<page> 1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-QSB

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

(Mark One)

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ending             June 30, 2001
                                -------------------------------------

                                       or

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES EXCHANGE ACT OF 1934


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

Commission File Number                 0-25814
                      ---------------------------------------------------

                              N S & L Bancorp, Inc.
                              ---------------------
             (Exact name of registrant as specified in its charter)

          Missouri                                          43-1709446
--------------------------------------                -----------------------
(State or other jurisdiction of I.R.S.                  (I.R.S. Employer
Employer Incorporation or organization)                 Identification No.)

     P.O. Box 369, Neosho, MO                                    64850
-------------------------------------------                   -----------
(Address of principal executive offices)                      (Zip Code)

        (417) 451-0429
---------------------------------
(Registrant's telephone number)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                         Yes X   No
                                            ---     ---


AS OF AUGUST 2, 2001, THERE WERE 646,884 SHARES OF THE REGISTRANT'S COMMON
STOCK, $.01 PAR VALUE PER SHARE, OUTSTANDING.

<page> 2



                      N S & L BANCORP, INC. AND SUBSIDIARY
                                   FORM 10-QSB
                                  JUNE 30, 2001

INDEX                                                                      PAGE
-----                                                                      ----

PART I-FINANCIAL INFORMATION
----------------------------

ITEM 1 - FINANCIAL STATEMENTS
-----------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)                  1-2

CONSOLIDATED STATEMENTS OF INCOME (unaudited)                               3-4

CONSOLIDATED STATEMENTS OF COMPRESHENSIVE INCOME (unaudited)                  5

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)                           6-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)                     8-10

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS                              11-16



PART II - OTHER INFORMATION
---------------------------

ITEM 1.  LEGAL PROCEEDINGS                                                   17

ITEM 2.  CHANGES IN SECURITIES                                               17

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                     17

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITIES
         HOLDERS                                                             17

ITEM 5.  OTHER INFORMATION                                                   17

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                    17


SIGNATURES


<page> 3
<table>
<caption>


                      N S & L BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
       ------------------------------------------------------------------

                                                                         (Unaudited)
                                                                 JUNE 30,           SEPTEMBER 30,
                                                                   2001                 2000
                                                                ---------            ----------
                                                                     (Dollars in thousands)
                  ASSETS
                  ------

                                                           <c>                <c>
Cash and cash equivalents, including
 interest-bearing accounts of $15,513 at                      $  15,914          $      2,982
 June 30, 2001 and $2,437 at September 30, 2000
Certificates of deposit                                              80                    80
Investment securities available-for-sale, at fair value              93                   173
Investment securities held-to-maturity
 (estimated market value of $9,641 at June 30, 2001
 and $19,243 at September 30, 2000)                               9,522                19,639
Investment in Federal Home Loan Bank stock, at cost                 657                   657
Mortgage-backed securities held-to-maturity
 (estimated market value of $2,511 at June 30, 2001
  and $2,924 at September 30, 2000.)                              2,434                 2,907
Loans held for sale                                               1,206                   386
Loans receivable, net (reserves for loan losses of $66
 at June 30, 2001 and $63 at September 30, 2000)                 41,838                44,091
Income taxes recoverable-current                                     16                    --
Accrued interest receivable                                         430                   560
Property and equipment, less accumulated
 depreciation                                                     1,071                 1,063
Intangible assets                                                    73                    75
Other assets                                                        246                   196
                                                     ------------------         -------------

   Total assets                                      $           73,580         $      72,809
                                                     ==================         =============


LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Customers deposits                                   $           56,957         $      48,257
Advances from FHLB                                                5,508                13,117
Advances from borrowers for taxes and insurance                     304                   379
Income taxes payable - current                                       --                    81
Deferred income taxes                                               261                   290
Other Liabilities                                                   509                   561
                                                     ------------------         -------------
  Total liabilities                                              63,539                62,685
                                                     ------------------         -------------


Commitments and contingencies                                        --                    --

              See accompanying notes to Consolidated Financial Statements.


                                           1
</table>

<page> 4
<table>
<caption>



                      N S & L BANCORP, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED)
       ------------------------------------------------------------------

                                                                     (Unaudited)
                                                              JUNE 30,         SEPTEMBER 30,
                                                                2001               2000
                                                              ---------         ----------
                                                                   (Dollars in thousands)

LIABILITIES AND STOCKHOLDERS' EQUITY (Continued)
------------------------------------------------

                                                      <c>                   <c>
Preferred stock, $.01 par value; 2,000,000 shares
  authorized, none issued                                           --                  --
Common stock, $.01 par value; 8,000,000 shares
  authorized, 1,013,941 issued and 646,884 outstanding
  at June 30, 2001 and 664,946
  outstanding at September 30, 2000                                 10                  10
Paid-in capital                                                 10,397              10,389
Retained earnings - substantially restricted                     5,122               5,051
Treasury Stock - at cost; 367,057 shares at June 30,
  2001 and 347,495 at September 30, 2000                        (5,171)             (4,960)
Unearned compensation                                             (325)               (375)

Accumulated other comprehensive income                               8                   9
                                                         -------------         -----------
  Total stockholders' equity                                    10,041              10,124
                                                         -------------         -----------

    Total liabilities and stockholders' equity           $      73,580         $    72,809
                                                         =============         ===========

</table>





          See accompanying notes to Consolidated Financial Statements.


                                       2


<page> 5
<table>
<caption>


                      N S & L BANCORP, INC. AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF INCOME
       ------------------------------------------------------------------

                                                   (Unaudited)
                                    QUARTER ENDED JUNE 30,    NINE MONTHS ENDED JUNE 30,
                                       2001          2000        2001             2000
                                   ------------  -----------  -----------      ----------
                                    (Dollars in thousands)       (Dollars in thousands)


                                <c>            <c>          <c>            <c>
Interest Income:
 Loan receivable                   $     931      $    818     $  2,720       $   2,391
 Investment securities                   189           327          821             978
 Mortgage-backed and
  related securities                      50            53          156             135
 Other interest-earning assets            96            30          151             100
                                   ---------      --------     --------       ---------
   Total interest income               1,266         1,228        3,848           3,604
                                   =========      ========     ========       =========

Interest Expense:
 Customer deposits                       657           533        1,867           1,590
 Borrowed funds                           93           172          458             410
                                   ---------      --------     --------       ---------
    Total interest expense               750           705        2,325           2,000
                                   ---------      --------     --------       ---------

 Net interest income                     516           523        1,523           1,604

Provision for loan losses                  5           (4)            9               8
                                   ---------      --------     --------       ---------
 Net interest income after
   provision for loan losses             511           527        1,514           1,596
                                   ---------      --------     --------       ---------

Noninterest Income:
 Gain on sale of investments              --            --           24              --
 Gain on sale of loans                    55            29          109              45
 Banking service charges
   and fees                               79            56          194             157
 Loan late charges                         4             2           11               7
 Mortgage banking fees                    44            36          107              85
 Other                                     8             3           14               7
                                   ---------      --------     --------       ---------

   Total non interest income             190           126          459             301
                                   ---------      --------     --------       ---------

Non interest Expense:
 Compensation and
  employee benefits                      309           286          863             806
 Occupancy and equipment                  46            47          138             141
 Deposit insurance premium                 2             3            7              13
 Data processing                          37            31          111              99


          See accompanying notes to Consolidated Financial Statements.

</table>

                                       3


<page> 6
<table>
<caption>



                      N S & L BANCORP, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)
          ------------------------------------------------------------

                                                  (Unaudited)
                                        QUARTER ENDED JUNE 30,   NINE MONTHS ENDED JUNE 30,
                                          2001         2000       2001          2000
                                        ---------    ---------   --------      ---------
                                        (Dollars in thousands)    (Dollars in thousands)


                                     <c>         <c>        <c>           <c>
 Printing , postage, stationery
   and supplies                               28        15           72          53
 Professional fees                            12        13           45          40
 Advertising                                  23        13           56          41
 Other                                        55        52          159         147
                                        --------    ------     --------        ----
    Total noninterest expense                512       460        1,451       1,340
                                        --------    ------     --------       -----

    Income before taxes                      189       193          522         557

Income Taxes                                  64        53          169         184
                                        --------    ------     --------        ----

Net income                              $    125    $  140     $    353      $  373
                                        ========    ======     ========      ======

Basic earnings per share                $   .20     $  .22     $   .57       $  .56
                                        =======     ======     =======       ======

Diluted earnings per share              $   .20     $  .22     $   .57       $  .56
                                        =======     ======     =======       ======

Dividend per share                      $ .1125     $  .16     $ .4325       $  .48
                                        =======     ======     =======       ======
</table>


          See accompanying notes to Consolidated Financial Statements.



                                        4




<page> 7
<table>
<caption>


                      N S & L BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
           ----------------------------------------------------------

                                                          (Unaudited)
                                              QUARTER ENDED JUNE 30,    NINE MONTHS ENDED JUNE 30,
                                                2001          2000         2001          2000
                                              --------      --------     --------      --------
                                               (Dollars in thousands)    (Dollars in thousands)


                                            <c>          <c>          <c>           <c>
Net income                                     $    125     $   140      $   353       $    373

Unrealized gains (losses) on securities:
 Gains (losses) arising during
  period, net of tax                                  1          (5)          14            (17)
Reclassification
  adjustment, net of tax                             --          --          (15)            --
                                               --------      -------     --------      ---------
Other comprehensive
  income (loss)                                       1          (5)          (1)           (17)
                                               --------      -------     --------      ---------
Comprehensive income                           $    126      $  135      $   352       $    356
                                               ========      =======     ========      =========


</table>



              See accompanying notes to Consolidated Financial Statements.


                                       5


<page> 8



                      N S & L BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
       ------------------------------------------------------------------
                    NINE MONTHS ENDED JUNE 30, 2001 AND 2000

                                                                (Unaudited)
                                                             2001         2000
                                                          ---------    ---------
                                                          (Dollars in thousands)


Cash flows from operating activities:
  Net income                                               $    353    $    373
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation                                               60          64
      Amortization                                                2           2
      Premiums and discounts on mortgage-backed
        securities and investment securities                    (71)        (59)
      Origination of loans held for sale                    (12,205)     (2,733)
      Proceeds from sale of loans held for sale              11,494       2,731
      Loss on loans, net of recoveries                            9           8
      Release of ESOP shares                                     30          64
      Vesting of MRDP shares                                     28          61
      Gain on sale of loans                                    (109)        (45)
      Gain on sale of investments                               (24)         --
      Net change in operating accounts:
        Accrued interest receivable                             130         (30)
        Other assets                                            (50)         11
        Other liabilities                                       (19)        121
        Income taxes payable - deferred                         (30)        (16)
        Income taxes payable - current                          (97)        124
                                                           --------    --------
          Net cash from (used in) operating activities         (499)        676
                                                           --------    --------

Cash flows from investing activities:
Proceeds from sales of investment securities
     available-for-sale                                         105          --
  Purchase of investment securities held-to-maturity             --        (498)
  Proceeds from maturities of investment securities
     held-to-maturity                                        10,181         750
  Net change in certificates of deposit                          --       1,584
  Net change in loan receivable                               2,244      (3,384)
  Proceeds from principal payments and maturities
    of mortgage-backed securities held-to-maturity              480         496
  Purchase of mortgage-backed securities held-to-maturity        --      (1,109)
  Purchases of property and equipment                           (68)        (20)
                                                           --------    --------
      Net cash from (used in) investing activities         $ 12,942    $ (2,181)
                                                           --------    --------

          See accompanying notes to Consolidated Financial Statements.



                                       6

<page> 9



                      N S & L BANCORP, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
       ------------------------------------------------------------------
                    NINE MONTHS ENDED JUNE 30, 2001 AND 2000

                                                              (Unaudited)
                                                          2001           2000
                                                        -------        --------
                                                        (Dollars in thousands)



Cash flows from financing activities:
  Net change in demand deposits, savings
    accounts, and certificates of deposit              $  8,700      $ (3,307)
  Net decrease in mortgage escrow funds                     (75)          (56)
  Cash advances from FHLB                                    --         6,100
  Repayment of cash advances from FHLB                   (7,609)         (303)
  Purchase of treasury stock                               (211)         (710)
  Cash dividends paid                                      (316)         (344)
                                                       --------      --------
    Net cash from financing activities                      489         1,380
                                                       --------      --------

Net increase (decrease) in cash and
  cash equivalents                                       12,932          (125)

Cash and cash equivalents -
  beginning of period                                     2,982         2,317
                                                       --------      --------

Cash and cash equivalents -
  end of period                                        $ 15,914      $  2,192
                                                       ========      ========


          See accompanying notes to Consolidated Financial Statements.



                                       7


<page> 10

                      N S & L BANCORP, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A - Basis of Presentation
------------------------------

The consolidated interim financial statements as of June 30, 2001 included in
this report have been prepared by the Registrant without audit. In the opinion
of management, all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation are reflected in the June 30, 2001 interim
financial statements. The results of operations for the period ended June 30,
2001 and 2000 are not necessarily indicative of the operating results for the
full year. The September 30, 2000 Consolidated Statement of Financial Condition
presented with the interim financial statements was audited and received an
unqualified opinion.

NOTE B - 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.
<table>
<caption>
                                             FOR THE THREE MONTHS ENDED JUNE 30,
                                             2001                           2000
                                             ----                           ----
                                     Income        Shares      Per-Share   Income      Shares      Per-Share
                                  (Numerator)   (Denominator)    Amount  (Numerator) (Denominator)   Amount
                                  -----------   -------------   -------  ----------- -------------  --------

                                 <c>            <c>           <c>      <c>           <c>           <c>
Basic EPS:
Income available to
 Common Stockholders                $125,000       612,983       $.20     $140,000      640,085       $.22

Effect of dilutive securities:
Stock options                             --         8,889                      --           --
                                    --------      --------                --------      -------
Diluted EPS:
Income available to common
  stockholders plus stock
  options                           $125,000       621,872       $.20     $140,000      640,085       $.22
                                    ========      ========       ====     ========      =======       ====
</table>
<table>
<caption>
                                              FOR THE NINE MONTHS ENDED JUNE 30
                                             2001                           2000
                                             ----                           ----
                                     Income        Shares      Per-Share   Income      Shares      Per-Share
                                  (Numerator)   (Denominator)    Amount  (Numerator) (Denominator)   Amount
                                  -----------   -------------   -------  ----------- -------------  --------

                                 <c>            <c>           <c>      <c>           <c>           <c>
Basic EPS:
Income available to
 Common Stockholders                $353,000       620,327       $.57     $373,000      662,716       $.56

Effect of dilutive securities:
Stock options                             --            --                      --           --

Diluted EPS:
Income available to common
  stockholders plus stock
  options                           $353,000       620,327       $.57     $373,000      662,716       $.56
                                    ========       =======       ====     ========      =======       ====
</table>

                                                    8

<page> 11



                      N S & L BANCORP, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)


NOTE C - Employee Stock Ownership Plan
--------------------------------------

The Company established an internally - leveraged ESOP for the exclusive benefit
of participating employees ( all salaried employees who have completed at least
1000 hours of service in a twelve-month period and have attained the age of 21).
The loan is secured by the shares purchased and will be repaid by the
contributions to the ESOP and any other earnings on ESOP assets. The Association
presently expects to contribute approximately $106,762 including interest
annually to the ESOP. Contributions will be applied to repay interest on the
loan first, then the remainder will be applied to principal. The loan is
expected to be repaid in approximately five years. As of June 30, 2001, the loan
had an outstanding balance of $393,819 and an interest rate of 9%.

Shares purchased with the loan proceeds are held in a suspense account for
allocation among participants as the loan is repaid. Contributions to the ESOP
and shares released from the suspense account are allocated among participants
in proportion to their compensation relative to total compensation of all active
participants. Benefits generally become 25% vested after each year of credited
service beyond one year. Vesting is accelerated upon retirement, death or
disability or separation of 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 a part of 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 Company 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 expense was $15,975 and $21,179 for the three months
ended June 30, 2001 and 2000 and $47,115 and $64,550 for the nine months ended
June 30, 2001 and 2000 respectively.

A summary of ESOP shares at June 30, 2001 is as follows:

Shares allocated                                                   43,674

Shares committed for release                                        6,162

Unreleased shares                                                  32,383
                                                                   ------

   Total                                                           82,219
                                                                   ======

Fair value of unreleased shares                                  $453,362





                                       9


<page> 12



                      N S & L BANCORP, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)


NOTE D - Management Recognition and Development Plan and Stock Option Plan
--------------------------------------------------------------------------

The 1995 Management Recognition and Development Plan ("MRDP") was approved by
the stockholders on January 17, 1996. The MRDP is administered by the Board of
Directors of the Company. Collectively, the Board issued 41,109 shares of the
Company's common stock, of which currently there are 39,138 shares awarded to
employees at a cost of $426,745. The MRDP shares are vesting and being expensed
over a five-year period. The value of the common stock contributed to the MRDP
is amortized to compensation expense as the shares vest. MRDP expense was $2,987
and $20,206 for the three months ended June 30, 2001 and 2000 and $28,024 and
$60,618 for the nine months ended June 30, 2001 and 2000 respectively.

Also adopted on January 17, 1996 was a Stock Option plan whereby 102,774 shares
of the Company's common stock have been reserved to be awarded to certain
officers employees and directors. The Stock Option Plan is administered by a
committee of the Board of Directors. All options expire no later than ten years
from the date of grant. At June 30, 2001, 1,000 shares had been exercised.

NOTE E - Stock Repurchase Program
---------------------------------

At August 2, 2001, The Company has repurchased 367,057 shares of the
Corporation's outstanding stock at a cost of $5,170,973.

NOTE F - New Accounting Pronouncements
--------------------------------------

In July 2001, the Financial Accounting Standards Board issued Statement No. 141,
Business Combinations, and Statement No. 142, Goodwill and Other Intangible
Assets. Statement No. 141 requires the use of the purchase method of accounting
for all business combination initiated after June 30, 2001, thereby eliminating
the pooling-of-interests methods. Statement No. 141 also provides new criteria
that determine whether an acquired intangible asset should be recognized
separately from goodwill. Statement No. 142 provides guidance on how to account
for goodwill and intangible assets after a business combination has been
completed. Under Statement No. 142 goodwill and certain other intangible assets
will no longer be amortized and will be tested for impairment at least annually.
Intangible assets with a definite life will continue to be amortized. Th
nonamortization and impairment rules will apply to existing goodwill and
intangible assets beginning with fiscal years starting after December 15, 2001.
The Company believes that the adoption of Statements No. 141 and 142 will not
have a material impact on the results of operations and financial condition of
the Company.





                                       10



<page> 13



                N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


         The discussion and analysis included herein covers those material
changes in liquidity and capital resources that have occurred since September
30, 2000, as well as certain changes in results of operations during the three
and nine month periods ended June 30, 2001 and 2000.

         The following should be read in conjunction with the Company's Form
10-KSB for the year ended September 30, 2000, which contains the latest audited
financial statements and notes thereto, together with Management's Discussion
and Analysis of Financial Condition and Results of Operations as of September
30, 2000, and for the year then ended. Therefore, only material changes in
financial condition and results of operations are discussed herein.

         This report contains certain "forward-looking statements" concerning
the future operations of NS&L Bancorp, Inc. We have used forward-looking
statements to describe future plans and strategies, including our expectations
of our future financial results. Management's ability to predict results or the
effect of future plans or strategies is inherently uncertain. Factors which
could affect actual results include interest rate trends, the general economic
climate in our market area and the country as a whole, our loan delinquency
rates, and changes in federal and state regulation. These factors should be
considered in evaluation of the forward-looking statements contained in this
report and undue reliance should not be placed on such statements.

CHANGES IN FINANCIAL CONDITION
------------------------------

         Total assets increased $771,000 from September 30, 2000. Cash and cash
equivalents increased $12.9 million and other assets increased $50,000 during
the nine months ended June 30, 2001. This increases was partially offset by
decreases in loans of $1.4 million, decreases in mortgage-backed securities of
$473,000, accrued interest receivable of $130,000 and investment securities of
$10.2 million during the nine months ended June 30, 2001. Customer deposits
increased $8.7 million due to some special rate offerings on certificates of
deposit and a new more aggressive checking account program. Cash advances from
Federal Home Loan Bank of Des Moines decreased $7.6 million as investments were
called and the funds were used to pay off maturing advances form Federal Home
Loan Bank.

         Nonperforming assets were $58,000 or .08% of total assets at June 30,
2001, compared to $49,000, or .07% of total assets at September 30, 2000. There
were no nonaccrual loans at June 30, 2001 and $3,000 at September 30, 2000.

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2001 TO THE THREE MONTHS ENDED
----------------------------------------------------------------------------
JUNE 30, 2000
-------------

         NET INCOME. Net income was $125,000 for the quarter ended June 30, 2001
compared to $140,000 for the quarter ended June 30, 2000. Net interest income
after provision for loan losses was $511,000 for the quarter compared to
$527,000 for the same quarter last year. Noninterest income increased $64,000
and noninterest expense increased $52,000. Income tax expense increased $11,000.


                                       11


<page> 14




                N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

         NET INTEREST INCOME. Net interest income of $516,000 for the quarter
ended June 30, 2001 decreased from $523,000 for the quarter ended June 30, 2000.
Interest income increased $38,000 while interest expense increased $45,000.

         INTEREST INCOME. Interest income increased by $38,000, or 3.1%, to
$1,266,000 for the quarter ended June 30, 2001 from $1,228,000 for the quarter
ended June 30, 2000. Interest income from loans receivable increased $113,000 to
$931,000 for the quarter ended June 30, 2001 from $818,000 for the quarter ended
June 30, 2000. The increase was primarily attributable to the increase in the
average balance of loans outstanding. Interest income from investment securities
decreased by $138,000 to $189,000 for the quarter ended June 30, 2001 from
$327,000 for the quarter ended June 30, 2000. This decrease was due to a
decrease in the average balances in investment securities as many have been
called by FHLB as market interest rates have dropped and these securities have a
higher than market rate. Interest income from mortgage-backed securities
decreased by $3,000 to $50,000 for the quarter ended June 30, 2001 from $53,000
for the quarter ended June 30, 2000. Interest income from other interest-earning
assets increased by $66,000 to $96,000 for the quarter ended June 30, 2001 from
$30,000 for the quarter ended June 30, 2000. This increase was primarily due to
an increase in the interest paid on larger average balances of cash invested at
Federal Home Loan Bank of Des Moines as cash was received from called
investments.

         INTEREST EXPENSE. Interest expense of $750,000 for the quarter ended
June 30, 2001 increased $45,000, or 6.4%, from $705,000 for the quarter ended
June 30, 2000. The increase is primarily attributable to an increase in the
average balances of customer deposits and to some special rate offerings on
those deposits.

         PROVISION FOR LOAN LOSSES. Loan loss provision increased by $9,000 for
the quarter ending June 30, 2001 compared to the quarter ending June 30, 2000
and actual loan losses net of recoveries were zero for the quarter ending June
30, 2001 and $9,000 for the comparable quarter last year.

         NONINTEREST INCOME. Noninterest income of $190,000 for the quarter
ended June 30, 2001 increased $64,000 from $126,000 for the quarter ended June
30, 2000. This increase was due to an increase of $26,000 to $55,000 on the gain
on the sale of loans for the quarter ended June 30, 2001 from $29,000 for the
quarter ended June 30, 2000, an increase in mortgage banking fees of $8,000, and
an increase of $23,000 in banking service charges and fees.

         NONINTEREST EXPENSE. Noninterest expense increased $52,000, or 11.3%,
to $512,000 for the quarter ended June 30, 2001 from $460,000 for the quarter
ended June 30, 2000. This increase was due to an increase of $23,000 in
compensation and employee benefits as a result of annual salary increases
effective October 1, 2000 and additional personnel needed in the normal
operations of business and a $10,000 increase in advertising expense, a $13,000
increase in printing, postage and supplies, a $6,000 increase in data processing
fees, a $3,000 increase in other expenses which was partially offset by a
decrease of $1,000 in occupancy and equipment, a $1,000 decrease in deposit
insurance premium and a $1,000 decrease in professional fees.




                                       12



<page> 15


                N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

         NET INTEREST MARGIN. Net interest margin was 2.93% for the three months
ended June 30, 2001 compared to 2.98% for the three months ended June 30, 2000.
Income from earning assets increased by $38,000, or 3.1%, between the two
quarters and interest expense increased by $45,000, or 6.4%. The average earning
asset base increased by $349,000, or .5%. The average interest-bearing liability
base increased by $495,000, or .8%.

COMPARISON OF THE NINE MONTHS ENDED JUNE 30, 2001 TO THE NINE MONTHS ENDED
--------------------------------------------------------------------------
JUNE 30, 2000
-------------

         NET INCOME. Net income decreased $20,000 to $353,000 for the nine
months ended June 30, 2001 compared to $373,000 for the nine months ended June
30, 2000. Net interest income after provision for loan losses decreased by
$82,000 to $1.5 million for the nine months ended June 30, 2001 compared to $1.6
million for the nine months ended June 30, 2000. Noninterest income increased
$158,000 and noninterest expense increased $111,000. Income tax expense
decreased $15,000.

         NET INTEREST INCOME. Net interest income of $1.5 million for the nine
months ended June 30, 2001 decreased by $81,000 from net interest income of $1.6
million for the nine months ended June 30, 2000. Total interest income increased
$244,000 while interest expense increased $325,000.

         INTEREST INCOME. Total interest income increased $244,000 to $3.8
million for the nine months ended June 30, 2001 from $3.6 million for the nine
months ended June 30, 2000. Interest income from loans receivable increased
$329,000 to $2.7 million for the nine months ended June 30, 2001 from $2.4
million for the nine months ended June 30, 2000. This increase was primarily
attributable to the increase in the average balance of loans between the two
periods. Interest income from investment securities decreased by $157,000 to
$821,000 for the nine months ended June 30, 2001 from $978,000 for the nine
months ended June 30, 2000 as a result of the calling by FHLB of callable
securities. Interest income from mortgage-backed securitites increased by
$21,000 to $156,000 for the nine months ended June 30, 2001 from $135,000 for
the nine months ended June 30, 2000. This increase was primarily due to an
increase in the interest paid on larger average balances of mortgage-backed
securities. Income from other interest earning assets increased $51,000 to
$151,000 at June 30, 2001 from $100,000 for the period ending June 30, 2000. The
increase in income of other interest earning assets was a result of larger
average balance in those investments.

         INTEREST EXPENSE. Total interest expense of $2.3 million for the nine
months ended June 30, 2001, increased $325,000 from $2.0 million for the quarter
ended June 30, 2000. An increase in customer deposits increased interest paid on
deposits by $277,000 and an increase of $48,000 in interest on FHLB advances
resulted from an increase in the average balance of FHLB advances during the
comparable periods.

         PROVISION FOR LOAN LOSSES. Loan loss provision increased by $1,000 for
the nine months ending June 30, 2001 from the comparable period in 2000 and
actual loan losses net of recoveries



                                       13



<page> 16



                N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

were $4,000 for the periods ending June 30, 2001 and $13,000 for the period
ending June 30, 2000.

         NONINTEREST INCOME. Noninterest income of $459,000 for the nine months
ended June 30, 2001 increased $158,000 from $301,000 for the nine months ended
June 30, 2000. This increase was primarily attributable to a $64,000 increase in
the gain on the sale of loans and a $24,000 gain on the sale of an investments
with no gain in the prior comparable period. In addition, there was an increase
of $37,000 in banking service charges and fees and a $22,000 increase in
mortgage banking fees for the nine months ending June 30, 2001 when compared to
the period ending June 30, 2000.

         NONINTEREST EXPENSE. Noninterest expense increased $111,000 to $1.5
million for the nine months ended June 30, 2001 from $1.4 million for the nine
months ended June 30, 2000. Compensation and employee benefits increased by
$57,000 as a result of annual salary increases effective October 1, 2000 and
additional personnel needed in the normal operations of business. Data
processing increased $12,000, printing, postage and stationery increased
$19,000, advertising expenses increased by $15,000 as a result of normal
operation of the Company and some special direct mail advertising used in a new
checking account program, other expenses increased $12,000 as a result of normal
operations of the Company, and professional fees increased $5,000 from the
comparable period last year. These increases were partially offset by a decrease
of $6,000 in deposit insurance premiums.

         NET INTEREST MARGIN. Net interest margin was 2.88% for the nine months
ended June 30, 2001 compared to 3.10% for the nine months ended June 30, 2000.
Income from earning assets increased by $244,000, or 6.8%, between the two
periods while interest expense increased by $325,000, or 16.3%. The average
earning asset base increased by $1.6 million, or 2.3%. The average
interest-bearing liability base increased by $1.8 million, or 3.1%.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

         The Company's primary sources of funds are deposits, proceeds from
principal and interest payments on loans, mortgage-backed securities, investment
securities, net operating income and cash advances from Federal Home Loan Bank
of Des Moines when appropriate. While maturities and scheduled amortization of
loans and mortgage-backed securities are a somewhat predictable source of funds,
deposit flows and mortgage prepayments are greatly influenced by general
interest rates, economic conditions and competition.

         The Association must maintain an adequate level of liquidity to ensure
availability of sufficient funds to support loan growth and deposit withdrawals,
satisfy financial commitments and to take advantage of investment opportunities.
During the fiscal year 2001 and 2000, the Association used cash advances from
Federal Home Loan Bank of Des Moines as part of its investment strategy. At June
30, 2001, the Association had FHLB advances of $5.5 million that were used to
offset fixed rate mortgage loans and provide liquidity and had approved loan
commitments totaling $2.3 million and undisbursed loans in process of $939,000.



                                       14



<page> 17



                N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

         Liquid funds necessary for normal daily operations of the Association
are maintained in a working checking account and a daily time account with the
Federal Home Loan Bank of Des Moines. It is the Association's current policy to
maintain adequate collected balances in those deposit accounts to meet daily
operating expense, customer withdrawals, and fund loan demand. Funds received
from daily operating activities are deposited, on a daily basis, in the checking
account and transferred, when appropriate, to the daily time account to enhance
income.

         Normal daily operating expenses are not expected to significantly
change. Noninterest expense as a percentage of average assets at 2.7% is
expected to remain basically constant. Interest expense is expected to gradually
increase as the average balance of customer accounts has increased. However,
overall interest expense should remain stable because interest is now being paid
on a smaller average balance of cash advances. The cash advance expenses are
being offset as the funds have been invested at rates higher than the expense
incurred by them. Loan interest income is expected to continue to increase as
the average balance of loans increases although rates on adjustable-rate loans
may not continue to rise as those loans reprice at the annual adjustment dates.
Customer deposits have increased in the past nine months as a result of some
special rate offerings and a more aggressive checking account program, but
increased competition as new financial institutions enter the market area may
make increasing deposits more difficult.

At June 30, 2001, certificates of deposit amounted to $37.8 million, or 66.3% of
the Association total deposits, including $33.4 million of fixed rate
certificates scheduled to mature within twelve months. Historically, the
Association has been able to retain a significant amount of its deposits as they
mature. Management believes it has adequate resources to fund all loan
commitments from savings deposits, loan payments, maturities of investment
securities and advances from Federal Home Loan Bank of Des Moines.



                                       15



<page> 18



                N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)


         The Office of Thrift Supervision requires institutions such as the
Association to meet certain tangible, core, and risk-based capital requirements.
Tangible capital generally consists of stockholders' equity minus certain
intangible assets. Core capital generally consists of stockholders' equity. The
risk-based capital requirements presently address risk related to both recorded
assets and off-balance sheet commitments and obligations. The following table
summarizes the Association's capital ratios at June 30, 2001.

                                                      Percent of Adjusted
                                                Amount         Total Assets
                                           ---------------------------------
                                                       (Unaudited)
                                                (Dollars in thousands)

Tangible capital                               $  7,306          10.00%
Minimum tangible capital requirement              1,096           1.50
                                               --------          -----
Excess                                         $  6,210           8.50%
                                               ========          =====


Core capital                                   $  7,306          10.00%
Minimum core capital requirement                  2,922           4.00
                                               --------          -----
Excess                                         $  4,384           6.00
                                               ========          =====


Risk-based capital                             $  7,373          23.99%
Minimum risk-based capital requirement            2,459           8.00
                                               --------          -----
Excess                                         $  4,914          15.99%
                                               ========          =====





                                       16



<page> 19



                      N S & L BANCORP, INC. AND SUBSIDIARY

                           PART II - OTHER INFORMATION

ITEM 1, LEGAL PROCEEDINGS


Neither the Registrant nor the Association is a party to any material legal
proceedings at this time. From time to time the Association is involved in
various claims and legal actions arising in the ordinary course of business.

ITEM 2, CHANGES IN SECURITIES

Not applicable.

ITEM 3, DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

None.

ITEM 5, OTHER INFORMATION

None.

ITEM 6, EXHIBITS AND REPORT ON FORM 8-K

A. Exhibits

None.

B. Forms 8-K

None.



                                       17


<page> 20



                                   SIGNATURES

Pursuant to the requirements 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.


                                                    N S & L Bancorp, Inc.


Date  August 7, 2001                           By: /s/ C.R. Butler
      ---------------------                        -----------------------------
                                                   C. R. 'Rick' Butler
                                                   President
                                                   CEO


Date  August 7, 2001                           By: /s/ Carol Guest
      ---------------------                        -----------------------------
                                                   Carol Guest
                                                   Treasurer