entail greater credit risk than do residential  mortgage
loans, particularly in the case of consumer loans which are unsecured or secured
by assets that depreciate rapidly, such as automobiles, mobile homes, boats, and
recreational  vehicles.  In such cases,  repossessed  collateral for a defaulted
consumer  loan  may  not  provide  an  adequate  source  of  repayment  for  the
outstanding  loan and the remaining  deficiency  often does not warrant  further
substantial  collection  efforts  against the borrower.  In particular,  amounts
realizable on the sale of repossessed  automobiles may be significantly  reduced
based  upon the  condition  of the  automobiles  and the lack of demand for used
automobiles.  The Bank  adds a  general  provision  to its  consumer  loan  loss
allowance,  based on general  economic  conditions,  prior loss  experience  and
management's periodic evaluation.

         Commercial  Real Estate Loans.  Loans secured by commercial real estate
are originated in amounts up to 80% of the appraised value of the property. Such
appraised value is determined by an independent appraiser previously approved by
the Bank. The Bank's commercial real estate loans are

                                       7
<PAGE>

permanent  loans secured by improved  property  such as small office  buildings,
retail stores, small strip plazas, and other non-residential buildings. The Bank
originates  commercial real estate loans with amortization  periods of one to 20
years, primarily as adjustable-rate mortgages.

         Loans secured by  commercial  real estate  generally  involve a greater
degree of risk than  residential  mortgage loans and carry larger loan balances.
This  increased  credit  risk is a result  of  several  factors,  including  the
concentration  of  principal  in a limited  number of loans and  borrowers,  the
effects of general economic conditions on income-producing  properties,  and the
increased  difficulty  of  evaluating  and  monitoring  these  types  of  loans.
Furthermore,  the  repayment  of loans  secured  by  commercial  real  estate is
typically  dependent  upon the  successful  operation of the related real estate
project. If the cash flow from the project is reduced, the borrower's ability to
repay the loan may be impaired.  At March 31, 1999, the largest  commercial real
estate loan was secured by  undeveloped  land and had a balance of $500,000  and
was current.

         Construction  Loans.  The Bank primarily  makes  construction  loans to
individuals to construct single-family  owner-occupied homes, for which the Bank
also  provides  permanent   financing.   Construction   financing  is  generally
considered to involve a higher degree of risk of loss than  long-term  financing
on  improved,  occupied  real  estate.  Risk of loss on a  construction  loan is
dependent  largely upon the accuracy of the initial  estimate of the  property's
value at completion  of  construction  or  development  and the  estimated  cost
(including interest) of construction. During the construction phase, a number of
factors  could  result  in  delays  and  cost  overruns.   If  the  estimate  of
construction costs proves to be inaccurate,  the Bank may be required to advance
funds  beyond  the  amount  originally  committed  to permit  completion  of the
development.  If the estimate of value proves to be inaccurate,  the Bank may be
confronted,  at or prior to the  maturity of the loan,  with a project  having a
value that is insufficient to assure full repayment.

         Loan  Purchases  and  Sales.  The Bank did not sell or  purchase  loans
during the year ended March 31,  1997.  During the year ended March 31, 1999 and
1998,  the Bank  purchased no loans and sold  $3,038,000  and $679,000 of loans,
respectively.  The Bank  primarily  sold 15- and 30-year fixed rate loans during
the years ended March 31, 1999 and 1998.  Rather than sell loans,  the Bank also
offers 30-year fixed rate mortgage loans that are  underwritten by correspondent
banks and mortgage banking companies. The Bank has generally not purchased loans
during the past five years.

         Loan  Commitments.  The Bank  issues  written,  formal  commitments  to
prospective borrowers on all real estate approved loans. The commitment requires
acceptance  within 10 days of the date of issuance.  For commercial  real estate
loans or commercial loans in general, the commitment is issued for approximately
10 days and must be closed within 30 days of issuance.  Commitments for consumer
loans expire 30 days after issuance. At March 31, 1999, the Bank had $210,000 in
commitments to originate mortgage loans.

         Loan Processing Fees. In addition to interest earned on loans, the Bank
recognizes  service  charges that consist  primarily of late  charges.  The Bank
recognized loan processing fees of $12,000 and $10,000 for the years ended March
31, 1998, and 1999, respectively.

         Loans to One  Borrower.  A savings  association  may not make a loan or
extend  credit to a single or related group of borrowers in excess of 15% of the
association's  unimpaired capital and surplus. An additional amount may be lent,
equal to 10% of unimpaired capital and surplus, under certain circumstances.


                                       8
<PAGE>

         Loan  Delinquencies.  Loans are  reviewed on a continual  basis and are
generally placed on a non-accrual status when the loan becomes more than 90 days
delinquent  and, in the opinion of  management,  the  collection  of  additional
interest is doubtful.  Interest  accrued and unpaid at the time a loan is placed
on non-accrual  status is charged against interest income.  Subsequent  interest
payments,  if any, are either applied to the  outstanding  principal  balance or
recorded  as  interest  income,  depending  on the  assessment  of the  ultimate
collectibility of the loan.

         Real estate  acquired by the Bank as a result of foreclosure or by deed
in lieu of foreclosure  is classified as foreclosed  real estate until such time
as it is sold. When  foreclosed  real estate is acquired,  it is recorded at the
lower of fair value or cost. Valuations are periodically performed by management
and  subsequent  charges to general  mortgage loan reserves are taken when it is
determined  that the carrying value of the property  exceeds the fair value less
estimated costs to sell.

         The following table sets forth information regarding non-accrual loans,
real estate owned,  and other  repossessed  assets and loans that are 90 days or
more  delinquent  but on which the  Company was  accruing  interest at the dates
indicated.

                                                                    At March 31,
                                                                    ------------
                                                                   1998     1999
                                                                   ----     ----
                                                          (Dollars in Thousands)
Loans accounted for on a non-accrual basis:
Mortgage loans:
  Permanent loans secured by 1-4 dwelling units ................   $200    $306
  All other mortgage loans .....................................    --      --
Non-mortgage loans:
  Commercial ...................................................    --      --
  Consumer .....................................................      4       6
                                                                   ----    ----
Total ..........................................................   $204    $312
                                                                   ====    ====

Accruing loans which are contractually past due 90 days or more:
Mortgage loans:
  Permanent loans secured by 1-4 dwelling units ................   $  0    $  0
  All other mortgage loans .....................................      0       0
                                                                   ----    ----
Total ..........................................................   $  0    $  0
                                                                   ====    ====
Total non-accrual and accrual loans ............................    204    $312
                                                                   ====    ====
Real estate owned ..............................................   $ 11    $  0
                                                                   ====    ====
Total nonperforming assets .....................................   $215    $312
                                                                   ====    ====
Total non-accrual and accrual loans to net loans ...............    .80%   1.31%
                                                                   ====    ====
Total non-accrual and accrual loans to total assets ............    .42%   0.68%
                                                                   ====    ====
Total nonperforming assets to total assets .....................    .44%   0.68%
                                                                   ====    ====

         Interest income that would have been recorded on renegotiated loans and
loans  accounted  for on a  non-accrual  basis under the original  terms of such
loans was  $21,600  and  $33,500  for the years  ended  March 31, 1998 and 1999,
respectively.  Amounts  foregone and not included in the Bank's  interest income
for the years  ended  March 31,  1998 and 1999  totalled  and $7,300 and $8,300,
respectively.

                                       9

<PAGE>



         Classified Assets. OTS regulations provide for a classification  system
for problem  assets of insured  institutions  which  covers all problem  assets.
Under this  classification  system,  problem assets of insured  institutions are
classified  as  "substandard,"  "doubtful,"  or "loss."  An asset is  considered
substandard if it is inadequately  protected by the current net worth and paying
capacity of the obligor or of the collateral pledged, if any. Substandard assets
include  those  characterized  by the  "distinct  possibility"  that the insured
institution  will sustain  "some loss" if the  deficiencies  are not  corrected.
Assets  classified  as  doubtful  have all of the  weaknesses  inherent in those
classified  substandard,  with the  added  characteristic  that  the  weaknesses
present  make  "collection  or  liquidation  in full," on the basis of currently
existing facts,  conditions and values,  "highly  questionable  and improbable."
Assets  classified  as loss are  those  considered  "uncollectible"  and of such
little value that their  continuance  as assets without the  establishment  of a
specific  loss  reserve  is not  warranted.  Assets may be  designated  "special
mention"   because  of  potential   weakness  that  do  not  currently   warrant
classification in one of the aforementioned  categories.  In addition,  the Bank
maintains  an  internal   "watchlist"  of  all  loans  that  were  removed  from
classification during the prior one-year period.

         When  an  insured  institution  classifies  problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan losses in
an amount  deemed  prudent by  management.  General  allowances  represent  loss
allowances which have been established to recognize the inherent risk associated
with lending activities,  but which, unlike specific  allowances,  have not been
allocated to particular problem assets. When an insured  institution  classifies
problem assets as loss, it is required either to establish a specific  allowance
for losses equal to 100% of that portion of the asset so classified or to charge
off such amount. An institution's  determination as to the classification of its
assets and the amount of its  valuation  allowances  is subject to review by the
OTS, which may order the  establishment  of additional  general or specific loss
allowances.  A portion of general loss allowances  established to cover possible
losses  related to assets  classified as substandard or doubtful may be included
in determining an institution's  regulatory  capital,  while specific  valuation
allowances for loan losses generally do not qualify as regulatory capital.

         Real  Estate  Owned.  Real  estate  acquired by the Bank as a result of
foreclosure or by deed in lieu of foreclosure is classified as real estate owned
until it is sold.  When  property is acquired it is recorded at the lower of the
cost or fair value.

         The Bank held $0 in real estate owned at March 31, 1999.

         Allowance for Loan and Real Estate Losses. It is management's policy to
provide for losses on  unidentified  loans in its loan  portfolio and foreclosed
real  estate.  A  provision  for loan losses is charged to  operations  based on
management's  evaluation  of the  potential  losses  that may be incurred in the
Bank's loan portfolio. Such evaluation,  which includes a review of all loans of
which full  collectibility  of  interest  and  principal  may not be  reasonably
assured,  considers,  among other matters, the estimated net realizable value of
the underlying  collateral.  During the years ended March 31, 1998 and 1999, the
Bank charged $3,000 and $6,500,  respectively,  to the provision for loan losses
and $0 and $0,  respectively,  to the  provision for losses on real estate owned
and other repossessed assets.

         Management  will  continue  to review  the  entire  loan  portfolio  to
determine the extent, if any, to which further additional loss provisions may be
deemed  necessary.  There can be no assurance that the allowance for losses will
be adequate to cover losses which may in fact be realized in the future and that
significant additional provisions for losses will not be required.


                                       10
<PAGE>



         The  distribution  of the Bank's  allowance  for losses on loans at the
dates indicated is summarized as follows:

                                                At March 31,
                              --------------------------------------------------
                                     1998                        1999
                              ------------------------   -----------------------
                                        Percent of                  Percent of
                                       Loans in Each               Loans in Each
                                        Category to                 Category to
                              Amount    Total Loan       Amount     Total Loans
                              ------    ----------       ------     -----------
                                            (Dollars in Thousands)

Residential real estate        $247        84.38%          $243       83.80%
Commercial real estate           26         6.48             26        6.75
Consumer ..............          80         9.14             70        9.45
                               ----       ------            ---      ------

Total .................        $353       100.00%          $339      100.00%
                               ====       ======            ===      ======


         The following table sets forth  information  with respect to the Bank's
allowance  for loan  losses  at the  dates  indicated:

                                                              At March  31,
                                                       -------------------------
                                                          1998         1999
                                                          ----         ----
                                                        (Dollars in Thousands)

Total loans outstanding, net ........................   $ 25,655     $ 23,802
                                                        ========     ========
Average loans outstanding ...........................   $ 24,619     $ 25,018
                                                        ========     ========

Allowance balances (at beginning of period) .........        377          353

Provision (credit):
  Residential .......................................          0            0
  Consumer ..........................................          3            7
                                                        --------     --------
                                                               3            7
                                                        --------     --------
Charge-offs:
  Residential .......................................         (9)          (8)
  Consumer ..........................................        (25)         (16)
                                                        --------     --------
                                                             (34)         (24)
                                                        --------     --------
Recoveries:
   Residential ......................................          0            0
  Consumer ..........................................          7            3
                                                        --------     --------
                                                               7            3
                                                        --------     --------
Net (charge-offs) recoveries ........................        (27)         (21)
                                                        --------     --------
Allowance balance (at end of period) ................   $    353     $    339
                                                        ========     ========
Allowance for loan losses as a percent of total loans
  outstanding, net ..................................       1.38%        1.43%
Net loans charged off as a percent of average loans
  outstanding .......................................       0.11%        0.08%



                                       11
<PAGE>

         The following table sets forth  information  with respect to the Bank's
allowance  for losses on real estate owned and other  repossessed  assets at the
dates indicated:

                                                       At March 31,
                                                   ------------------
                                                    1998        1999
                                                    ----        ----
                                                  (Dollars in Thousands)
Total real estate owned and other
  repossessed assets, net ...................        $11         $ 0
                                                     ===         ===

Allowance balances-beginning ................        $ 0         $ 0
Provision ...................................          0           0
Net charge-offs .............................          0           0
                                                     ---         ---
Allowance balances - ending .................        $ 0         $ 0
                                                     ===         ===

Allowance for losses on real estate owned and
  other repossessed assets to net real estate
  owned and other repossessed assets ........          0%          0%
                                                     ===         ===

Mortgage-Backed Securities and Investment Activities

         General.  The Bank is required under federal  regulations to maintain a
minimum  amount of liquid  assets which may be invested in specified  short-term
securities and certain other  investments.  The Bank has generally  maintained a
liquidity portfolio well in excess of regulatory requirements.  Liquidity levels
may  be  increased  or  decreased   depending  upon  the  yields  on  investment
alternatives  and upon  management's  judgment as to the  attractiveness  of the
yields then available in relation to other  opportunities and its expectation of
future yield levels,  as well as  management's  projections as to the short-term
demand for funds to be used in the Bank's loan origination and other activities.
At March 31, 1999, the Bank had an investment  portfolio of  approximately  $1.6
million,  consisting  primarily  of U.S.  government  agency  obligations,  U.S.
Treasury  securities,  and FHLB stock, as permitted by the OTS regulations.  The
Bank has found its level of investment  securities has increased in recent years
as  a  result  of  repayments  and  prepayments  on  loans  and  mortgage-backed
securities  exceeding  loan  demand.  The Bank has  invested in  mortgage-backed
securities to offset this excess  liquidity  principally in Government  National
Mortgage  Association  ("GNMA")  ARMs,  Federal  National  Mortgage  Association
("FNMA") ARMs, and FHLMC ARMs.

         The Financial  Accounting Standards Board ("FASB") has issued Statement
of  Financial  Accounting  Standards  ("SFAS") No. 115  "Accounting  for Certain
Investments  in Debt and Equity  Securities.  SFAS No. 115  requires the Bank to
classify all of its  investments  in debt and equity  securities  ("securities")
into three categories.  Debt securities which management has the positive intent
and ability to hold until  maturity are to be  classified  as  held-to-maturity.
Securities that are bought and held  principally for the purpose of selling them
in  the  near  term  are to be  classified  as  trading  securities.  All  other
securities are to be classified as available-for-sale securities.

         Unrealized  holding gains and losses for trading  securities  are to be
included  in  earnings.  Unrealized  gains  and  losses  for  available-for-sale
securities  are to be excluded  from  earnings  and  reported


                                       12
<PAGE>

net of income tax effect as a separate  component of shareholders'  equity until
realized.  Investments classified as held-to-maturity are to be accounted for at
amortized cost.

         SFAS No. 115  requires the Bank to account for a portion of its holding
of debt securities at market value (as opposed to amortized cost) and may result
in  greater  volatility  in its  earnings  and  capital  position.  It also  may
discourage investment in longer term debt securities,  which tend to have higher
yields than  short-term  debt  securities,  and hence reduce the earnings of the
Bank.  No  securities  can be moved from a  particular  category  without  Board
approval.

         The market value of investments and mortgage-backed  securities held to
maturity at March 31, 1999,  was $1.0 million and $11.5  million,  respectively,
resulting in a net unrealized loss on investments  held to maturity at such date
of $1,000 and a net realized gain on mortgage-backed securities held-to-maturity
of $47,000 at such date. The Bank anticipates  having the ability to fund all of
its investing  activities from funds held on deposit at FHLB of Topeka. The Bank
will  continue  to seek high  quality  investments  with  short to  intermediate
maturities  and  duration  from  one to five  years.  At  March  31,  1999,  the
securities classified as available for sale had a carrying value of $648,000 net
of an unrealized loss of $0.

Mortgage-Backed Securities

         To supplement  lending  activities in periods of deposit  growth and/or
declining  loan demand,  the Bank has increased its  investments  in residential
mortgage-backed  securities  during recent years.  Although such  securities are
held for investment,  they can serve as collateral for borrowings  and,  through
repayments, as a source of liquidity.

         The  mortgage-backed   securities  portfolio  as  of  March  31,  1999,
consisted  primarily  of  adjustable-rate  certificates  issued  by FHLMC  ($1.0
million),  GNMA ($2.6 million),  and FNMA ($1.6 million). To a lesser extent the
mortgage  backed  securities  portfolio  also contains  fixed-rate  certificates
issued by FHLMC,  GNMA,  and FNMA.  At March 31,  1999,  the  carrying  value of
mortgage-backed  securities totalled $7.9 million or 17.37% of total assets. The
market value of such securities totalled approximately $7.9 million at March 31,
1999,  resulting  in  a  net  unrealized  loss  of  $9,000  in  this  portfolio.
Additionally,  as of March 31, 1999, the Bank held investments in collateralized
mortgage obligations amounting to $3.5 million,  which had an unrealized gain of
$56,000.

         Mortgage-backed securities represent a participation interest in a pool
of single-family or multi-family mortgages,  the principal and interest payments
on which  are  passed  from the  mortgage  originators,  through  intermediaries
(generally   quasi-governmental   agencies)   that   pool  and   repackage   the
participation  interests in the form of  securities,  to  investors  such as the
Bank. Such quasi-governmental agencies, which guarantee the payment of principal
and interest to investors, primarily include FHLMC, FNMA, and GNMA.

         FHLMC is a corporation  chartered by the United States  Government  and
owned  by  the  12  Federal  Home  Loan  Banks  and  federally  insured  savings
institutions.  FHLMC issues  participation  certificates  backed  principally by
conventional mortgage loans. FHLMC guarantees the timely payment of interest and
the ultimate return of principal  within one year. FHLMC securities are indirect
obligations  of the  United  States  Government.  FNMA is a private  corporation
chartered  by  Congress  with a mandate  to  establish  a  secondary  market for
conventional mortgage loans. FNMA guarantees the timely payment of principal and
interest,  and FNMA  securities  are indirect  obligations  of the United States
Government.  GNMA is a government  agency  within the  Department of Housing and
Urban Development  ("HUD")

                                       13
<PAGE>

which is intended to help finance  government  assisted housing  programs.  GNMA
guarantees the timely payment of principal and interest, and GNMA securities are
backed by the full  faith and  credit of the  United  States  Government.  Since
FHLMC,  FNMA  and  GNMA  were  established  to  provide  support  for  low-  and
middle-income  housing,  there are  limits  to the  maximum  size of loans  that
qualify  for these  programs.  GNMA limits its  maximum  loan size for  Veterans
Administration  ("VA") loans and for Federal  Housing  Authority  ("FHA") loans.
FNMA and FHLMC limit their loans. To accommodate  larger-sized  loans, and loans
that,  for other  reasons,  do not conform to the agency  programs,  a number of
private  institutions  have  established  their own  home-loan  origination  and
securitization programs.

         Mortgage-backed  securities  typically are issued with stated principal
amounts,  and the  securities  are backed by pools of mortgages  that have loans
with  interest  rates that are within a range and have varying  maturities.  The
underlying pool of mortgages can be composed of either  fixed-rate  mortgages or
adjustable-rate  mortgage  loans.   Mortgage-backed   securities  are  generally
referred to as mortgage participation certificates or pass-through certificates.
As a result,  the interest rate risk  characteristics  of the underlying pool of
mortgages (i.e.,  fixed rate or adjustable rate) as well as prepayment risk, are
passed on to the certificate holder. The life of a mortgage-backed  pass-through
security  is  equal  to the life of the  underlying  mortgages.  Mortgage-backed
securities  issued  by  FHLMC,  FNMA,  and  GNMA  make  up  a  majority  of  the
pass-through market.

         The collateralized  mortgage  obligations ("CMOs") (in the form of real
estate  mortgage  investment  conduits)  held by  Registrant  at March 31,  1999
totaled  $3.5 million and  consisted  of CMOs issued by FHLMC,  FNMA and private
issuers.  The aggregate  book value of CMOs issued by any one private issuer did
not exceed 10% of stockholders'  equity at March 31, 1999 or 1998. The portfolio
of CMOs held in the Company's mortgage-backed  securities portfolio at March 31,
1999 did not include any residual interests in CMOs. Further, at March 31, 1999,
the  Company's   mortgage-backed   securities  portfolio  did  not  include  any
"stripped" CMOs (i.e., CMOs that pay interest only and do not repay principal or
CMOs that repay principal only and do not pay interest).

                                       14
<PAGE>



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



                               At March 31,          Weighted
                            -------------------    Average Rate
                               1998     1999       March 31, 1999
                            --------  ---------    --------------
                          (Dollars in Thousands)
Held to Maturity:
 GNMA ARMs ..............   $ 2,920   $ 2,589           6.61%
 FNMA ARMs ..............     1,324     1,593           6.12
 FHLMC ARMs .............     1,255     1,030           5.95
 FHLMC-fixed rate .......     1,253       886           6.88
 FNMA-fixed rate ........       559     1,690           6.50
 GNMA-fixed rate ........       310       161           8.00
 Collateralized mortgage
   obligations-government
   agency issue .........     4,994     3,511           6.15
                            -------   -------
 Total mortgage-backed
   securities ...........   $12,615   $11,460           6.37
                            =======   =======

         Mortgage-Backed Securities Maturity. The following table sets forth the
maturity of the  Company's  mortgage-backed  securities  portfolio  at March 31,
1999.  The table does not include  scheduled  principal  payments  or  estimated
prepayments.  All  mortgage-backed  securities  are shown as  maturing  based on
contractual maturities.

                                                  Contractual
                                                 Maturities Due
                                                 --------------
                                                 (In Thousands)
                Less than 1 year ...............   $    --
                1 to 3 years ...................       198
                3 to 5 years ...................       396
                5 to 10 years ..................       200
                10 to 20 years .................     2,370
                Over 20 years ..................     8,296
                                                   -------
                Total mortgage-backed securities   $11,460
                                                   =======


         Investment Portfolio. The following table sets forth the carrying value
of the Company's investment securities portfolio,  short-term  investments,  and
FHLB stock, at the dates  indicated.  At March 31, 1999, the market value of the
Company's investment securities portfolio was $1.6 million.


                                       15
<PAGE>

                                                            At March 31,
                                                            ------------
                                                           1998     1999
                                                           ----     ----
                                                           (In Thousands)
        Investment Securities:
          Held to Maturity:
              U.S. Agency Securities (1)..                $3,900   $1,000
                                                          ------   ------
                 Total Debt Securities....                 3,900    1,000
                                                          ------   ------
          Available for Sale:
            U.S. Agency Securities .......                 1,495     --
            FHLB Stock ...................                   680      648
                                                          ------   ------
                                                           2,175      648
                                                          ------   ------
              Total Investments ..........                $6,075   $1,648
                                                          ======   ======

-------------------
(1)      Consists of bonds and notes issued by the FHLB and FNMA.




                                       16
<PAGE>



Investment Portfolio Maturities

         The  following  table  sets forth  certain  information  regarding  the
carrying values,  weighted average yields,  and maturities of the Company's debt
securities portfolio at March 31, 1999.


<TABLE>
<CAPTION>
                                                                     As of March 31, 1999
                               --------------------------------------------------------------------------------------------------
                                                                                          More than
                                 One Year or Less  One to Five Years  Five to Ten Years   Ten Years      Total Debt Securities
                               ------------------  ----------------- ------------------ -------------- --------------------------
                                Carrying  Average  Carrying Average Carrying  Average Carrying Average  Carrying Average  Market
                                 Value     Yield     Value   Yield   Value     Yield   Value    Yield    Value    Yield    Value
                               ---------  -------  -------- ------  ------    ------  ------   ------   ------   ------   -----
                                                                  (Dollars in Thousands)'
<S>                            <C>        <C>      <C>     <C>     <C>       <C>     <C>      <C>      <C>      <C>       <C>
Held to maturity:
  U.S. Agency Securities.....   $     --    --%      $500    5.93%   $500      7.00%   $  --    --%     $1,000   6.46%     $999
                                --------   ---       ----    ----    ----      ----     ----   ---      ------   ----      ----
      Total..................   $     --    --%      $500    5.93%   $500      7.00%   $  --    --%     $1,000   6.46%     $999
                                ========   ===       ====    ====     ===      ====     ====   ===      ======   ====       ===

</TABLE>



                                       17
<PAGE>






Sources of Funds

         General.  Deposits are the major source of the Bank's funds for lending
and other  investment  purposes.  The Bank derives funds from  amortization  and
prepayment  of loans and  mortgage-backed  securities,  maturities of investment
securities, and operations. Scheduled loan principal repayments are a relatively
stable source of funds,  while deposit inflows and outflows and loan prepayments
are  significantly  influenced by general interest rates and market  conditions.
The Bank may also utilize  advances from the FHLB of Topeka and other borrowings
as a source of funds.

         Deposits.  Consumer and commercial  deposits are attracted  principally
from  within the Bank's  primary  market area  through  the  offering of a broad
selection  of deposit  instruments  including  regular  savings,  demand and NOW
accounts, and term certificate accounts (including negotiated jumbo certificates
in denominations  of $100,000 or more).  Deposit account terms vary according to
the minimum balance required,  the time period the funds must remain on deposit,
and the interest rate, among other factors.

         Jumbo   Certificate   Accounts.   The  following  table  indicates  the
approximate amount of the Company's  certificate accounts of $100,000 or more by
time remaining until maturity as of March 31, 1999.

                                                   Certificates
                                                     Accounts
                                                     --------
           Maturity Period                        (In Thousands)
           ---------------
           Within three months ..........              $  343
           Over three through six months                  300
           Over six through twelve months                 723
           Over twelve months ...........                 310
                                                        -----
                 Total ..................              $1,676
                                                       ======


Borrowings

         Deposits  are the  primary  source of funds of the Bank's  lending  and
investment activities and for its general business purposes. The Bank may obtain
advances  from the FHLB of Topeka to  supplement  its supply of lendable  funds.
Advances  from the FHLB of Topeka would  typically be secured by a pledge of the
Bank's  stock in the FHLB of Topeka and a portion of the Bank's  first  mortgage
loans and certain  other assets.  The Bank, if the need arises,  may also access
the Federal  Reserve Bank discount  window to supplement  its supply of lendable
funds and to meet deposit withdrawal requirements.  At March 31, 1999 Registrant
had $3.0 million  outstanding  from the FHLB of Topeka and no  borrowings of any
other kind.

         To supplement  lending  activities in periods of deposit  growth and/or
declining  loan demand,  the Bank has increased its  investments  in residential
mortgage-backed  securities.  Although such  securities are held for investment,
they can serve as collateral for borrowings and, through repayments, as a source
of liquidity.


                                       18
<PAGE>

         The following table sets forth certain information regarding short-term
borrowings  by the  Company  at the end of and  during  the  periods  indicated,
consisting of amounts borrowed under a line of credit with the FHLB of Topeka.

                                                At or For the Year Ended
                                                          March 31,
                                                   ----------------------
                                                        1998     1999
                                                        ----     ----
                                                   (Dollars in Thousands)

        Weighted average rate paid .............        5.66%     -- %
        Maximum amount of borrowings outstanding
          at any month end .....................   $   2,000   $  --
        Approximate average short-term
          borrowings outstanding ...............   $     442   $  --
        Approximate weighted average rate (1) ..        5.66%     -- %


---------------
(1)  Average balances represent the arithmetic average of month-end balances.

Subsidiary Activity

         The  Company has one  wholly-owned  subsidiary,  the Bank.  The Bank is
permitted  to invest up to 2% of its assets in the capital  stock of, or secured
or unsecured loans to, subsidiary corporations, with an additional investment of
1% of assets when such additional investment is utilized primarily for community
development purposes. As of March 31, 1999, the Bank had no subsidiaries.

Employees

         Substantially  all  of the  activities  of the  Company  are  conducted
through the Bank,  therefore,  at March 31,  1999,  the Company did not have any
salaried employees.

         As of March  31,  1999,  the Bank had 15  full-time  employees  and two
part-time  employees.  None  of  the  Bank's  employees  are  represented  by  a
collective  bargaining  group. The Bank believes that its relationship  with its
employees is good.

Regulation

         Set forth below is a brief description of certain laws which related to
the regulation of the Company and the Bank. The  description is not complete and
is qualified in its entirety by reference to applicable laws and regulations.

Company Regulation

         General.  The  Company is a unitary  savings and loan  holding  company
subject to regulatory  oversight by the OTS. As such, the Company is required to
register  and  file  reports  with  the OTS and is  subject  to  regulation  and
examination by the OTS. In addition,  the OTS has enforcement authority over the
Company and its non-savings association  subsidiaries,  should such subsidiaries
be formed,  which also permits the OTS to restrict or prohibit  activities  that
are determined to be a serious risk to the subsidiary

                                       19
<PAGE>

savings association. This regulation and oversight is intended primarily for the
protection of the depositors of the Bank and not for the benefit of stockholders
of the Company.

         Qualified  Thrift  Lender Test.  As a unitary  savings and loan holding
company, the Company generally is not subject to activity restrictions, provided
the Bank  satisfies  the  Qualified  Thrift  Lender  ("QTL")  test or a somewhat
similar  test for  domestic  building  and  loan  associations.  If the  Company
acquires  control of another savings  association as a separate  subsidiary,  it
would become a multiple savings and loan holding company,  and the activities of
the  Company  and any of its  subsidiaries  (other  than the  Bank or any  other
SAIF-insured   savings   association)   would  become  subject  to  restrictions
applicable to bank holding  companies unless such other  associations  each also
qualifies as a QTL or domestic  building and loan  association and were acquired
in a supervisory  acquisition.  See "- Regulation of the Bank - Qualified Thrift
Lender Test."

Regulation of the Bank

         General. As a federally  chartered,  SAIF-insured  savings association,
the Bank is subject to extensive  regulation by the OTS and the Federal  Deposit
Insurance  Corporation  ("FDIC").  Lending activities and other investments must
comply with various federal statutory and regulatory  requirements.  The Bank is
also subject to certain reserve requirements  promulgated by the Federal Reserve
Board.

         The OTS, in conjunction with the FDIC,  regularly examines the Bank and
prepares  reports for the  consideration of the Bank's Board of Directors on any
deficiencies that are found in the Bank's  operations.  The Bank's  relationship
with its depositors and borrowers is also regulated to a great extent by federal
and state law,  especially in such matters as the ownership of savings  accounts
and the form and content of the Bank's mortgage documents.

         The Bank must file  reports  with the OTS and the FDIC  concerning  its
activities  and  financial  condition,   in  addition  to  obtaining  regulatory
approvals  prior to entering into certain  transactions  such as mergers with or
acquisitions  of other savings  institutions.  This  regulation and  supervision
establishes a comprehensive  framework of activities in which an institution can
engage and is intended  primarily for the protection of the SAIF and depositors.
The  regulatory  structure  also  gives  the  regulatory  authorities  extensive
discretion in connection with their  supervisory and enforcement  activities and
examination  policies,  including policies with respect to the classification of
assets and the  establishment  of adequate  loan loss  reserves  for  regulatory
purposes.  Any change in such regulations,  whether by the OTS, the FDIC, or the
Congress  could have a material  adverse  impact on the Company,  the Bank,  and
their operations.

         Insurance of Deposit  Accounts.  The deposit  accounts held by the Bank
are insured by the SAIF to a maximum of  $100,000  for each  insured  member (as
defined by law and  regulation).  Insurance of deposits may be terminated by the
FDIC  upon a finding  that the  institution  has  engaged  in unsafe or  unsound
practices,  is in an unsafe or unsound  condition to continue  operations or has
violated any applicable law, regulation, rule, order or condition imposed by the
FDIC or the institution's primary regulator.

         A member of the SAIF pays an annual insurance premium to the FDIC of at
least 0.064% of total deposits of that member.  The FDIC also maintains  another
insurance  fund,  the Bank  Insurance  Fund  ("BIF"),  which  primarily  insures
commercial bank deposits. Most members of BIF pay a lower premium to the FDIC.


                                       20
<PAGE>

         After 1999, assessments for BIF and SAIF members should be the same. It
is expected that these continuing assessments for both SAIF and BIF members will
be used to repay outstanding Financing Corporation bond obligations.

         Regulatory  Capital  Requirements.   OTS  capital  regulations  require
savings  associations to meet three capital  standards:  (1) a tangible  capital
requirement  of 1.5% of  total  adjusted  assets,  (2) a  leverage  ratio  (core
capital) requirement of 3% of total adjusted assets and (3) a risk-based capital
requirement equal to 8% of total risk-weighted assets.  Beginning April 1, 1999,
the core capital  requirement was raised to 4% of total adjusted assets for most
savings associations.  Regulations that enable the OTS to take prompt corrective
action  against   savings   associations   effectively   impose  higher  capital
requirements on savings associations.

         Dividend and Other Capital Distribution Limitations. The Bank must give
the OTS 30 days advance  notice of any proposed  declaration of dividends to the
Company,  and the OTS has the authority under its supervisory powers to prohibit
the payment of dividends to the Company.  In addition,  the Bank may not declare
or pay a cash dividend on its capital stock if the dividend would (1) reduce the
regulatory  capital of the Bank below the amount  required  for the  liquidation
account  established in connection with the conversion from mutual to stock form
or (2) reduce the amount of capital of the Bank below the  amounts  required  in
accordance  with other OTS  regulations.  In  contrast,  the  Company  has fewer
restrictions on dividends.

         Qualified Thrift Lender Test. Savings institutions must meet either the
QTL test pursuant to OTS  regulations or the  definition of a domestic  building
and loan  association  in section  7701 of the Code.  If the Bank  maintains  an
appropriate  level  of  certain  specified  investments  (primarily  residential
mortgages   and  related   investments,   including   certain   mortgage-related
securities)  and  otherwise  qualifies as a QTL or a domestic  building and loan
association,  it will continue to enjoy full borrowing  privileges from the FHLB
of Topeka.  The required  percentage of investments under the QTL test is 65% of
assets while the Code  requires  investments  of 60% of assets.  As of March 31,
1999, the Bank was in compliance with its QTL requirement and met the definition
of a domestic building and loan association.

Item 2. Description of Property
-------------------------------

(a)      Properties.

         The Company does not own real  property but utilizes the offices of the
Bank. The Bank operates from its office located at 120 North Division,  Guthrie,
Oklahoma.  The Bank owns this office  facility  which was opened in 1975 and has
6,000 square feet.

(b)      Investment Policies.

         See "Item 1.  Business"  above for a general  description of the Bank's
investment  policies and any  regulatory  or Board of  Directors'  percentage of
assets limitations  regarding certain investments.  All of the Bank's investment
policies are  reviewed  and approved by the Board of Directors of the Bank,  and
such  policies,  subject to  regulatory  restrictions  (if any),  can be changed
without a vote of stockholders. The Bank's investments are primarily acquired to
produce income, and to a lesser extent, possible capital gain.

         (1)  Investments in Real Estate or Interests in Real Estate.  See "Item
1.  Description  of  Business - Lending  Activities,"  "Item 1.  Description  of
Business - Regulation of the Bank," and "Item 2.  Description  of Property.  (a)
Properties" above.



                                       21
<PAGE>

         (2) Investments in Real Estate  Mortgages.  See "Item 1. Description of
Business - Lending Activities" and "Item 1. Description of Business - Regulation
of the Bank."

         (3)  Investments  in  Securities  of or Interests in Persons  Primarily
Engaged  in Real  Estate  Activities.  See "Item 1.  Description  of  Business -
Lending Activities," "Item 1. Description of Business - Regulation of the Bank,"
and "Item 1. Description of Business - Subsidiary Activity."

(c)      Description of Real Estate and Operating Data.

         Not Applicable.

Item 3. Legal Proceedings
-------------------------

         There are  various  claims and  lawsuits  in which we are  periodically
involved,  such  as  claims  to  enforce  liens,   condemnation  proceedings  on
properties in which we hold security interests,  claims involving the making and
servicing of real property loans, and other issues incident to our business.  In
the opinion of management,  no material loss is expected from any pending claims
or lawsuits.

Item  4.  Submission of Matters to a Vote of Security Holders
-------------------------------------------------------------

         No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year.

                                     PART II

Item  5.  Market for Common Equity and Related Stockholder Matters
------------------------------------------------------------------

         The  information  contained  under  the  section  captioned  "Corporate
Profile and Stock Price Information" on page 2 of the Company's Annual Report to
Stockholders for the fiscal year ended March 31, 1999 (the "Annual Report"),  is
incorporated herein by reference.

Item  6.  Management's Discussion and Analysis or Plan of Operation
-------------------------------------------------------------------

         The  information  contained  in  the  section  captioned  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations"  on
pages 6 to 18 of the Annual Report is incorporated herein by reference.

Item  7.  Financial Statements
------------------------------

         The  Registrant's   financial  statements  listed  under  Item  13  are
incorporated herein by reference.

Item 8.  Changes  in  and  Disagreements  with  Accountants  On  Accounting  and
         Financial Disclosure
--------------------------------------------------------------------------------

         There  were  no  changes  in  or  disagreements   with  accountants  on
accounting and financial disclosure during the last fiscal year.


                                       22
<PAGE>

                                    PART III


Item 9. Directors Executive Officers, Promoters and Control Persons: Compliance
-------------------------------------------------------------------------------
        with Section 16(a) of the Exchange Act.
        ---------------------------------------

         The  information  contained under the section  captioned  "Proposal I -
Election  of  Director  --Information  with  Respect  to Nominee  for  Director,
Directors  Continuing  in Office,  and Executive  Officers" in the  Registrant's
definitive proxy statement for the  Registrant's  Annual Meeting of Stockholders
expected to be held in July 1999 (the "Proxy Statement") is incorporated herein
by reference.

         Additional information concerning executive officers is included in the
Proxy Statement in the section  captioned  "Section 16(a)  Beneficial  Ownership
Reporting Compliance."

Item 10.  Executive Compensation
--------------------------------

         The  information  contained  in the section  captioned  "Directors  and
Executive Officer Compensation" in the Proxy Statement is incorporated herein by
reference.

Item 11.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

         (a)      Security Ownership of Certain Beneficial Owners

                  Information  required by this item is  incorporated  herein by
                  reference  to the section  captioned  "Voting  Securities  and
                  Principal Holders Thereof" in the Proxy Statement.

         (b)      Security Ownership of Management

                  Information  required by this item is  incorporated  herein by
                  reference  to the  chart  in  the  section  captioned  "Voting
                  Securities  and  Principal  Holders  Thereof" and to the first
                  chart  in  the  section  captioned  "Information  with Respect
                  to the Nominee for Director,  Directors  Continuing in Office,
                  and Executive Officers" in the Proxy Statement.

         (c)      Information  required  by  this item is incorporated herein by
                  reference to the section captioned "Proposal III - Proposal to
                  Approve Stock Purchase Agreement" in the Proxy Statement.

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

         The  information  required  by this  item  is  incorporated  herein  by
reference  to  the  section   captioned   "Certain   Relationships  and  Related
Transactions" in the Proxy Statement.

Item 13. Exhibits, List and Reports on Form 8-K
-----------------------------------------------

         (a)      The following documents are filed as a part of this report:

                                       23
<PAGE>

                  1.  The  following  financial  statements  and the  report  of
independent  accountants of the Registrant  included in the Registrant's  Annual
Report  to  Stockholders  for  the  fiscal  year  ending  March  31,  1999,  are
incorporated herein by reference and also in Item 7 of this report.

         Report of Independent Auditors

         Consolidated Statements of Financial Condition as of March 31, 1999 and
1998.

         Consolidated  Statements  of  Operations  for the Years Ended March 31,
1999, 1998, and 1997.

         Consolidated  Statements  of  Comprehensive  Income for the Years Ended
March 31, 1999, 1998 and 1997.

         Consolidated  Statements  of  Stockholders'  Equity for the Years Ended
March 31, 1999, 1998, and 1997.

         Consolidated  Statements  of Cash Flows for the Years  Ended  March 31,
1999, 1998, and 1997.

         Notes to Consolidated Financial Statements.

                  2. Financial  Statement  Schedules for which provision is made
in  the  applicable  accounting  regulations  of  the  Securities  and  Exchange
Commission  ("SEC")  are not  required  under the  related  instructions  or are
inapplicable and therefore have been omitted.

                  3. The  following  exhibits  are  included  in this  Report or
incorporated herein by reference:
<TABLE>
<CAPTION>
                <S>       <C>
                   3(i)    Certificate of Incorporation of Guthrie Savings, Inc.*

                   3(ii)   Bylaws of Guthrie Savings, Inc.*

                  10.1     Employment Agreement with William Cunningham**

                  10.2     Employment Agreement with H. Stephen Ochs**

                  10.3     Employment Agreement with Kathleen A. Warner**

                  10.4     1994 Stock Option Plan***

                  10.5     Management Stock Bonus Plan***

                  10.6     Indemnification Agreement from Guthrie Savings, Inc.***

                  10.7     Indemnification Agreement from Guthrie Federal Savings Bank***

                  10.8     Severance Agreement with William Cunningham


</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                 <S>      <C>
                  10.9     Severance Agreement with H. Stephen Ochs

                  10.10    Severance Agreement with Kathleen A. Warner

                  13       Annual Report to Stockholders for the fiscal year ended March 31, 1999

                  21       Subsidiaries of the Registrant****

                  23       Consent of Regier Carr & Monroe, L.L.P.

                  27       Financial Data Schedule*****
</TABLE>

         (b)      A report on Form 8-K (Item 7),  dated  January 14,  1999,  was
                  filed during the last quarter of the fiscal year to report the
                  declaration of a special cash dividend ($0.50 per share).

---------------------
*     Incorporated by reference to the same exhibit  number of the  registration
      statement on Form S-1 (File No. 33-90286) declared effective by the SEC on
      August 12, 1994.
**    Incorporated by reference to the same exhibit  number of the Annual Report
      on Form 10-KSB for the fiscal year ended March 31, 1998 (File No. 0-24468)
      filed with the SEC.
***   Incorporated by reference to the same exhibit  number of the Annual Report
      on Form 10-KSB for the fiscal year ended March 31, 1997 (File No. 0-24468)
      filed with the SEC.
****  Incorporated  by reference to Exhibit 21 of the Annual Report on Form 10-K
      for the fiscal year ended March 31, 1995 (File No. 0-24468) filed with the
      SEC.
***** Filed in electronic format only.




                                       25

<PAGE>



                                   SIGNATURES

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

                                               GUTHRIE SAVINGS, INC.



Dated:  June 28, 1999                          By:/s/ William L. Cunningham
                                                  ------------------------------
                                                  William L. Cunningham
                                                  President, Chief Executive
                                                  Officer, and Director (Duly
                                                  Authorized Representative)

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

<TABLE>
<CAPTION>
<S>     <C>                                         <C>      <C>
By:      /s/ William L. Cunningham                   By:
---------------------------------------------        --------------------------------------------
         William L. Cunningham                                H. Stephen Ochs
         President, Chief Executive Officer,                  Vice President and Director
           and Director (Principal Executive
           Officer)

Date:    June 28, 1999                                        Date:    ______________


By:      /s/ Keith Camerer                           By:      /s/ James V. Seaman
---------------------------------------------        --------------------------------------------
         Keith Camerer                                        James V. Seamans
         Director                                             Director

Date:    June 28, 1999                                        Date:    June 28, 1999


By:      /s/ Alvin R. Powell, Jr.                    By:      /s/ Kimberly D. Walker
---------------------------------------------        --------------------------------------------
         Alvin R. Powell, Jr.                                 Kimberly D. Walker
         Director                                             Treasurer (Principal Accounting and
                                                                and Financial Officer)

Date:    June 28, 1999                                        Date:    June 28, 1999

</TABLE>