CORPORATE PROFILE

Southern Missouri Bancorp, Inc. is the holding company for Southern Missouri Bank & Trust, Co. (Southern Missouri Bank). Its stock is traded on the NASDAQ Stock Market under the symbol SMBC. While the company's history goes back 115 years, the past 3 years have truly marked a new era in company focus and performance.

In recent years, the bank's management team has succeeded in generating substantial growth through a strategy of continuing to build the bank's traditional core businesses of home loans and traditional deposit products, while at the same time increasing its geographic footprint and successfully introducing new, higher-margin products.

TABLE OF CONTENTS

|Letter to Shareholders                                     | 2 
|---------------------------------------------------------- | --
|Common Share Data                                          | 8 
|Financial Review                                           | 9 
|Report from Kraft, Miles & Tatum, LLC Independent Auditors | 21
|Consolidated Financial Statements                          | 22
|Notes to Consolidated Financial Statements                 | 27
|Corporate and Investor Information                         | 48
|Directors and Officers                                     | 49

FINANCIAL HIGHLIGHTS

|                                                    | 2002         |   | 2001         |   | Change(%) |  
|--------------------------------------------------- | ------------ | - | ------------ | - | --------- | -
|Earnings (dollars in thousands)                     |              |   |              |   |           |  
|Net interest income                                 | $     8,854  |   | $     6,671  |   | 32.7      |  
|Provision for possible loan losses                  | 350          |   | 510          |   | (31.4     | )
|Other income                                        | 874          |   | 1,447        |   | (39.6     | )
|Other expense                                       | 5,872        |   | 5,219        |   | 12.5      |  
|Income taxes                                        | 1,197        |   | 840          |   | 42.5      |  
|Net income                                          | 2,309        |   | 1,549        |   | 49.1      |  
|Per Common Share                                    |              |   |              |   |           |  
|Net income:                                         |              |   |              |   |           |  
|Basic                                               | $       1.94 |   | $       1.26 |   | 54.0      |  
|Diluted                                             | 1.90         |   | 1.25         |   | 52.0      |  
|Shareholders' equity (diluted book value)           | 20.34        |   | 18.53        |   | 9.8       |  
|Closing market price                                | 19.25        |   | 14.00        |   | 37.5      |  
|Cash dividends declared                             | .50          |   | .50          |   | 0.0       |  
|At Year-End (dollars in thousands)                  |              |   |              |   |           |  
|Total assets                                        | $  266,288   |   | $  240,494   |   | 10.8      |  
|Earning assets                                      | 252,596      |   | 226,815      |   | 11.4      |  
|Loans                                               | 211,212      |   | 180,857      |   | 16.8      |  
|Nonperforming assets                                | 719          |   | 1,659        |   | (56.7     | )
|Reserves as a percent of nonperforming loans        | 466.2        | % | 299.1        | % |           |  
|Deposits                                            | $  188,947   |   | $  173,281   |   | 9.0       |  
|Shareholders' equity                                | 24,511       |   | 23,582       |   | 3.9       |  
|Financial Ratios                                    |              |   |              |   |           |  
|Return on shareholders' equity                      | 9.77         | % | 6.86         | % |           |  
|Return on assets                                    | .91          |   | .71          |   |           |  
|Net interest margin                                 | 3.67         |   | 3.22         |   |           |  
|Efficiency ratio                                    | 60.37        |   | 64.29        |   |           |  
|Allowance for possible loan losses to loans         | .73          |   | .79          |   |           |  
|Equity to average assets at year-end                | 9.29         |   | 10.29        |   |           |  
|Other Data(1)                                       |              |   |              |   |           |  
|Common shares outstanding                           | 1,803,201    |   | 1,803,201    |   |           |  
|Average common and equivalent    shares outstanding | 1,215,009    |   | 1,240,159    |   |           |  
|Shareholders of record                              | 314          |   | 313          |   |           |  
|Full-time equivalent employees                      | 87           |   | 83           |   |           |  
|Assets per employee (in thousands)                  | $     3,061  |   | $     2,897  |   |           |  
|Banking offices                                     | 8            |   | 8            |   |           |  

(1)  Other data is as of year-end, except for average shares.

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1

LETTER TO SHAREHOLDERS

Dear Shareholder:

All the heavy groundwork undertaken by management during our first three years here made fiscal 2002 a year of excellent growth for the company, and a very enjoyable year for us as we see all our hard work rewarded by this year's performance.

Earnings per share rose 52%, from $1.25 to $1.90. Net income rose 49%, from $1,548,602 to $2,308,903. Total loans, total deposits and total assets all continued their trends upward.

On a personal level, I am satisfied with the growth in our earnings per share and I am optimistic about the company's future.  Before coming to my current position, it was my good fortune to be actively involved in orchestrating similar improvements at another Missouri institution. We are on track to accomplish the same thing here.

The hard part -- staging for growth -- is behind us. Momentum is beginning to build and the main task now is to stay on the solid course we have laid out for our company's future. Our confidence in the company's future is reflected by the 12% dividend increase authorized by the board for the first quarter of 2003 from $0.125 to $.14 a share.

|Improving ROEThis year, we have surpassed our peers on this most closely watched and important measurement.(1) Peer data compares SMBC fiscal year-end figures (June) with the average of publicly traded peers' most recent fiscal
year-end figures (December).(2) Peer data information is based on the average of the latest data available from SNL DataSource's Index of Missouri
publicly traded thrifts. | Return On Equity vs. Peer Banks
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------

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|THIS TEAM CAME TOGETHER...
|--------------------------

|Pictured at right are the five managers who have been at the helm of Southern Missouri Bank for the past three years.
     Greg Steffens, CEO, was chosen by the board because he had been on a team that accomplished, at a similar-size bank in Missouri, the goals of business growth and profitability that had been set for Southern Missouri. Having spent much of his career as a bank regulator, Greg has personally examined dozens of Midwestern financial institutions and seen first-hand which strategies work and which don't.
     Since coming together as a team at Southern Missouri Bank, this group has put the bank firmly on a path of growth. The list below shows some of their more significant accomplishments in the three short years they've been here. | Left to right, Jim Duncan, Adrian Rushing, Greg Steffens, Bill Hribovsek, Kimberly Capps
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|...MADE THESE CHANGES...
|------------------------

|Improved OperationsAutomated check processingConverted to new data processing systemStreamlined loan processing | Improved ServicesIntroduced Cash ManagementExpanded Commercial LendingIntroduced Money Market PassbooksEstablished Telephone BankingEstablished Internet Banking & Bill Pay | Improved OfficesSold two under-performing officesPurchased two Commerce Bank officesBuilt new PP Highway officeBuilt new Doniphan office
|--------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                               

|...AND PRODUCED THESE RESULTS
|-----------------------------

|Growth Is The Goal | By more effectively selling services we have always offered, and selectively adding higher-margin services, we are aiming
for continued growth.
|------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------

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3

LETTER TO SHAREHOLDERS

The economic downturn felt in many other parts of the country has not been as severe in Southeast Missouri. Businesses in
this area are generally doing well. This has helped us get off to a very good start with our re-energized commercial lending
business. Home loans continue to be our primary business, and the low mortgage rates available throughout the year have
produced growth in that area, too.

Our performance compared to our peer banks continues to improve. We now stand in the top quintile on growth and have
surpassed our peer groups Return On Equity. This is what we and most industry analysts believe is the single most important
measure of overall success.

We remain the region's leading provider of home loans, growing that business 26% in the past three years from $95 million
to $120 million. Home loans continue to be the foundation for our company because they are relatively low risk and offer
solid growth opportunity. Historically, homes have retained their value, which makes them excellent collateral. Borrowers
tend not to walk away from these loans because that would mean walking away from their homes.

|**AMERICAN BANKER**THE FINANCIAL SERVICES DAILYJuly 10, 2002**"Flight To Safety" Driving Capital To Small Banks"**                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                               
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The "flight to safety" that has followed controversies involving Enron Corp., Global Crossing, and WorldCom Inc. has
pumped up the share prices of small banks and savings institutions. Across the country, community institutions' stocks, once
thinly traded, have surged thanks to what Nickolas J. Barbarine, a partner in Hovde Financial LLC in Washington, called
"value plays" by wealthy investors and fund managers. | ...To be sure, bank stocks have generally been outperforming the broader markets since the technology bubble burst two years
ago. But while there are signs that large-bank stocks may have peaked in recent months, investors continue to flock to
community banks, analysts and fund managers say.Reprinted with permission.
Copyright American Banker 2002.

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|Growth On TopOf GrowthIncreasing our consumer/ home loans and deposit business, while building our newer commercial loan and Money Market
Passbook business has made this a year of greater growth and profitability. | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | Adding Money Market Passbook accounts to our deposit offerings, and commercial loans to our lending mix, has improved our
profitability and contributed to the 57 basis point increase in interest rate spread during 2002.(1) Peer data compares SMBC fiscal year-end figures (June) with the average of publicly traded peers' most recent fiscal year-end
figures (December).(2) Peer data information is based on the average of the latest data available from SNL DataSource's Index of Missouri publicly
traded thrifts.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

opportunity.  Historically, homes have retained their value, which makes them excellent collateral.  Borrowers tend not to walk away from these loans because that would mean walking away from their homes.

Without reducing our focus on home loans, we have placed more emphasis on making loans to businesses in our community. In
the past three years, we doubled our commercial real estate loans and business loans grew from 1% of our total loans ($1 million)
to 14% ($29 million).

Our offerings to area businesses now extend well beyond financing and include cash management and business checking services.

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5

Today, Southern Missouri Bank is much different than it was when we began managing it three years ago.

In the past three years, deposits grew 58% from $120 million to $189 million. Not only did our established deposit products -
CDs, checking and savings - grow substantially, our new Money Market Passbook product reached $48 million and now
represents 25% of our total deposits.

Recent changes had a positive impact on this year's performance. Our new location at PP Highway makes us the first bank to
provide full-service banking in this high-growth area of Poplar Bluff. Last Fall, we moved our Doniphan branch to a new
location, giving us a stronger presence in that market. This year also saw the introduction of Internet Banking & Bill Pay,
Telephone Banking and Cash Management for our customers.

Southern Missouri Bank is clearly a very different organization than it was when we began managing it three years ago. Today,
we are a growing, full-service bank that can offer our customers everything they could get at any "big bank" because we now have
the operational underpinnings required to manage all that efficiently. But unlike the big banks, we continue to give our customers
the local, friendly, and responsive service they want from their bank.

|Greater EfficiencyWhile management has succeeded in producing strong revenue growth, it has at the same time exercised control over expenses,
which has improved our efficiency this year.(1) Peer data compares SMBC fiscal year-end figures (June) with the average of publicly traded peers' most recent fiscal year-end
figures (December).

(2)  Peer data information is based on the average of the latest data available from SNL DataSource's Index of Missouri publicly
traded thrifts. | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

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|Loan Quality ImprovementWe now have a higher percentage of commercial loans. Commercial Loans have higher inherent credit risk than home loans. Yet,
our overall loan quality has improved significantly.(1) Peer data compares SMBC fiscal year-end figures (June) with the average of publicly traded peers' most recent fiscal year-end
figures (December). | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

In the year ahead, we plan to continue growing both our "foundation" services (home loans, CDs, checking and savings) and our
newer services (commercial loans, cash management, business checking and Money Market Passbooks). At the same time, we
will seek opportunities to further grow our market presence - either by purchasing other institutions or branches of other
institutions.

This has been a truly enjoyable year for me. Our excellent team of dedicated employees continues to excel in meeting the
challenges placed before them. Also, our sincere thanks to our customers who show their trust in us by choosing us to be their
bank. It's always exciting to see things working out as planned and to know that what has been done once before, can be done
again.

|/s/ Greg Steffens

Greg SteffensPresidentSouthern Missouri Bancorp, Inc. | Please join us . . ....at our 2002 annual meeting, where shareholders and those considering investing in Southern Missouri Bancorp, Inc. will hear
management cover this year's performance in detail and discuss our plans for continued growth.The annual meeting will be on Monday, October 21, 9 a.m., at the Chamber of Commerce Building in Poplar Bluff.
|------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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7

COMMON SHARE DATA

The common stock of the Company is listed on the Nasdaq Stock Market under the symbol "SMBC". The following bar graph
sets forth the high, low and closing trade prices of the common stock, cash dividends and other information for the last three
years.

The following table sets forth per share market price and dividend information for the Company's common stock. As of August
1, 2002, there were approximately 314 stockholders of record. This does not reflect the number of persons or entities who hold
stock in nominee or "street name."

|2002                   | High   | Low    | Close  | BookValue AtEnd OfPeriod | Market PriceTo Book Value | DividendsDeclared
|---------------------- | ------ | ------ | ------ | ------------------------ | ------------------------- | -----------------
|                      
|4th Quarter (6-30-02)  | $19.93 | $16.94 | $19.25 | $20.34                   | 94.64%                    | $0.125           
|3rd Quarter (3-31-02)  | $17.22 | $15.75 | $17.00 | $19.77                   | 85.99%                    | $0.125           
|2nd Quarter (12-31-01) | $16.45 | $14.70 | $16.20 | $19.30                   | 83.94%                    | $0.125           
|1st Quarter (9-30-01)  | $15.75 | $13.75 | $15.25 | $19.12                   | 79.76%                    | $0.125           
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|2001                  
|                      
|4th Quarter (6-30-01)  | $14.15 | $13.00 | $14.00 | $18.53                   | 75.55%                    | $0.125           
|3rd Quarter (3-31-01)  | $14.00 | $13.00 | $13.88 | $18.25                   | 76.05%                    | $0.125           
|2nd Quarter (12-31-00) | $13.63 | $12.25 | $13.63 | $18.02                   | 75.64%                    | $0.125           
|1st Quarter (9-30-00)  | $13.25 | $12.50 | $12.65 | $17.55                   | 72.08%                    | $0.125           
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|                       |        |        |        |                          |                           |                  
|2000                  
|                      
|4th Quarter (6-30-00)  | $13.11 | $10.68 | $12.75 | $17.17                   | 74.26%                    | $0.125           
|3rd Quarter (3-31-00)  | $13.13 | $10.88 | $11.56 | $17.16                   | 67.38%                    | $0.125           
|2nd Quarter (12-31-99) | $13.46 | $10.89 | $12.81 | $16.69                   | 76.77%                    | $0.125           
|1st Quarter (9-30-99)  | $14.25 | $12.09 | $13.63 | $16.59                   | 82.13%                    | $0.125           

Any future dividend declarations and payments are subject to the discretion of the Board of Directors of the Company.  The
ability of the Company to pay dividends depends primarily on the ability of the Bank to pay dividends to the Company.  For a
discussion of the restrictions on the Bank's ability to pay dividends, see Note 14 of Notes to Consolidated Financial Statements
included elsewhere in this report.

|                                   | At Or For The Years EndedJune 30
|---------------------------------- | --------------------------------
|                                   | 2002                            
|                                  
|Average common shares
outstanding  | 1,215,009                       
|Year-end common shares
outstanding | 1,803,201                       
|Shareholders of record             | 314                             

(1) Per NASDAQ National Market System

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Financial Review

BUSINESS OF THE COMPANY AND THE BANK

|Southern Missouri Bancorp, Inc. (Southern Missouri or Company) is a Missouri corporation and owns all of the outstanding stock
of Southern Missouri Bank & Trust Co. (SMBT or the Bank). The Company's earnings are primarily dependent on the operations
of the Bank. As a result, the following discussion relates primarily to the operations of the Bank.

The Bank was originally chartered by the State of Missouri in 1887 and converted from a state-chartered stock savings and loan
association to a Federally-chartered stock savings bank effective June 20, 1995. Then, effective February 17, 1998, the Bank
converted its charter to a state-chartered stock savings bank. The Bank's deposit accounts are insured up to a maximum of
$100,000 by the Savings Association Insurance Fund (SAIF), which is administered by the Federal Deposit Insurance
Corporation (FDIC).

The Bank's primary business is the origination of mortgage loans secured by one- to four-family residences. The Bank currently
conducts its business through its home office located in Poplar Bluff and seven full service branch facilities in Poplar Bluff, Van
Buren, Dexter, Kennett, Doniphan, and Qulin, Missouri. Lending activities are funded through the attraction of deposit accounts
consisting of certificate accounts with terms of 60 months or less, passbook accounts, money market deposit accounts and
advances from the Federal Home Loan Bank of Des Moines. The Bank also originates mortgage loans on commercial real estate,
construction loans on single-family residences and commercial properties, commercial business loans, consumer loans, and loans
secured by deposit accounts. |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

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9

Financial Review (continued)

(dollars in thousands)

|                                                           | At June 30
|---------------------------------------------------------- | ----------
|Financial Condition Data:                                  | 2002      
|                                                           |           
|Total assets                                               | $ 266,288 
|Loans receivable, net                                      | 211,212   
|Mortgage-backed securities                                 | 22,609    
|Cash, interest-bearing deposits  and investment securities | 18,763    
|Deposits                                                   | 188,947   
|Borrowings                                                 | 51,311    
|Stockholders' equity                                       | $   24,511

(dollars in thousands)

|                                                     | For The Year Ended June 30
|---------------------------------------------------- | --------------------------
|Operating Data:                                      | 2002                      
|                                                     |                           
|Interest income                                      | $   16,993                
|Interest expense                                     | 8,139                     
|                                                     |                           
|                                                    
|Net interest income                                  | 8,854                     
|Provision for loan losses                            | 350                       
|                                                     |                           
|                                                    
|Net interest income after  provision for loan losses | 8,504                     
|                                                    
|Noninterest income                                   | 874                       
|Noninterest expense                                  | 5,872                     
|                                                     |                           
|                                                    
|Income before income taxes                           | 3,506                     
|Income tax expense                                   | 1,197                     
|                                                     |                           
|Net income                                           | $     2,309               
|                                                     |                           
|                                                    
|Basic earnings per common share                      | $       1.94              
|Diluted earnings per common
share                    | $       1.90              
|Dividends per share                                  | $         .50             

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Financial Review (continued)

|                     | At June 30
|-------------------- | ----------
|Other Data:          | 2002      
|                     |           
|Number of:          
|Real estate loans    | 2,952     
|Deposit accounts     | 15,975    
|Full service offices | 8         

|                                                                                                                                     | At Or For The Year Ended June 30
|------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------
|Key Operating Ratios:                                                                                                                | 2002                            
|                                                                                                                                     |                                 
|Return on assets (net income  divided by average assets)                                                                             | .91%                            
|Return on average equity (net  income divided by average equity)                                                                     | 9.77                            
|Average equity to average assets                                                                                                     | 9.29                            
|Interest rate spread (spread between  weighted average rate on all interest-  earning assets and all interest-  bearing liabilities) | 3.33                            
|Net interest margin (net interest  income as a percentage of average  interest-earning assets)                                       | 3.67                            
|Noninterest expense to average assets                                                                                                | 2.31                            
|Average interest-earning assets to  interest-bearing liabilities                                                                     | 110.15                          
|Allowance for loan losses to total  loans at end of period                                                                           | .73                             
|Allowance for loan losses to  nonperforming loans                                                                                    | 466.22                          
|Net charge-offs to average out-  standing loans during the period                                                                    | .12                             
|Ratio of nonperforming assets  to total assets                                                                                       | .27                             
|Dividend payout ratio                                                                                                                | 25.46                           

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11

Financial Review (continued)

Management's Discussion and Analysis of Financial Condition
and Results of Operations

|Southern Missouri Bancorp, Inc. is a Missouri corporation originally organized for the principal purpose of becoming the holding
company of Southern Missouri Savings Bank. The Bank converted from a Federally-chartered stock savings bank to a state-chartered stock savings bank effective February 17, 1998, and subsequently changed its name to Southern Missouri Bank & Trust
Co. The Company's state of incorporation changed from Delaware to Missouri effective April 1, 1999. The principal business
of SMBT consists primarily of attracting deposits from the general public and using such deposits along with wholesale funding
from the Federal Home Loan Bank of Des Moines (FHLB) to finance mortgage loans secured by one-to four-family residences
and, to a lesser extent, consumer loans, commercial real estate loans, and commercial business loans. These funds have also been
used to purchase investment securities, mortgage-backed securities (MBS), U.S. government and federal agency obligations and
other permissible securities.

The revenues of Southern Missouri are derived principally from interest earned on loans and, to a lesser extent, from interest
earned on investment securities and MBS. Southern Missouri's operations are significantly influenced by general economic conditions including monetary and fiscal policies of the U.S. government and
the Federal Reserve Bank. Additionally, Southern Missouri is subject to policies and regulations issued by financial institution
regulatory agencies, including the Federal Deposit Insurance Corporation, the Office of Thrift Supervision (OTS) and the
Missouri Division of Finance. Each of these factors may influence interest rates, loan demand, prepayment rates and deposit
flows. Interest rates available on competing investments as well as general market interest rates influence the Bank's cost of
funds. Lending activities are affected by the demand for financing real estate and other types of loans, which in turn is affected
by the interest rates at which such financing may be offered. The Bank intends to continue to focus on its lending programs for
one-to four-family residential real estate, commercial mortgage, business and consumer financing on loans secured by properties
or collateral located in Southeastern Missouri.

**FORWARD-LOOKING STATEMENTS**

Except for the historical information contained herein, the matters discussed in this annual report may be deemed to be forward-looking statements, which we believe are within the meaning of the Private Securities Litigation Reform Act of 1995. These
matters involve risks and uncertainties, including changes in economic conditions in Southern Missouri's market area, changes
in policies by regulatory agencies, fluctuations in interest rates, demand for loans in Southern Missouri's market area and price
competition for loans and deposits. Actual strategies and results in future periods may differ materially from those currently
expected. These forward-looking statements represent Southern Missouri's judgment as of the date of this report. Southern
Missouri disclaims, however, any intent or obligation to update these forward-looking statements.

**FINANCIAL CONDITION**

The Company's total assets increased $25.8 million, or 10.8%, to $266.3 million at June 30, 2002, as compared to $240.5 million
at June 30, 2001. The growth was primarily due to a $30.4 million, or 16.8%, |  | increase in the loan portfolio, partially offset by
a $4.5 million decline in cash balances and investments. The growth in the loan portfolio exceeded the Company's growth targets
and was comprised principally of $10.1 million in one-to four-family real estate, $7.0 million in commercial business, $6.4
million in commercial real estate and $6.0 million in indirect dealer paper. The loan growth was primarily funded by deposit
growth of $15.7 million, or 9.0%, from $173.3 million to $188.9 million, an increase in FHLB advances of $10.0 million, or
27.0%, from $37.0 million to $47.0 million, and by the $2.4 million, or 6.6%, decrease in the investment portfolio from $35.1
million to $32.8 million.

Allowance for loan losses increased $108,000, or 7.4%, from $1.5 million at June 30, 2001, to $1.6 million at June 30, 2002.
The allowance for loan losses at June 30, 2002, represented 0.7% of loans receivable and 466.2% of nonperforming loans, as
compared to respective balances of 0.8% and 299.1% at June 30, 2001 (see Provision for Loan Losses).

Premises and equipment increased $775,000 after depreciation expense, to $5.8 million at June 30, 2002, from $5.1 million at
June 30, 2001, due to the completion of a new branch office in Doniphan and upgrades in information technology systems.

Intangible assets generated through branch acquisitions decreased $255,000 to $3.4 million as of June 30, 2002, and will continue
to be amortized in accordance with Statement of Financial Accounting Standard (SFAS) No. 72.

Total deposits increased $15.7 million, or 9.0%, to $188.9 million at June 30, 2002, from $173.3 million at June 30, 2001. The
increase was primarily due to growth in savings accounts and certificates of deposit of $9.7 million and $3.7 million, respectively.
The growth in savings accounts was mostly due to the continued success of the money market passbook account (MMPA)
introduced in the prior year. The cost of interest-bearing deposits declined to 2.79% at June 30, 2002, as compared to 4.08% at
June 30, 2001, due in part to the decline in interest rates.

During 2001, the Company introduced a new savings account, the MMPA. The MMPA is designed to give customers a yield
similar to those available from 6 to 12 month CDs, while allowing the depositor immediate access to their funds. At June 30,
2002, the MMPA had attracted $48.3 million in deposits as compared to $39.6 million at June 30, 2001. FHLB advances
increased $10.0 million, or 27.0%, from $37.0 million at June 30, 2001, to $47.0 million at June 30, 2002. The outstanding
advances have fixed interest rates and may be subject to early redemption from the issuer. At June 30, 2002, the advances had
a weighted average cost of 5.62% and a weighted average maturity of 6.9 years as compared to a weighted average cost of 5.73%
and a weighted average maturity of 8.8 years at June 30, 2001. The average cost of deposits declined at a faster pace than FHLB
advances due to the FHLB advances average maturity being longer.

The Company's stockholders' equity increased by $929,000, or 3.9% to $24.5 million at June 30, 2002, from $23.6 million at
June 30, 2001. This increase was primarily due to net income of $2.3 million, partially offset by the repurchase of $1.1 million
in common stock and the payment of cash dividends of $588,000. The Company has approximately 50,000 shares of common
stock remaining to be purchased under its current stock repurchase program.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Financial Review (continued)

|**RESULTS OF OPERATIONS**

Southern Missouri's results of operations are primarily dependent on the level of its net interest income, noninterest income, and
its ability to control operating expenses. Net interest income is dependent primarily on the difference or spread between the
average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, as well as the relative
amounts of such assets and liabilities. Southern Missouri, like other financial institutions, is also subject to interest rate risk to
the degree that its interest-earning assets mature or reprice at different times, or on a varying basis, from its interest-bearing
liabilities.

Southern Missouri's noninterest income consists primarily of fees charged on transaction and loan accounts. Southern Missouri's
operating expenses include: employee compensation and benefits, occupancy expenses, legal and professional fees, federal
deposit insurance premiums, amortization of intangible assets and other general and administrative expenses.

**COMPARISON OF THE YEARS ENDED JUNE 30, 2002 AND 2001**

**Net Income.**  Southern Missouri's net income increased $760,000, or 49.1%, to $2.3 million for fiscal 2002 when compared to
the results of the prior fiscal year. The prior year's results included a $399,000 after tax gain on the sale of two branches.
Exclusive of the sale, net income for fiscal 2002 would have exceeded the prior year by $1.1 million. The improvement in net
income was primarily due to increased net interest income and the reduction in provision for loan losses, partially offset by higher
noninterest expense and provisions for income taxes.

**Net Interest Income.**  Net interest income increased $2.2 million, or 32.7%, to $8.9 million for fiscal 2002 when compared to the
prior fiscal year. The increase was primarily due to the 57 basis point increase in the average interest rate spread between interest-earning assets and interest-bearing liabilities and the $34.3 million increase in average interest-earning assets, partially offset by
a $31.4 million increase in average interest-bearing liabilities. The increase in the average interest rate spread was primarily due
to the overall decline in average interest rates as interest-bearing liabilities repriced downward at shorter intervals than the yield
earned on interest-earning assets.

This past fiscal year, the Company operated in an economy that experienced declining interest rates and a change in the shape
of the yield curve as short-term interest rates dropped at a faster pace than longer-term interest rates causing a steepening of the
yield curve to a more traditional shape. During fiscal 2002, the Federal Reserve Bank dropped its targeted federal fund rate from
3.75% to the current 1.75%. These changes contributed to the improvement in the Company's average net interest rate spread.

**Interest Income.**  Interest income increased $832,000, or 5.2%, to $17.0 million for fiscal 2002 when compared to the prior fiscal
year. The increase was primarily due to the $34.3 million increase in the average balance of interest-earning assets, partially offset
by the 77 basis point decline in the average yield earned on these assets, from 7.81% to 7.04%. |  | Interest income on loans receivable increased by $1.2 million, or 8.5% to $15.0 million for fiscal 2002 when compared to the
prior fiscal year. The increase was primarily due to a $30.8 million increase in average loans receivable, partially offset by a 71
basis point decline in the average yield on the loans. Interest income on the investment and mortgage-backed security portfolio
decreased by $225,000 or 10.6%, to $1.9 million for fiscal 2002 when compared to the prior fiscal year. The decrease was
primarily due to a 108 basis point decrease in the average yield on these investments, partially offset by higher average balances
of $2.9 million. Other interest income decreased $114,000 in fiscal 2002 as compared to the prior year mostly due to lower yields
earned on these assets.

**Interest Expense.**  Interest expense decreased $1.4 million, or 14.2%, to $8.1 million for fiscal 2002 as compared to the prior fiscal
year. The decrease was primarily due to the 134 basis point decrease in the average rate paid on interest-bearing liabilities from
5.05% in fiscal 2001 as compared to 3.71% in fiscal 2002, partially offset by the $31.4 million increase in the average balance
of interest-bearing liabilities used to fund loan growth.

**Provision for Loan Losses.**  A provision for loan losses is charged to earnings to bring the total allowance for loan losses to a level
considered adequate by management to provide for potential loan losses based on prior loss experience, known and inherent risks
in the loan portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying
collateral and current economic conditions. Management also considers other factors relating to the collectibility of the loan
portfolio.

The provision for loan losses was $350,000 for fiscal 2002 as compared to $510,000 for the prior fiscal year. The decrease in
loan loss provision was primarily due to the decline in non-performing assets and loan delinquencies. At June 30, 2002, classified
assets totaled $5.2 million as compared to $5.5 million at June 30, 2001. The largest classified assets were two loans to one
borrower secured by commercial real estate property, which totaled $2.1 million as of June 30, 2002, and both of which were
current at that date.

The above provision was made based on management's analysis of the various factors which affect the loan portfolio and
management's desire to maintain the allowance at a level considered adequate. Management performs a detailed analysis of the
loan portfolio, including types of loans, the historical charge-off history and an analysis of the allowance for loan losses.
Management also considered the continued origination of loans secured by commercial businesses and commercial real estate.
Such loans bear an inherently higher level of credit risk than one-to four-family residential real estate loans. While management
believes the allowance for loan losses at June 30, 2002, is adequate to cover all losses inherent in the portfolio, there can be no
assurance that, in the future, the Bank's regulators will not require further increases in the allowance or actual losses will not
exceed the allowance.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 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13

Financial Review (continued)

|**Noninterest Income.**  Noninterest income increased $61,000, or 7.5% to $874,000 for fiscal 2002, as compared to the $813,000
earned during fiscal 2001, exclusive of the $634,000 gain on the sale of the two branches in fiscal 2001. The increase was
primarily due to an expanded customer base and the implementation of other fee-related services.

**Noninterest Expense.**  Noninterest expense increased $653,000, or 12.5%, to $5.9 million for fiscal 2002, as compared to the prior
fiscal year. The increase was primarily due to increased expenses for compensation and benefits and occupancy of $379,000 and
$340,000, respectively. Increased compensation expense was primarily due to increased staffing levels and higher compensation.
Increased occupancy expense was primarily due to increased depreciation expense due to the Company's investments in premises
and equipment the past two years.

**Provision for Income Taxes.**  Provision for income taxes increased $357,000 to $1.2 million for fiscal 2002, as compared to the
prior fiscal year. The increase was attributed to increased pre-tax income.

**COMPARISON OF THE YEARS ENDED JUNE 30, 2001 AND 2000**

**Net Income.**  Southern Missouri's net income totaled $1.5 million during fiscal 2001, which represented a $228,000, or 17.3%
increase from the results of the prior year. Increased earnings were primarily due to the gain realized on the sale of the two
branches and increased net interest income, partially offset by higher noninterest expense and an increase in the provision for
loan losses.

**Net Interest Income.**  Net interest income increased $1.3 million, or 24.2%, to $6.7 million for fiscal 2001, when compared to the
prior fiscal year. The increase was primarily due to the 16 basis point increase in the average interest rate spread between interest-earning assets and interest-bearing liabilities, and the $40.2 million increase in average interest-earning assets, partially offset
by a $42.7 million increase in average interest-earning liabilities and a 5% decline in the ratio of interest-earning assets to interest-bearing liabilities from 113% to 115%. The decline was primarily the result of the acquisition, which included the addition of
intangible assets, and premises and equipment, which are non-earning assets. |  | **Interest Income.**  Interest income for fiscal 2001 increased $3.9 million, up 31.5% to $16.2 million from the $12.3 million earned
during the prior fiscal year. The increase was mostly attributed to a $40.2 million or 24.1% increase in average interest-earning
assets as well as a 44 basis point increase in the average yield earned on these assets, to 7.81% from 7.37%. A general rise in
average interest rates and an increased concentration of higher yielding commercial loans contributed to the increase.

**Interest Expense.** Interest expense for fiscal 2001 increased $2.6 million or 37.2% to $9.5 million from $6.9 million during the
prior fiscal year. The increase was largely due to a $42.7 million, or 29.5% increase in average interest-bearing liabilities and
a 28 basis point increase in the average cost of these liabilities, to 5.05%, from 4.77%.

**Provision for Loan Losses.** The provision for loan losses for fiscal 2001 was $510,000, as compared to $215,000 for the prior
fiscal year. The increase in the provision was the result of loan growth, the resolution of several problem loans and the recent
slow down of national economic conditions. At June 30, 2001, classified assets totaled $5.5 million, as compared to $4.0 million
at June 30, 2000. The increase in classified assets related primarily to the deterioration in the financial condition of three
customers with loans primarily secured by commercial real estate, one of which was resolved through foreclosure. The largest
classified asset consisted of a commercial real estate relationship, which totaled $2.4 million as of June 30, 2001 and was current
at that date performing in accordance with its terms.

**Noninterest Income.**  Noninterest income for fiscal 2001 increased $835,000 from the prior year. Exclusive of the $634,000 pre-tax gain realized on the sale of branches, noninterest income increased $201,000, to $813,000 as compared to the $612,000
earned during the same period of the prior year. The increase was primarily due to a $113,000 increase in banking service
charges, a $46,000 increase in other customer charges and an $11,000 gain realized on the sale of available for sale securities
versus a $21,000 loss during the prior year. Overall, increased banking and other customer service charges were the result of a
revised fee structure, changes in the philosophy on the assessment of service charges and an increased customer base from the
branch acquisitions.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Financial Review (continued)

|**Noninterest Expense.**  Noninterest expense for fiscal 2001 increased $1.5 million, to $5.2 million, as compared to $3.8 million
expended for the prior year. The increase was primarily due to increased expenses for compensation and benefits, occupancy,
advertising, amortization of intangible assets and other expense of $413,000, $224,000, $71,000, $215,000 and $352,000,
respectively. In addition, fiscal 2001 expenses included a $125,000 provision for loss on impairment of premises and equipment,
which consisted of a $51,000 write down on the carrying value of computer equipment and a $75,000 expense related to an
adjustment in the carrying value of the Company's former office in Kennett. Increased compensation expense was primarily due
to increased staffing levels due to the acquisition, the addition of several loan officers, increased support staff and transitional
labor cost related to the acquisition and opening of a new branch. Increased occupancy expense was primarily due to an increase
in depreciation expense due to increased investment in premises and equipment. Increased advertising expense was due to
promotions related to the branch acquisition, a new branch opening and the offering of the new MMPA. Other expense increased
due to $85,000 in data processing conversion costs, $63,000 in check issuance charges for customers of the acquired branches,
$128,000 in expenses related to repossessions and foreclosures and overall growth of the Company.

**Provision for Income Taxes.**  The provision for income taxes for fiscal 2001 was $840,000, as compared to the $690,000 for the
prior fiscal year. The increase was attributed to increased income.

**ASSET/LIABILITY MANAGEMENT**

The goal of the Company's asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning
assets and interest-bearing liabilities in order to maximize net interest income without exposing the Company to an excessive level
of interest rate risk. The Company employs various strategies intended to manage the potential effect that changing interest rates
have on future operating results. The primary asset/liability management strategy had been to focus on matching the repricing
intervals of interest-earning assets and interest-bearing liabilities. At times, however, depending on the level of general interest
rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the Company may
determine to increase its interest rate risk position somewhat in order to maintain its net interest margin.

In an effort to manage the increased interest rate risk resulting from its fixed-rate lending, the Bank has utilized long-term (up
to 10 year maturities) FHLB advances, subject to early redemption and has promoted long term CDs to fund a portion of the
fixed-rate residential loan originations and to extend the average maturity of the CD portfolio. Other elements of the Company's
current asset/liability strategy |  | include: (i) increasing loans receivable through the origination of adjustable-rate residential loans,
when available, (ii) increasing originations of commercial real estate and commercial business loans, which typically provide
higher yields and shorter repricing periods, but inherently increase credit risk, (iii) expanding the consumer loan portfolio, (iv)
limiting the price volatility of the investment portfolio by reducing the weighted average maturity, (v) active solicitation of less
rate-sensitive deposits, (vi) offering competitively priced money market accounts and CDs with maturities of up to five years.
The degree to which each segment of the strategy is achieved will affect profitability and exposure to interest rate risk.

During the last four years, Southern Missouri expanded its loan products to include fixed-rate loans for residential financing
based on an amortization schedule of up to 30 years. This, as well as more competitive pricing and an increase in customer
preferences for fixed-rate residential financing, led to fixed-rate originations of $31.6 million during fiscal 2002 and $24.6 million
during fiscal 2001. At June 30, 2002, fixed-rate loans with remaining maturities in excess of 10 years totaled $66.4 million or
31.4% of loans receivable, as compared to $46.4 million, or 25.7% of loans receivable at the end of the prior year. At June 30,
2002 the weighted average life of the investment portfolio was 1.6 years as compared to 2.1 years at June 30, 2001. During fiscal
2002, CDs with maturities over two years increased from $4.8 million on June 30, 2001, to $19.6 million at June 30, 2002. The
additional $10.0 million in FHLB advances during the fiscal 2002 had a weighted-average maturity of 5.1 years.

**AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES**

The following table sets forth certain information relating to the Company's average interest-earning assets and interest-bearing
liabilities and reflects the average yield on assets and the average cost of liabilities for the periods indicated. These yields and
costs are derived by dividing income or expense by the average month-end balance of assets or liabilities, respectively, for the
periods indicated. Nonaccrual loans are included in the net loan category.

The table also presents information with respect to the difference between the weighted-average yield earned on interest-earning
assets and the weighted-average rate paid on interest-bearing liabilities, or interest rate spread, which financial institutions have
traditionally used as an indicator of profitability. Another indicator of an institution's net interest income is its net yield on
interest-earning assets, which is its net interest income divided by the average balance of interest-earning assets. Net interest
income is affected by the interest rate spread and by the relative amounts of interest-earning assets and interest-bearing liabilities.
When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net
interest income.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 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15

Financial Review (continued)

(dollars in thousands)

|                                                                                       | 2002           |                      | 2001       |   | 2000           |                     
|-------------------------------------------------------------------------------------- | -------------- | -------------------- | ---------- | - | -------------- | --------------------
|**Year Ended June 30**                                                                 | AverageBalance | InterestandDividends | Yield/Cost |   | AverageBalance | InterestandDividends
|Interest-earning assets:                                                              
|Mortgage loans (1)                                                                     | $ 158,032      | $ 12,026             | 7.61       | % | $ 140,690      | $ 11,361            
|Other loans (1)                                                                        | 38,404         | 2,952                | 7.69       |   | 24,993         | 2,445               
|                                                                                       |                |                      |            |   |                |                     
|Total net loans                                                                        | 196,436        | 14,978               | 7.62       |   | 165,683        | 13,806              
|Mortgage-backed securities                                                             | 26,421         | 1,393                | 5.27       |   | 15,812         | 1,002               
|Investment securities (2)                                                              | 10,964         | 501                  | 4.57       |   | 18,681         | 1,117               
|Other interest-earning assets                                                          | 7,578          | 121                  | 1.60       |   | 6,875          | 236                 
|                                                                                       |                |                      |            |   |                |                     
|TOTAL INTEREST-EARNING ASSETS (1)                                                      | 241,399        | 16,993               | 7.04       |   | 207,051        | 16,161              
|Other noninterest-earning assets                                                       | 12,976         | -                    |            |   | 12,445         | -                   
|                                                                                       |                |                      |            |   |                |                     
|TOTAL ASSETS                                                                           | $ 254,375      | $ 16,993             |            |   | $ 219,496      | $ 16,161            
|                                                                                       |                |                      |            |   |                |                     
|Interest-bearing liabilities:                                                         
|Savings accounts                                                                       | $   55,461     | $   1,509            | 2.72       |   | $   19,757     | $      794          
|Now accounts                                                                           | 19,012         | 191                  | 1.00       |   | 16,150         | 389                 
|Money market accounts                                                                  | 19,143         | 467                  | 2.44       |   | 19,298         | 777                 
|Certificates of deposit                                                                | 78,830         | 3,463                | 4.39       |   | 92,959         | 5,308               
|                                                                                       |                |                      |            |   |                |                     
|TOTAL INTEREST-BEARING DEPOSITS                                                        | 172,446        | 5,630                | 3.26       |   | 148,164        | 7,268               
|Borrowings                                                                            
|                                                                                      
|Securities sold under    agreements to repurchase                                      | 4,122          | 88                   | 2.13       |   | 3,486          | 99                  
|FHLB advances                                                                          | 42,583         | 2,421                | 5.69       |   | 36,139         | 2,123               
|                                                                                       |                |                      |            |   |                |                     
|                                                                                      
|TOTAL INTEREST-BEARING LIABILITIES                                                     | 219,151        | 8,139                | 3.71       |   | 187,789        | 9,490               
|                                                                                      
|Noninterest-bearing    demand deposits                                                 | 8,258          | -                    |            |   | 6,417          | -                   
|Other liabilities                                                                      | 3,342          | -                    |            |   | 2,702          | -                   
|                                                                                       |                |                      |            |   |                |                     
|TOTAL LIABILITIES                                                                      | 230,751        | 8,139                |            |   | 196,908        | 9,490               
|Stockholders' equity                                                                   | 23,624         | -                    |            |   | 22,588         | -                   
|                                                                                       |                |                      |            |   |                |                     
|TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY                                              | $ 254,375      | $   8,139            |            |   | $ 219,496      | $   9,490           
|                                                                                       |                |                      |            |   |                |                     
|Net interest income                                                                    | -              | $   8,854            | -          |   | -              | $   6,671           
|Interest rate spread (3)                                                               | -              | -                    | 3.33       | % | -              | -                   
|Net interest margin (4)                                                                | -              | -                    | 3.67       | % | -              | -                   
|Ratio of average interest-earning    assets to average interest-bearing    liabilities | 110.15%        | -                    | -          |   | 110.26%        | -                   

(1) Calculated net of deferred loan fees, loan discounts and loans-in-process.
(2) Includes FHLB stock and related cash dividends.
(3) Net interest spread represents the difference between the average rate on interest-earning assets and the average cost of interest-bearing liabilities.
(4)  Net yield on average interest-earning assets represents net interest income divided by average interest-earning assets.

---

Financial Review(continued)

|**YIELDS EARNED AND RATES PAID**                                                                                                      
|--------------------------------------------------------------------------------------------------------------------------------------
|The following table sets forth for the periods and at the dates indicated, the weighted average yields earned on the Company's
assets,

|                                                                                                                                  | AtJune 30, | ForYear Ended June 30,
|--------------------------------------------------------------------------------------------------------------------------------- | ---------- | ----------------------
|                                                                                                                                  | 2002       | 2002                  
|Weighted-average yield on loan portfolio                                                                                          | 7.19       | %                     
|Weighted-average yield on mortgage-backed  securities                                                                             | 5.14       |                       
|Weighted-average yield on investment  securities (1)                                                                              | 4.44       |                       
|Weighted-average yield on other  interest-earning assets                                                                          | 1.35       |                       
|Weighted-average yield on all  interest-earning assets                                                                            | 6.73       |                       
|Weighted-average rate paid on deposits                                                                                            | 2.79       |                       
|Weighted-average rate, paid on securities  sold under agreements to repurchase                                                    | 1.75       |                       
|Weighted-average rate paid on FHLB  advances                                                                                      | 5.62       |                       
|Weighted-average rate paid on all  interest-bearing liabilities                                                                   | 3.36       |                       
|Interest rate spread (spread between weighted  average rate on all interest-earning assets  and all interest-bearing liabilities) | 3.37       |                       
|Net interest margin (net interest income  as a percentage of average interest-  earning assets)                                   | -          |                       

(1)    Includes Federal Home Loan Bank stock.

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17

Financial Review(continued)

|**RATE/VOLUME ANALYSIS**                                                                                                                                                                                                                                                           
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The following table sets forth the effects of changing rates and volumes on net interest income of the Bank. Information is
provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior
rate); (ii) effects on

|                                                             | Years Ended June 30,2002 Compared to 2001Increase (Decrease) Due to | Increase (Decrease) Due to2001 Compared to 2000Years Ended June 30,
|------------------------------------------------------------ | ------------------------------------------------------------------- | -------------------------------------------------------------------
|(dollars in thousands)                                       | Rate                                                                |                                                                    
|                                                             |                                                                     |                                                                    
|Interest-earnings assets:                                   
|Loans receivable (1)                                         | $ (1,176                                                            | )                                                                  
|Mortgage-backed    securities                                | (169                                                                | )                                                                  
|Investment securities                                        | (263                                                                | )                                                                  
|Other interest-    earning deposits                          | (126                                                                | )                                                                  
|                                                             |                                                                     |                                                                    
|Total net change in  income on interest-  earning assets     | (1,734                                                              | )                                                                  
|                                                             |                                                                     |                                                                    
|Interest-bearing liabilities:                               
|Deposits                                                     | (2,019                                                              | )                                                                  
|Securities sold under    agreements to repurchase            | (25                                                                 | )                                                                  
|FHLB advances                                                | (65                                                                 | )                                                                  
|                                                             |                                                                     |                                                                    
|Total net change in expense on  interest-bearing liabilities | (2,109                                                              | )                                                                  
|Net change in net  interest income                           | $      375                                                          |                                                                    

(1) Does not include interest on loans placed on nonaccrual status.

**INTEREST RATE SENSITIVITY ANALYSIS**

The following table sets forth as of June 30, 2002, management's estimates of the projected changes in net portfolio value and
net interest income in the event of 1%, 2% and 3%, instantaneous, permanent increases or decreases in market interest rates.

|                    | Net Portfolio          | NPV as % ofPV of Assets
|------------------- | ---------------------- | -----------------------
|                    | $ Amount               | $ Change               
|**Change in Rates** | (dollars in thousands) |                        
|                   
|+300 bp             | 21,060                 | (3,384)                
|+200 bp             | 22,768                 | (1,676)                
|+100 bp             | 23,742                 | (702)                  
|0 bp                | 24,444                 | -                      
|-100 bp             | 24,529                 | 85                     
|-200 bp             | 23,005                 | (1,439)                
|-300 bp             | 21,363                 | (3,081)                

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Financial Review(continued)

|Computations in the table above are based on prospective effects of hypothetical changes in interest rates and are based on an
internally generated model using the actual maturity and repricing schedules for SMBT's loans and deposits, adjusted by
management's assumptions for prepayment rates and deposit runoff. Further, the computations do not consider any reactions that
the Bank may undertake in response to changes in interest rates. These projected changes should not be relied upon as indicative
of actual results in any of the aforementioned interest rate changes.

Management cannot accurately predict future interest rates or their effect on the Bank's NPV and net interest income in the future.
Certain shortcomings are inherent in the method of analysis presented in the computation of NPV and net interest income. For
example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different
degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in
advance of changes in market interest rates, while interest rates on other types of assets and liabilities may lag behind changes
in market interest rates. Additionally, most of Southern Missouri's loans have features which restrict changes in interest rates
on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early
withdrawal levels would likely deviate significantly from those assumed in calculating the foregoing table. Finally, the ability
of many borrowers to service their debt may decrease in the event of an interest rate increase.

**LIQUIDITY AND CAPITAL RESOURCES**

Southern Missouri's primary potential sources of funds include deposit growth, securities sold under agreements to repurchase,
FHLB advances, amortization and prepayment of loan principal, investment maturities and sales, and ongoing operating results.
While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and loan prepayment rates
are significantly influenced by factors outside of the Bank's control, including general economic conditions and competition.
Southern Missouri has relied on FHLB advances as a source for funding cash or liquidity needs. |  | Southern Missouri uses its liquid assets as well as other funding sources to meet ongoing commitments, to fund loan
commitments, to repay maturing certificates of deposit and FHLB advances, to make investments, to fund other deposit
withdrawals and to meet operating expenses. At June 30, 2002, the Bank had outstanding commitments to extend credit of $20.4
million (including $1.4 million on lines of credit). Management anticipates that current funding sources will be adequate to meet
foreseeable liquidity needs.

The primary sources of funding for the Company are deposits, securities sold under agreements to repurchase and FHLB
advances. For the year ended June 30, 2002, Southern Missouri increased deposits, FHLB advances and securities sold under
agreements to repurchase by $15.7 million, $10.0 million and $196,000, respectively. During the prior year, Southern Missouri
increased deposits and securities sold under agreements to repurchase by $49.4 million and $4.1 million, respectively, while the
level of FHLB advances remained stable. At June 30, 2002, the Bank had additional borrowing capacity from the FHLB of $48.7
million as compared to $45.2 million at June 30, 2001.

Liquidity management is an ongoing responsibility of the Bank's management. The Bank adjusts its investment in liquid assets
based upon a variety of factors including (i) expected loan demand and deposit flows, (ii) anticipated investment and FHLB
advance maturities, (iii) the impact on profitability, and (iv) asset/liability management objectives.

At June 30, 2002, the Bank had $56.9 million in CDs maturing within one year and $104.7 million in other deposits without a
specified maturity. Management believes that most maturing interest-bearing liabilities will be retained or replaced by new
interest-bearing liabilities. Also at June 30, 2002, the Bank had $18.0 million in FHLB advances subject to early redemption
within one year.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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19

Financial Review(continued)

|**REGULATORY CAPITAL**

Federally insured savings banks are required to maintain a minimum level of regulatory capital. FDIC regulations established
capital requirements, including a leverage (or core capital) requirement and a risk-based capital requirement. The FDIC is also
authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis.

At June 30, 2002, SMBT exceeded regulatory capital requirements with core and risk-based capital of $21.1 million and $19.5
million, or 7.5% and 12.2% of adjusted total assets and risk-weighted assets, respectively. These capital levels exceeded minimum
requirements of 4.0% and 8.0% for adjusted total assets and risk-weighted assets, by approximately $9.1 million and $7.3 million,
respectively. Under regulatory guidelines, SMBT was considered well-capitalized at June 30, 2002.

**IMPACT OF INFLATION**

The consolidated financial statements and related data presented herein have been prepared in accordance with U.S. generally
accepted accounting principles, which require the measurement of financial position and operating results in historical dollars
without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation
on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the
assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates generally have a more
significant impact on a financial institution's performance than does inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and services. In the current interest rate environment, liquidity and maturity
structure of the Company's assets and liabilities are critical to the maintenance of acceptable performance levels. |  | **IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS**

See Note 1 of Notes to Consolidated Financial Statements for a discussion of the impact of recent accounting pronouncements.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Independent Auditors' Report

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21

Consolidated Statements of Financial Condition June 30, 2002 and 2001

Southern Missouri Bancorp, Inc. and Subsidiary

|**Assets**                                                                                                                                | 2002            |   | 2001           |  
|----------------------------------------------------------------------------------------------------------------------------------------- | --------------- | - | -------------- | -
|                                                                                                                                          |                
|Cash and cash equivalents                                                                                                                 | $     8,612,714 |   | $   10,710,122 |  
|Investment and mortgage-backed  securities: (Note 3)                                                                                     
|Available for sale - at estimated market value    (amortized cost $32,249,517 and $34,728,747    at June 30, 2002 and 2001, respectively) | 32,758,857      |   | 35,121,355     |  
|Stock in FHLB of Des Moines                                                                                                               | 2,350,000       |   | 2,150,000      |  
|Loans receivable, net (Note 4)                                                                                                            | 211,211,588     |   | 180,856,594    |  
|Accrued interest receivable (Note 5)                                                                                                      | 1,559,674       |   | 1,601,830      |  
|Foreclosed real estate, net (Note 6)                                                                                                      | 383,346         |   | 1,162,156      |  
|Premises and equipment (Note 7)                                                                                                           | 5,843,680       |   | 5,068,808      |  
|Intangible assets, net                                                                                                                    | 3,369,448       |   | 3,624,706      |  
|Prepaid expenses and other assets                                                                                                         | 198,282         |   | 198,462        |  
|                                                                                                                                          |                
|TOTAL ASSETS                                                                                                                              | $ 266,287,589   |   | $ 240,494,033  |  
|                                                                                                                                          |                
|                                                                                                                                         
|**Liabilities and Stockholders' Equity**                                                                                                 
|Deposits (Note 8)                                                                                                                         | $ 188,946,856   |   | $ 173,281,419  |  
|Securities sold under agreements to repurchase (Note 9)                                                                                   | 4,311,237       |   | 4,115,142      |  
|Advances from FHLB of Des Moines (Note 10)                                                                                                | 47,000,000      |   | 37,000,000     |  
|Advances from borrowers for taxes and insurance                                                                                           | 170,610         |   | 280,112        |  
|Accounts payable and other liabilities                                                                                                    | 776,513         |   | 1,095,738      |  
|Accrued interest payable                                                                                                                  | 571,168         |   | 1,139,134      |  
|                                                                                                                                          |                
|TOTAL LIABILITIES                                                                                                                         | 241,776,384     |   | 216,911,545    |  
|                                                                                                                                          |                
|                                                                                                                                         
|Commitments and contingencies (Note 15)                                                                                                   | -               |   | -              |  
|Preferred stock, $.01 par value; 500,000 shares  authorized; none issued and outstanding                                                  | -               |   | -              |  
|Common stock, $.01 par value; 3,000,000 shares  authorized; 1,803,201 shares issued                                                       | 18,032          |   | 18,032         |  
|Additional paid-in capital                                                                                                                | 17,456,872      |   | 17,450,851     |  
|Retained earnings-substantially restricted                                                                                                | 17,093,398      |   | 15,372,440     |  
|Treasury stock of 592,966 shares in 2002 and  530,621 shares in 2001, at cost                                                             | (10,122,620     | ) | (9,164,892     | )
|Unearned employee benefits                                                                                                                | (255,361        | ) | (341,287       | )
|Accumulated other comprehensive income                                                                                                    | 320,884         |   | 247,344        |  
|                                                                                                                                          |                
|TOTAL STOCKHOLDERS' EQUITY                                                                                                                | 24,511,205      |   | 23,582,488     |  
|                                                                                                                                          |                
|TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY                                                                                                 | $ 266,287,589   |   | $ 240,494,033  |  
|                                                                                                                                          |                

See accompanying notes to consolidated financial statements.

---

Consolidated Statements of Income
Years Ended June 30, 2002, 2001 and 2000
Southern Missouri Bancorp, Inc. and Subsidiary

|**Interest income:**                                                     | 2002          |  | 2001          |   | 2000          |  
|------------------------------------------------------------------------ | ------------- |  | ------------- | - | ------------- | -
|                                                                         |              
|Loans receivable                                                         | $ 14,978,086  |  | $ 13,806,477  |   | $   9,893,254 |  
|Investment securities                                                    | 500,637       |  | 1,116,939     |   | 1,455,486     |  
|Mortgage-backed securities                                               | 1,393,518     |  | 1,002,102     |   | 866,792       |  
|Other interest-earning assets                                            | 121,181       |  | 235,556       |   | 74,631        |  
|                                                                         |              
|TOTAL INTEREST INCOME                                                    | 16,993,422    |  | 16,161,074    |   | 12,290,163    |  
|                                                                         |              
|**Interest expense:**                                                   
|Deposits (Note 8)                                                        | 5,630,403     |  | 7,268,120     |   | 5,422,703     |  
|Securities sold under agreements    to repurchase                        | 88,092        |  | 99,087        |   | -             |  
|Advances from FHLB                                                       | 2,421,396     |  | 2,122,810     |   | 1,496,250     |  
|                                                                         |              
|Total interest expense                                                   | 8,139,891     |  | 9,490,017     |   | 6,918,953     |  
|                                                                         |              
|Net interest income                                                      | 8,853,531     |  | 6,671,057     |   | 5,371,210     |  
|Provision for loan losses (Note 4)                                       | 350,000       |  | 510,000       |   | 215,000       |  
|                                                                         |              
|NET INTEREST INCOME AFTERPROVISION FOR LOAN LOSSES                       | 8,503,531     |  | 6,161,057     |   | 5,156,210     |  
|**Noninterest income:**                                                 
|Gain on sale of investment    securities, available for sale             | -             |  | 11,121        |   | 14,500        |  
|Gain (loss) on sale of mortgage-backed    securities, available for sale | 1,366         |  | -             |   | (35,705       | )
|Banking service charges                                                  | 487,682       |  | 503,452       |   | 390,949       |  
|Loan late charges                                                        | 109,534       |  | 92,328        |   | 72,726        |  
|Gain on sale of branches                                                 | -             |  | 633,538       |   | -             |  
|Other                                                                    | 275,759       |  | 206,383       |   | 169,405       |  
|                                                                         |              
|TOTAL NONINTEREST INCOME                                                 | 874,341       |  | 1,446,822     |   | 611,875       |  
|                                                                         |              
|**Noninterest expense:**                                                
|General and administrative:                                             
|Compensation and benefits                                                | 2,997,782     |  | 2,618,465     |   | 2,205,770     |  
|Occupancy and equipment                                                  | 1,134,642     |  | 794,172       |   | 570,283       |  
|SAIF deposit insurance premium                                           | 31,255        |  | 27,516        |   | 47,842        |  
|Professional fees                                                        | 211,374       |  | 205,177       |   | 175,920       |  
|Advertising                                                              | 161,422       |  | 169,302       |   | 97,887        |  
|Postage and office supplies                                              | 255,646       |  | 218,252       |   | 165,350       |  
|Amortization of intangible assets                                        | 255,258       |  | 214,519       |   | -             |  
|Provision for loss on impairment      of premises and equipment          | -             |  | 125,338       |   | -             |  
|Other                                                                    | 824,890       |  | 846,536       |   | 494,864       |  
|                                                                         |              
|TOTAL NONINTEREST EXPENSE                                                | 5,872,269     |  | 5,219,277     |   | 3,757,916     |  
|                                                                         |              
|Income before income taxes                                               | 3,505,603     |  | 2,388,602     |   | 2,010,169     |  
|                                                                         |              
|Income taxes (Note 12)                                                  
|Current                                                                  | 1,126,700     |  | 850,000       |   | 775,300       |  
|Deferred                                                                 | 70,000        |  | (10,000       | ) | (85,300       | )
|                                                                         |              
|                                                                         | 1,196,700     |  | 840,000       |   | 690,000       |  
|                                                                         |              
|NET INCOME                                                               | $   2,308,903 |  | $   1,548,602 |   | $   1,320,169 |  
|                                                                         |              
|Basic earnings per common share                                          | $     1.94    |  | $     1.26    |   | $     1.03    |  
|Diluted earnings per common share                                        | $     1.90    |  | $     1.25    |   | $     1.02    |  

See accompanying notes to consolidated financial statements.

---

23

Consolidated Statements of Stockholders' Equity
Years Ended June 30, 2002, 2001 and 2000

Southern Missouri Bancorp, Inc. and Subsidiary

|                                                                   | CommonStock | AdditionalPaid-inCapital |   | RetainedEarnings |   | TreasuryStock |   | UnearnedEmployeeBenefits |   | AccumulatedOtherComprehensiveIncome |   | TotalStockholders'Equity |  
|------------------------------------------------------------------ | ----------- | ------------------------ | - | ---------------- | - | ------------- | - | ------------------------ | - | ----------------------------------- | - | ------------------------ | -
|                                                                   |            
|BALANCE AT JUNE 30, 1999                                           | $ 18,032    | $17,545,544              |   | $13,759,488      |   | $(7,911,655   | ) | $(531,068                | ) | $(250,879                           | ) | $22,629,462              |  
|                                                                   |            
|Net income                                                         |             |                          |   | 1,320,169        |   |               |   |                          |   |                                     |   | 1,320,169                |  
|Change in unrealized gain (loss)  on available for sale securities |             |                          |   |                  |   |               |   |                          |   | (379,077                            | ) | (379,077                 | )
|Total comprehensive income                                         |             |                          |   |                  |   |               |   |                          |   |                                     |   | 941,092                  |  
|Purchase of treasury stock                                         |             |                          |   |                  |   | (1,762,530    | ) |                          |   |                                     |   | (1,762,530               | )
|Dividends paid ($.50 per share)                                    |             |                          |   | (640,700         | ) |               |   |                          |   |                                     |   | (640,700                 | )
|Release of ESOP awards                                             |             | 23,023                   |   |                  |   |               |   | 84,021                   |   |                                     |   | 107,044                  |  
|MRP expense, net                                                   |             |                          |   |                  |   |               |   | 20,210                   |   |                                     |   | 20,210                   |  
|MRP shares awarded                                                 |             | 9,750                    |   |                  |   |               |   | (9,750                   | ) |                                     |   | -                        |  
|Exercise of stock options                                          |             | (60,483                  | ) |                  |   | 222,492       |   |                          |   |                                     |   | 162,009                  |  
|                                                                   |            
|BALANCE AT JUNE 30, 2000                                           | 18,032      | 17,517,834               |   | 14,438,957       |   | (9,451,693    | ) | (436,587                 | ) | (629,956                            | ) | 21,456,587               |  
|                                                                   |            
|Net income                                                         |             |                          |   | 1,548,602        |   |               |   |                          |   |                                     |   | 1,548,602                |  
|Change in unrealized gain (loss)  on available for sale securities |             |                          |   |                  |   |               |   |                          |   | 877,300                             |   | 877,300                  |  
|TOTAL COMPREHENSIVE INCOME                                         |             |                          |   |                  |   |               |   |                          |   |                                     |   | 2,425,902                |  
|Purchase of treasury stock                                         |             |                          |   |                  |   | (10,646       | ) |                          |   |                                     |   | (10,646                  | )
|Dividends paid ($.50 per share)                                    |             |                          |   | (615,119         | ) |               |   |                          |   |                                     |   | (615,119                 | )
|Release of ESOP awards                                             |             | 25,128                   |   |                  |   |               |   | 81,876                   |   |                                     |   | 107,004                  |  
|MRP expense, net                                                   |             |                          |   |                  |   |               |   | 13,424                   |   |                                     |   | 13,424                   |  
|Exercise of stock options                                          |             | (92,111                  | ) |                  |   | 297,447       |   |                          |   |                                     |   | 205,336                  |  
|                                                                   |            
|BALANCE AT JUNE 30, 2001                                           | 18,032      | 17,450,851               |   | 15,372,440       |   | (9,164,892    | ) | (341,287                 | ) | 247,344                             |   | 23,582,488               |  
|                                                                   |            
|Net income                                                         |             |                          |   | 2,308,903        |   |               |   |                          |   |                                     |   | 2,308,903                |  
|Change in unrealized gain (loss)  on available for sale securities |             |                          |   |                  |   |               |   |                          |   | 73,540                              |   | 73,540                   |  
|TOTAL COMPREHENSIVE INCOME                                         |             |                          |   |                  |   |               |   |                          |   |                                     |   | 2,382,443                |  
|Purchase of treasury stock                                         |             |                          |   |                  |   | (1,142,399    | ) |                          |   |                                     |   | (1,142,399               | )
|Dividends paid ($.50 per share)                                    |             |                          |   | (587,945         | ) |               |   |                          |   |                                     |   | (587,945                 | )
|Release of ESOP awards                                             |             | 45,282                   |   |                  |   |               |   | 71,891                   |   |                                     |   | 117,173                  |  
|MRP expense, net                                                   |             |                          |   |                  |   |               |   | 14,035                   |   |                                     |   | 14,035                   |  
|Exercise of stock options                                          |             | (39,261                  | ) |                  |   | 184,671       |   |                          |   |                                     |   | 145,410                  |  
|                                                                   |            
|BALANCE AT JUNE 30, 2002                                           | $ 18,032    | $ 17,456,872             |   | $ 17,093,398     |   | $ (10,122,620 | ) | $ (255,361               | ) | $ 320,884                           |   | $ 24,511,205             |  
|                                                                   |            

See accompanying notes to consolidated financial statements.

---

Consolidated Statements of Cash Flows
Years Ended June 30, 2002, 2001 and 2000

Southern Missouri Bancorp, Inc. and Subsidiary

|**Cash flows from operating activities:**                                | 2002           |   | 2001           |   | 2000           |  
|------------------------------------------------------------------------ | -------------- | - | -------------- | - | -------------- | -
|                                                                         |               
|Net income                                                               | $    2,308,903 |   | $    1,548,602 |   | $    1,320,169 |  
|Items not requiring (providing) cash:                                    |               
|Depreciation                                                             | 551,668        |   | 413,087        |   | 263,726        |  
|MRP expense and ESOP expense                                             | 131,208        |   | 120,429        |   | 127,254        |  
|Gain on sale of investment    securities, available for sale             | -              |   | (11,121        | ) | (14,500        | )
|(Gain) loss on sale of mortgage-backed    securities, available for sale | (1,366         | ) | -              |   | 35,705         |  
|Amortization of intangible assets                                        | 255,258        |   | 214,519        |   | -              |  
|Provision for loss on impairment of    premises and equipment            | -              |   | 125,338        |   | -              |  
|Provision for loan losses                                                | 350,000        |   | 510,000        |   | 215,000        |  
|Gain on sale of branches                                                 | -              |   | (633,538       | ) | -              |  
|Net amortization of premiums and discounts                               | 345,408        |   | 47,713         |   | 87,489         |  
|Changes in:                                                             
|Accrued interest receivable                                              | 42,156         |   | (115,188       | ) | (118,481       | )
|Prepaid expenses and other assets                                        | 180            |   | 85,903         |   | (82,027        | )
|Accounts payable and other liabilities                                   | (362,416       | ) | 227,847        |   | 131,533        |  
|Accrued interest payable                                                 | (567,966       | ) | 2,729          |   | 227,527        |  
|                                                                         |               
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                | 3,053,033      |   | 2,536,320      |   | 2,193,395      |  
|                                                                         |               
|**Cash flows from investing activities:**                               
|Net increase in loans                                                    | (30,392,626    | ) | (27,157,886    | ) | (20,522,582    | )
|Net cash received in acquisition of branches                             | -              |   | 14,021,579     |   | -              |  
|Net cash paid in sale of branches                                        | -              |   | (4,153,644     | ) | -              |  
|Proceeds from sales of investment  securities, available for sale        | -              |   | 7,102,357      |   | 1,034,500      |  
|Proceeds from maturing investment  securities, available for sale        | 11,545,000     |   | 10,195,000     |   | 415,000        |  
|Purchase of investment securities,  available for sale                   | (12,836,748    | ) | (3,558,681     | ) | (2,759,750     | )
|Proceeds from sales of mortgage-backed  securities, available for sale   | 3,389,315      |   | -              |   | 3,365,084      |  
|Proceeds from maturing mortgage-backed  securities, available for sale   | 13,151,318     |   | 2,343,854      |   | 2,202,514      |  
|Purchase of mortgage-backed  securities, available for sale              | (13,113,698    | ) | (14,937,089    | ) | (1,976,250     | )
|Purchase of FHLB stock                                                   | (200,000       | ) | (300,000       | ) | (759,000       | )
|Purchase of premises and equipment                                       | (1,326,540     | ) | (1,648,548     | ) | (934,364       | )
|Proceeds from sale of foreclosed real estate                             | 466,442        |   | 365,347        |   | 178,122        |  
|                                                                         |               
|NET CASH USED IN INVESTING ACTIVITIES                                    | $ (29,317,537  | ) | $ (17,727,711  | ) | $ (19,756,726  | )
|                                                                         |               

See accompanying notes to consolidated financial statements.

---

25

Consolidated Statements of Cash Flows(continued)Years Ended June 30, 2002, 2001 and 2000

Southern Missouri Bancorp, Inc. and Subsidiary

|**Cash flows from financing activities:**                                                                                                                                                                 | 2002            |   | 2001          |   | 2000            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------- | - | ------------- | - | --------------- | -
|                                                                                                                                                                                                          |                
|Net increase in demand  deposits and savings accounts                                                                                                                                                     | $ 11,997,393    |   | $ 38,489,609  |   | $    1,894,048  |  
|Net increase (decrease) in  certificates of deposit                                                                                                                                                       | 3,668,044       |   | (20,730,046   | ) | 1,871,705       |  
|Net increase in securities sold under  agreements to repurchase                                                                                                                                           | 196,095         |   | 4,115,142     |   | -               |  
|Proceeds from FHLB Advances                                                                                                                                                                               | 11,000,000      |   | 77,000,000    |   | 143,550,000     |  
|Repayments of FHLB Advances                                                                                                                                                                               | (1,000,000      | ) | (77,000,000   | ) | (127,100,000    | )
|Net (decrease) increase in advances from  borrowers for taxes and insurance                                                                                                                               | (109,502        | ) | (16,460       | ) | 16,887          |  
|Dividends on common stock                                                                                                                                                                                 | (587,945        | ) | (615,119      | ) | (640,700        | )
|Exercise of stock options                                                                                                                                                                                 | 145,410         |   | 198,660       |   | 135,620         |  
|Payments to acquire treasury stock                                                                                                                                                                        | (1,142,399      | ) | (10,646       | ) | (1,762,530      | )
|                                                                                                                                                                                                          |                
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                                                                                                                                                 | 24,167,096      |   | 21,431,140    |   | 17,965,030      |  
|                                                                                                                                                                                                          |                
|(Decrease) increase in cash and cash equivalents                                                                                                                                                          | (2,097,408      | ) | 6,239,749     |   | 401,699         |  
|Cash and cash equivalents at beginning of year                                                                                                                                                            | 10,710,122      |   | 4,470,373     |   | 4,068,674       |  
|                                                                                                                                                                                                          |                
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                                                                                                                                                  | $   8,612,714   |   | $ 10,710,122  |   | $    4,470,373  |  
|                                                                                                                                                                                                          |                
|**Supplemental disclosures of cash flow information:**                                                                                                                                                   
|Noncash investing and financing activities                                                                                                                                                               
|Conversion of loans to foreclosed real estate                                                                                                                                                             | $        94,408 |   | $   1,134,909 |   | $       424,507 |  
|Conversion of foreclosed real estate to loans                                                                                                                                                             | 177,600         |   | 153,000       |   | 175,000         |  
|Cash paid during the period for                                                                                                                                                                          
|Interest (net of interest credited)                                                                                                                                                                       | 3,723,833       |   | 3,718,786     |   | 2,677,920       |  
|Income taxes                                                                                                                                                                                              | 1,258,040       |   | 797,254       |   | 706,051         |  
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|Noncash investing and financing transactions relating to the two branchacquisitions that are not reflected in the Consolidated Statementof Cash Flows for the year ended June 30, 2001, are listed below:
|Fair value of assets acquired excluding cash and  cash equivalents acquired                                                                                                                               |                 |   | $ 27,249,092  |   |                 |  
|Liabilities assumed                                                                                                                                                                                       |                 |   | (45,109,896   | ) |                 |  
|Intangible assets                                                                                                                                                                                         |                 |   | 3,839,225     |   |                 |  
|Net cash received in acquisition of branches                                                                                                                                                              |                 |   | 14,021,579    |   |                 |  

See accompanying notes to consolidated financial statements.

---

Notes to Consolidated Financial Statements

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 1:  Organization and Summary of Significant Accounting Policies**

**Organization**-Southern Missouri Bancorp, Inc., a Missouri corporation (the Company) was organized in 1994 and is the parent
company of Southern Missouri Bank & Trust (the Bank) and the Bank's wholly-owned subsidiary S.M.S. Financial Services,
Inc. Substantially all of the Company's consolidated revenues are derived from the operations of the Bank, and the Bank
represents substantially all of the Company's consolidated assets and liabilities.

**Basis of Financial Statement Presentation-**The financial statements of the Company have been prepared in conformity with U.S.
generally accepted accounting principles and general practices within the financial institution industry. In the normal course of
business, the Company encounters two significant types of risk: economic and regulatory. Economic risk is comprised of interest
rate risk, credit risk, and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities
reprice on a different basis than its interest-earning assets. Credit risk is the risk of default on the Company's loan portfolio that
results from the borrowers' inability or unwillingness to make contractually required payments. Market risk reflects changes in
the value of collateral underlying loans receivable and the value of the Company's investment in real estate.

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities
and the disclosure of contingent assets and liabilities to prepare the consolidated financial statements in conformity with U.S.
generally accepted accounting principles. Actual results could differ from those estimates. The determination of the provision
for loan losses and the valuation of real estate are based on estimates that are particularly susceptible to changes in the economic
environment and market conditions. These balances may be adjusted in the future based on such changes, or based on
requirements of regulatory examiners of the Company's subsidiary.

**Principles of Consolidation-**The consolidated financial statements include the accounts of the Company, its wholly-owned
subsidiary, the Bank, and the Bank's wholly-owned subsidiary, S.M.S. Financial Services, Inc. The insurance agency of S.M.S.
Financial Services, Inc. was sold effective May 31, 1999. The operations of the agency were not material to the consolidated
financial condition or operations of the Company. All significant intercompany accounts and transactions have been eliminated. |  | **Cash and Cash Equivalents-**For purposes of reporting cash flows, cash and cash equivalents include cash, due from depository
institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less. Interest-bearing deposits in other depository institutions were $6,275,882 and $8,686,946 at June 30, 2002 and 2001, respectively.

**Investment and Mortgage-Backed Securities-**Debt securities classified as available for sale are carried at fair value. Their related
unrealized gains and losses, net of tax, are reported in accumulated other comprehensive income, a component of stockholders'
equity. Debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity
securities and reported at amortized cost. Debt securities that are bought and held principally for the purpose of selling in the near
term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. All securities have been classified as available for sale.

Premiums and discounts on debt securities are amortized or accreted as adjustments to income over the estimated life of the
security using the level yield method. Gain or loss on the sale of securities is based on the specific identification method. The
fair value of securities is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is
estimated using quoted market prices for similar securities.

The Company does not invest in collateralized mortgage obligations that are considered high risk.

The Bank is a member of the Federal Home Loan Bank system. As a member of this system, it is required to maintain an
investment in capital stock of the Federal Home Loan Bank (FHLB) in an amount equal to the greater of 1% of its outstanding
home loans, 0.3% of its total assets, or one-twentieth of its outstanding advances from FHLB.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

27

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**Loans Receivable, Net-**Loans receivable, net are stated at unpaid principal balances, less the allowance for loan losses, net
deferred loan origination fees, and deferred gain on sale of real estate.

Interest on loans is accrued based upon the principal amount outstanding. The accrual of interest on loans is discontinued when
in management's judgment, the collectibility of interest or principal in the normal course of business is doubtful. Interest income
previously accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. Cash
receipts on a nonaccrual loan are applied to principal and interest in accordance with its contractual terms unless full payment
of principal is not expected, in which case cash receipts, whether designated as principal or interest, are applied as a reduction
of the carrying value of the loan. A nonaccrual loan is generally returned to accrual status when principal and interest payments
are current, full collectibility of principal and interest is reasonably assured and a consistent record of performance has been
demonstrated.

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

In accordance with SFAS No. 114, Accounting by Creditor for Impairment of a Loan, as amended by SFAS No. 118, the
Company considers a loan impaired when, based upon current information and events, it is probable that it will be unable to
collect all amounts due, both principal and interest, according to the contractual terms of the loan agreement. SFAS No. 114 does
not apply to large groups of smaller-balance homogeneous loans that are collectively evaluated for impairment, which, for the
Company, include residential real estate loans and consumer loans. Valuation allowances are established for impaired loans for
the difference between the loan amount and fair value of collateral less estimated selling costs. Impaired loans are placed on
nonaccrual status at the point they become contractually delinquent 90 days or more and cash receipts are applied, and interest
income recognized, pursuant to the discussion above for nonaccrual loans. Impairment losses are recognized through an increase
in the allowance for loan losses.

**Loan Origination Fees-**Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as
an adjustment to interest income using the interest method over the contractual life of the loans. |  | **Foreclosed Real Estate-**Real estate acquired by foreclosure or by deed in lieu of foreclosure is initially recorded at the lower of
cost or fair value less estimated selling costs. Costs for development and improvement of the property are capitalized.

Valuations are periodically performed by management, and an allowance for losses is established by a charge to operations if
the carrying value of a property exceeds its estimated fair value, less estimated selling costs.

Loans to facilitate the sale of real estate acquired in foreclosure are discounted if made at less than market rates. Discounts are
amortized over the fixed interest period of each loan using the interest method.

**Income Taxes-**The Company and its subsidiary file consolidated income tax returns. Deferred income taxes are provided on
temporary differences between the financial reporting bases and income tax bases of the Company's assets and liabilities.

**Premises and Equipment-**Premises and equipment are stated at cost less accumulated depreciation and include expenditures for
major betterments and renewals. Maintenance, repairs, and minor renewals are expensed as incurred. When property is retired
or sold, the retired asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss taken
into income. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment loss
recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets.

Depreciation is computed by use of straight-line and accelerated methods over the estimated useful lives of the assets. Estimated
lives are generally twenty to forty years for premises, and five to seven years for equipment.

**Earnings Per Share-**Basic income per share is computed using the weighted-average number of common shares outstanding.
ESOP shares which have been committed to be released are considered outstanding.  Diluted income per share includes the effect
of all dilutive potential common shares (primarily stock options) outstanding during each year.

**Intangible Assets-**Intangible assets represents the premium paid in conjunction with the Bank's branch acquisitions. The premium
is being amortized over a fifteen year period.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**Segments-**Southern Missouri Bancorp, Inc., through the branch network of its subsidiary, Southern Missouri Bank & Trust,
provides a broad range of financial services to individuals and companies in Southeast Missouri. These services include demand,
time and savings deposits, and lending activities. While the Company's chief decision makers monitor the revenue streams of
the various Company products and services, operations are managed and financial performance is evaluated on a Company-wide
basis. Accordingly, all of the Company's banking operations are considered by management to be aggregated in one reportable
segment.

**The following paragraphs summarize the impact of new accounting pronouncements:**

In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations, effective for
all business combinations initiated after June 30, 2001, as well as all business combinations accounted for by the purchase method
that are completed after June 30, 2001. The new statement requires that the purchase method of accounting be used for all
business combinations and prohibits the use of the pooling-of-interests method. The adoption of Statement No. 141 is not
expected to have a material effect on the Company's financial position or results of operations.

In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. The statement changes the accounting for goodwill from an amortization method to an impairment-only
approach. Thus, amortization of goodwill, including goodwill recorded in past business combinations, will cease upon adoption
of this statement. However, the new statement did not amend SFAS No. 72, Accounting for Certain Acquisitions of Banking or
Thrift Institutions, which requires recognition and amortization of unidentified intangible assets relating to the acquisition of
financial institutions or branches thereof. The FASB has decided to undertake a limited scope project to reconsider the provisions
of SFAS No. 72 in 2002. Therefore, the adoption of Statement No. 142 is not expected to have a material effect on the
Company's financial position or results of operations. |  | In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, which requires that the fair value
of a liability be recognized when incurred for the retirement of a long-lived asset and the value of the asset be increased by that
amount. The statement also requires that the liability be maintained at its present value in subsequent periods and outlines certain
disclosures for such obligations. The adoption of this statement, which is effective January 1, 2003, is not expected to have a
material effect on the Company's financial statements.

In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No.
144 supercedes SFAS No. 121 and applies to all long-lived assets (including discontinued operations) and consequently amends
APB Opinion No. 30, Reporting Results of Operations-Reporting the Effects of Disposal of a Segment of a Business. SFAS No.
144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less costs
to sell. SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and,
generally, its provisions are to be applied prospectively. The adoption of this statement is not expected to have a material effect
on the Company's financial statements.

**NOTE 2:  Acquisitions and Divestitures**

In August 2000, the Bank purchased two full-service branches in Kennett and Qulin, Missouri, from Commerce Bancshares, Inc.
for $4.9 million in cash. The transaction which was accounted for as a purchase in accordance with SFAS No. 72, Accounting
for Certain Acquisitions of Bank and Thrift Acquisitions, included the acquisition of approximately $25.3 million in loans, $1.6
million in premises and equipment and the assumption of $44.7 million in deposits. The premium of $3.8 million is being
amortized over 15 years.

In September 2000, the Bank completed its divesture of its branches in Malden and Ellington, Missouri, resulting in a reduction
of the deposit base of approximately $13.2 million and a pre-tax gain of $633,538 recorded in other noninterest income.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

29

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 3:  Investment and Mortgage-Backed Securities**

Available for Sale - The amortized cost, gross unrealized gains, gross unrealized losses and estimated market value of securities available for sale consisted of the following: |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|                                                    | June 30, 2002
|--------------------------------------------------- | -------------
|                                                    | AmortizedCost
|                                                    |              
|Investment securities:                             
|U.S. government and Federal    agency obligations   | $  6,987,208 
|Obligations of states and    political subdivisions | 2,950,363    
|                                                    |              
|TOTAL INVESTMENT SECURITIES                         | 9,937,571    
|                                                    |              
|Mortgage-backed securities:                        
|FHLMC certificates                                  | 1,330,431    
|GNMA certificates                                   | 900,192      
|FNMA certificates                                   | 4,950,138    
|CMO's issued by government agencies                 | 14,176,937   
|CMO's issued by private issuer                      | 954,248      
|                                                    |              
|TOTAL MORTGAGE-BACKED SECURITIES                    | 22,311,946   
|                                                    |              
|TOTAL                                               | $ 32,249,517 
|                                                    |              
|                                                   

|                                                    | June 30, 2001
|--------------------------------------------------- | -------------
|                                                    | AmortizedCost
|                                                    |              
|Investment securities:                             
|U.S. government and Federal    agency obligations   | $   4,955,106
|Obligations of states and    political subdivisions | 3,796,472    
|                                                    |              
|TOTAL INVESTMENT SECURITIES                         | 8,751,578    
|                                                    |              
|                                                   
|Mortgage-backed securities:                        
|FHLMC certificates                                  | 1,823,691    
|GNMA certificates                                   | 1,436,790    
|FNMA certificates                                   | 479,853      
|CMO's issued by government agencies                 | 20,539,801   
|CMO's issued by private issuer                      | 1,697,034    
|                                                    |              
|TOTAL MORTGAGE-BACKED SECURITIES                    | 25,977,169   
|                                                    |              
|TOTAL                                               | $ 34,728,747 

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

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

|                                | June 30, 2002 
|------------------------------- | --------------
|**Available for Sale**          | AmortizedCost 
|                                |               
|Due in one year or less         | $      869,870
|Due after one year thru 5 years | 2,666,899     
|Due after 5 years thru 10 years | 6,400,802     
|                                |               
|Total investment securities     | 9,937,571     
|                                |               
|Mortgage-backed securities      | 22,311,946    
|                                |               
|TOTAL                           | $ 32,249,517  
|                                |               

|Proceeds from sales of investment and mortgage-backed securities and gross realized gains and losses are summarized below: |  | 
|-------------------------------------------------------------------------------------------------------------------------- |  | 

|                           | June 30   
|-------------------------- | ----------
|                           | 2002      
|                           |           
|Proceeds from sales:      
|Investment securities      | $        -
|Mortgage-backed securities | 3,389,315 
|                          
|Gross realized gains:     
|Investment securities      | -         
|Mortgage-backed securities | 35,207    
|                          
|Gross realized losses:    
|Investment securities      | -         
|Mortgage-backed securities | (33,841)  
|                          

|The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits amounted to
$14,873,673 and $12,080,527 at June 30, 2002 and 2001, respectively. |  | Adjustable rate mortgage loans included in mortgage-backed securities at June 30, 2002 and 2001 amounted to $1,266,620 and
$3,292,580, respectively.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

---

31

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 4:  Loans Receivable, net**

Loans receivable, net are summarized as follows: |  | 
|------------------------------------------------------------------------------------ |  | 

|                                  | June 30      
|--------------------------------- | -------------
|                                  | 2002         
|                                  |              
|Real estate loans:               
|Conventional                      | $ 120,051,233
|Construction                      | 3,083,069    
|Commercial                        | 43,035,949   
|Loans secured by deposit accounts | 696,545      
|Consumer loans                    | 18,081,802   
|Commercial                        | 29,273,348   
|                                  |              
|                                  | 214,221,946  
|Loans in process                  | (1,413,818   
|Deferred loan fees, net           | (27,274      
|Allowance for loan losses         | (1,569,266   
|                                  |              
|TOTAL                             | $ 211,211,588
|                                 

|Adjustable-rate loans included in the loan portfolio amounted to $86,117,489 and $90,801,530 at June 30, 2002 and 2001,
respectively.

One-to four-family residential real estate loans amounted to $118,300,466 and $107,809,992 at June 30, 2002 and 2001,
respectively. |  | Real estate construction loans are secured principally by single and multi-family dwelling units.

Commercial real estate loans are secured principally by commercial buildings, motels, medical centers, churches, fast food
restaurants and farmland.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

Following is a summary of activity in the allowance for loan losses:

|                                           | June 30    
|------------------------------------------ | -----------
|                                           | 2002       
|                                           |            
|Balance, beginning of period               | $ 1,461,684
|                                           |            
|Loans charged-off                          | (280,464   
|Recoveries of loans previously charged-off | 38,046     
|                                           |            
|Net charge-offs                            | (242,418   
|                                           |            
|Provision charged to expense               | 350,000    
|Acquired allowance for losses              | -          
|                                           |            
|Balance, end of period                     | $ 1,569,266

|The Company ceased recognition of interest income on loans with a book value of  $133,585, $0 and $537,000 at June 30, 2002,
2001 and 2000, respectively. The average balance of nonaccrual loans for the years ended June 30, 2002, 2001 and 2000 was
$80,000, $132,000 and $217,000 respectively. Allowance for losses on nonaccrual loans amounted to $13,350, $0 and $146,000
at June 30, 2002, 2001 and 2000. Interest income of approximately $1,000, $0 and $23,000 was recognized on these loans for
the years ended June 30, 2002, 2001 and 2000, respectively. Gross interest income would have been |  | approximately $13,000, $0
and $51,000 for the years ended June 30, 2002, 2001 and 2000, respectively, if the interest payments had been received in
accordance with the original terms. The Bank is not committed to lend additional funds to customers whose loans have been
placed on nonaccrual status.

Of the above nonaccrual loans at June 30, 2002, 2001 and 2000 none were considered to be impaired. There were no impaired
loans during the years ended June 30, 2002, 2001 and 2000.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Following is a summary of loans to directors, executive officers and loans to corporations in which executive officers and
directors have a substantial interest: |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|Balance, June 30, 2000 | $    803,878 |  
|---------------------- | ------------ | -
|Additions              | 973,570      |  
|Repayments             | (189,603     | )
|Balance, June 30, 2001 | 1,587,845    |  
|Additions              | 4,386,699    |  
|Repayments             | (2,433,634   | )
|Balance, June 30, 2002 | $ 3,540,910  |  

|These loans were made on substantially the same terms as those prevailing at the time for comparable transactions with
unaffiliated persons. |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | 

---

33

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

**NOTE 5:  Accrued Interest Receivable**

Accrued interest receivable is summarized as follows:

|                           | June 30   
|-------------------------- | ----------
|                           | 2002      
|                           |           
|Investment securities      | $  224,876
|Mortgage-backed securities | 116,812   
|Loans receivable           | 1,217,986 
|                           |           
|                           | $1,559,674
|                           |           

**NOTE 6:  Foreclosed Real Estate**

Foreclosed real estate consists of the following:

|                       | June 30 
|---------------------- | --------
|                       | 2002    
|                       |         
|Foreclosed real estate | $383,346
|Allowance for losses   | -       
|                       |         
|                       | $383,346
|                       |         

**NOTE 7:  Premises and Equipment**

Following is a summary of premises and equipment:

|                                  | June 30    
|--------------------------------- | -----------
|                                  | 2002       
|                                  |            
|Land                              | $ 1,128,160
|Buildings and improvements        | 4,317,345  
|Furniture, fixtures and equipment | 2,860,854  
|Automobiles                       | 28,733     
|Construction in progress          | 149,613    
|                                  |            
|                                  | 8,484,705  
|Less accumulated depreciation     | (2,641,025 
|                                  |            
|                                  | $ 5,843,680
|                                  |            

|Depreciation expense for the years ended June 30, 2002, 2001 and 2000 was $551,668, $413,087 and $263,726, respectively.

Construction in progress at June 30, 2002 consisted of remodeling at the main banking facility in Poplar Bluff, Missouri.
Estimated completion date is October 2002, at an additional cost of $250,000. |  | During 2001, an impairment loss of $125,338 was recognized on the abandonment of certain computer equipment and as a result
of a decrease in the market value of the Company's former office in Kennett, Missouri.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

**NOTE 8: Deposits**

Deposits are summarized as follows:

|                                                    | June 30     
|--------------------------------------------------- | ------------
|                                                    | 2002        
|                                                    |             
|Noninterest-bearing accounts                        | $10,207,129 
|NOW accounts                                        | 19,476,866  
|Money market deposit accounts                       | 18,974,105  
|Savings accounts                                    | 56,038,200  
|                                                    |             
|TOTAL TRANSACTION ACCOUNTS                          | $104,696,300
|                                                    |             
|Certificates:                                      
|1.00 - 1.99%                                        | 1,086,847   
|2.00 - 2.99%                                        | 37,449,560  
|3.00 - 3.99%                                        | 14,355,571  
|4.00 - 4.99%                                        | 17,579,422  
|5.00 - 5.99%                                        | 8,881,887   
|6.00 - 6.99%                                        | 4,832,442   
|7.00 - 7.99%                                        | 11,568      
|8.00 - 8.99%                                        | 53,259      
|                                                    |             
|Total certificates,  3.66%  and 5.53%, respectively | 84,250,556  
|                                                    |             
|TOTAL DEPOSITS                                      | $188,946,856
|                                                    |             
|WEIGHTED-AVERAGE RATES - DEPOSITS                   | 2.79        
|                                                    |             

|The aggregate amount of certificates of deposit with a minimum denomination of $100,000 was $20,020,253 and $12,864,088
at June 30, 2002 and 2001, respectively. |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|Certificate maturities at June 30, 2002 are summarized as follows: |  | 
|------------------------------------------------------------------ |  | 

|July 1, 2002 to June 30, 2003 | $56,860,155
|----------------------------- | -----------
|July 1, 2003 to June 30, 2004 | 7,764,595  
|July 1, 2004 to June 30, 2005 | 9,408,002  
|July 1, 2005 to June 30, 2006 | 1,082,681  
|July 1, 2006 to June 30, 2007 | 9,135,123  
|                              |            
|                              | $84,250,556
|                              |            

Interest expense on deposits is summarized as follows:

|                              | Year Ended June 30
|----------------------------- | ------------------
|                              | 2002              
|                              |                   
|NOW accounts                  | $   191,297       
|Money market deposit accounts | 467,015           
|Savings accounts              | 1,509,490         
|Certificates of deposit       | 3,462,601         
|                              |                   
|                              | $ 5,630,403       
|                              |                   

---

35

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 9:  Securities Sold Under Agreements to Repurchase**

Securities sold under agreements to repurchase, which are classified as borrowings, generally mature within one to four days.
The following table presents balance and interest rate information on the securities sold |  | under agreements to repurchase. Prior
to July 1, 2000, the Company had not entered into these types of contracts.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------

|                                          | June 30    
|----------------------------------------- | -----------
|                                          | 2002       
|                                          |            
|Year-end balance                          | $ 4,311,237
|Average balance during the year           | 4,694,000  
|Maximum month-end balance during the year | 5,453,003  
|Average interest during the year          | 2.13       
|Year-end interest rate                    | 1.75       

|The market value of the securities underlying the agreements at June 30, 2002 and 2001, was $5,684,663 and $4,377,104,
respectively. |  | The securities sold under agreements to repurchase are under the Company's control.
|------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------

**NOTE 10:  Advances from Federal Home Loan Bank of Des Moines**

Advances from Federal Home Loan Bank of Des Moines are summarized as follows:

|                      | June 30                       
|--------------------- | ------------------------------
|Maturity              | Call Date orQuarterlyThereafer
|2002                  |                               
|                     
|06-19-06              | -                             
|09-08-06              | -                             
|06-11-07              | -                             
|06-19-07              | -                             
|10-17-07              | -                             
|02-06-08              | 08-06-02                      
|10-26-09              | 09-01-02                      
|01-20-10              | 07-20-02                      
|10-27-10              | 10-27-03                      
|12-09-10              | 12-09-05                      
|                      |                               
|                      |                               
|                      |                               
|Weighted-average rate |                               
|                      |                               

|In addition to the above advances, the Bank had an available line of credit amounting to $48,716,000, $45,170,000 and
$33,672,000 with the FHLB at June 30, 2002, 2001 and 2000, respectively.

Advances from FHLB of Des Moines are secured by FHLB stock and one-to four-family mortgage loans of $56,400,000 and |  | $44,400,000 at June 30, 2002 and 2001, respectively. Scheduled principal maturities of advances from FHLB of Des Moines
are over the next four to nine years.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 11:  Employee Benefits**

The Bank has adopted a 401(k) profit sharing plan that covers substantially all eligible employees. Contributions to the plan are
at the discretion of the Board of Directors of the Bank. During 2002, 2001 and 2000, there were no contributions made to the
plan.

The Bank established a tax-qualified employee stock ownership plan (ESOP) in April 1994. The plan covers substantially all
employees who have attained the age of 21 and completed one year of service.

The Bank makes contributions to the ESOP equal to the ESOP's debt service less dividends on unallocated ESOP shares used
to repay the ESOP loan. Dividends on allocated ESOP shares are paid to participants of the ESOP. The ESOP shares are pledged
as collateral on the ESOP loan.

Shares are released from collateral and allocated to participants based on pro-rata compensation
as the loan is repaid over seven years. Effective |  | July 1, 1998, the loan terms were modified and principal payments were extended
an additional four years. Benefits are vested over five years. Forfeitures are allocated on the same basis as other contributions.
Benefits are payable upon a participant's retirement, death, disability or separation of service. The purchase of the shares of the
ESOP has been recorded in the consolidated financial statements through a credit to common stock and additional paid-in capital
with a corresponding charge to a contra equity account for the unreleased shares. As shares are committed to be released from
collateral, the Bank reports compensation expense equal to the average fair value of the ESOP shares committed to be released.
The ESOP expense for 2002, 2001 and 2000 was $117,173, $107,004, and $107,044, respectively.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The number of ESOP shares at June 30, 2002 and 2001 were as follows: |  | 
|-------------------------------------------------------------------- |  | 

|                  | 2002   | 2001  
|----------------- | ------ | ------
|                  |       
|Allocated shares  | 59,489 | 55,730
|Unreleased shares | 18,982 | 26,096
|                  |       
|TOTAL ESOP SHARES | 78,471 | 81,826
|                  |       

|The fair value of unreleased ESOP shares at June 30, 2002 was $365,404. |  | 
|----------------------------------------------------------------------- |  | 

---

|The Bank adopted a management recognition plan (MRP) for the benefit of non-employee directors and two MRPs for officers
and key employees (who may also be directors) in April 1994. Total shares in the MRP left to be issued are 5,118 at June 30,
2002. During 2002, 2001 and 2000, the Bank granted 0, 0 and 2,700 shares, respectively, to employees. The shares granted are
in the form of restricted stock payable at the rate of 20% of such shares per year. Compensation expense, in the amount of the
fair market value of the common stock at the date of grant, will be recognized pro-rata over the five years during which the shares
are payable.

The Board of Directors can terminate the MRPs at any time, and if it does so, any shares not allocated will revert to the Company.
The MRP expense for 2002, 2001 and 2000 was $14,035, $13,425 and $20,210, respectively. |  | The Company sponsors a stock option plan adopted in April 1994. The purpose of the plan is to provide additional incentive to
certain directors, officers and key employees of the Bank. In October 1999, the stockholders voted to increase the number of
shares reserved for options by 67,932 shares. The stock options are granted at the fair market value of the common stock on the
date of the grant. Through June 30, 1999, all options granted were 100% vested at the grant date. For shares granted since June
30, 1999, the vesting period range is from the grant date up to a five year period. All options expire ten years from the date of
the grant. At June 30, 2002, there are 41,932 shares remaining available for option grants. The weighted-average remaining
contractual life of options outstanding at June 30, 2002 is 5.6 years.

Changes in options outstanding were as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                          | Number ofShares |   | Weighted AverageExercise Price
| |  | ------------------------ | --------------- | - | ------------------------------
| | 
| |  | Balance at June 30, 1999 | 102,694         |   | $ 12.29                       
| |  | Granted                  | 31,491          |   | 13.48                         
| |  | Exercised                | (13,562         | ) | 10.00                         
| |  | Balance at June 30, 2000 | 120,623         |   | 12.86                         
| |  | Granted                  | 20,000          |   | 13.38                         
| |  | Exercised                | (19,566         | ) | 10.00                         
| |  | Forfeited                | (6,000          | ) | 13.00                         
| |  | Balance at June 30, 2001 | 115,057         |   | 13.40                         
| |  | Granted                  | 0               |   |                               
| |  | Exercised                | (13,000         | ) | 11.20                         
| |  | Forfeited                | (5,000          | ) | 14.00                         
| |  | Balance at June 30, 2002 | 97,057          |   | 13.67                         

---

37

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|The Company has estimated the fair value of awards granted under its stock option plan during 2002, 2001 and 2000 utilizing
the Black-Scholes pricing model.

For the options granted in 2002, 2001 and 2000, the Company has applied Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees. Accordingly, no compensation expense has been recognized for its stock-based
compensation plans. Had compensation cost for the Company's stock option plan been |  | determined based upon the fair value at
the grant date for awards under these plans consistent with the methodology prescribed under SFAS No. 123, Accounting for Stock-Based Compensation, the Company's net income and diluted earnings per share would have been
reduced by approximately $7,000, $19,000 and $62,000, or $.01, $.02 and $.05 per share in 2002, 2001 and 2000, respectively.

Following is a summary of the fair values of options granted using the Black-Scholes pricing model:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                               | 2002     |   | 2001     |   | 2000     |  
|------------------------------ | -------- | - | -------- | - | -------- | -
|                              
|Fair value at grant date       | $ 10,000 |   | $ 28,000 |   | $ 93,000 |  
|Assumptions:                  
|Expected dividend yield        | 5.00     | % | 5.00     | % | 5.00     | %
|Expected volatility            | 21.50    | % | 21.00    | % | 22.00    | %
|Risk-free interest rate        | 6.20     | % | 5.60     | % | 6.20     | %
|Weighted-average expected life | 5 years  |   | 5 years  |   | 5 years  |  

---

|The Bank adopted a directors' retirement plan in April 1994 for outside directors. The directors' retirement plan provides that
each non-employee director (participant) shall receive, upon termination of service on the Board on or after age 60, other than
termination for cause, a benefit in equal annual installments over a five year period. The benefit will be based upon the product
of the participant's vesting percentage |  | and the total Board fees paid to the participant during the calendar year preceding
termination of service on the Board. The vesting percentage shall be determined based upon the participant's years of service
on the Board, whether before or after the reorganization date, according to the following schedule:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Full Years of Serviceon the Board | Non-Employee Director'sVested Percentage | 
| |  | --------------------------------- | ---------------------------------------- | 
| |  |                                  
| |  | Less than 5                       | 0%                                      
| |  | 5 to 9                            | 50%                                     
| |  | 10 to 14                          | 75%                                     
| |  | 15 or more                        | 100%                                    

| |  | In the event that the participant dies before collecting any or all of the benefits, the Bank shall pay the participant's beneficiary.
No benefits shall be payable to anyone other than the beneficiary, and shall terminate on the death of the beneficiary.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|The following items are components of net pension costs for the years ended June 30, 2002, 2001 and 2000: |  | 
|--------------------------------------------------------------------------------------------------------- |  | 

|                                                       | 2002       |   | 2001      |   | 2000       |  
|------------------------------------------------------ | ---------- | - | --------- | - | ---------- | -
|                                                       |           
|Service cost - benefits earned  during the year        | $    6,027 |   | $   5,537 |   | $    4,062 |  
|Interest cost on benefit obligation                    | 11,916     |   | 12,258    |   | 11,998     |  
|Amortization of prior service cost  and net obligation | 0          |   | 0         |   | 0          |  
|Amortization of unrecognized gains                     | (1,015     | ) | (589      | ) | (1,148     | )
|                                                       |           
|Net pension cost                                       | $  16,928  |   | $ 17,206  |   | $   14,912 |  
|                                                       |           

|The following table sets forth the directors' retirement plan's funded status and amounts recognized in the consolidated financial statements at June 30, 2002 and 2001: |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 

|                                                          | 2002      | 2001     
|--------------------------------------------------------- | --------- | ---------
|                                                          |          
|Actuarial present value of benefit obligations:           |           |          
|Vested accumulated benefits                               | $ 140,575 | $ 150,414
|Non-vested accumulated benefits                           | 19,668    | 13,781   
|                                                          |          
|Total accumulated benefits                                | 160,243   | 164,195  
|Effect of projected future fee increases                  | -         | -        
|                                                          |          
|Projected benefit obligation for service rendered to date | 160,243   | 164,195  
|Unrecognized net gain                                     | 24,342    | 23,862   
|                                                          |          
|Accrued pension cost included in other liabilities        | $ 184,585 | $ 188,057
|                                                          |          

|A reconciliation of the projected benefit obligation and fair value of plan assets is summarized as follows at June 30, 2002 and 2001: |  | 
|-------------------------------------------------------------------------------------------------------------------------------------- |  | 

|                           | 2002                       |                         | 2001
|-------------------------- | -------------------------- | ----------------------- | ----
|                           | ProjectedBenefitObligation | Plan AssetsatFair Value |     
|                           |                            |                         |     
|Balance, beginning of year | $ 164,195                  | $      -                |     
|Service cost               | 6,027                      | -                       |     
|Interest cost              | 11,916                     | -                       |     
|Actual return              | -                          | -                       |     
|Actuarial gain             | (1,495)                    | -                       |     
|Contributions              | -                          | 20,400                  |     
|Benefits paid              | (20,400)                   | (20,400)                |     
|                           |                            |                         |     
|Balance, end of year       | $ 160,243                  | $     -                 |     
|                           |                            |                         |     

|                                            | 2002 |  | 2001 |  | 2000
|------------------------------------------- | ---- |  | ---- |  | ----
|                                            |     
|Weighted-average assumptions as of June 30: |      |  |      |  |     
|Discount rate                               | 7%   |  | 7%   |  | 7%  
|Rate of directors' fees increase            | 0%   |  | 0%   |  | 0%  

---

39

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 12:  Income Taxes**

SFAS No. 109 requires the Bank to establish a deferred tax liability for the tax bad debt reserves over the base year amounts.
The Bank's base year tax bad debt reserves are $1,799,626. The estimated deferred tax liability on such amount is approximately
$611,000, which has not been recorded in the accompanying Consolidated Financial Statements. |  | If these tax bad debt reserves
are used for other than loan losses, the amount will be subject to Federal income taxes at the then prevailing corporate rate.

The components of net deferred tax liabilities are summarized as follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                 | 2002      |   |  | 2001      |  
|---------------------------------------------------------------- | --------- | - |  | --------- | -
|                                                                 |          
|Deferred tax assets:                                            
|Provision for losses on loans and foreclosed real estate         | $ 458,939 |   |  | $ 411,972 |  
|Accrued compensation and benefits                                | 100,234   |   |  | 113,455   |  
|                                                                 |          
|Gross deferred tax assets                                        | 559,173   |   |  | 525,427   |  
|Valuation allowance                                              | -         |   |  | -         |  
|                                                                 |          
|Total deferred tax assets                                        | $ 559,173 |   |  | $ 525,427 |  
|                                                                 |          
|Deferred tax liabilities:                                       
|FHLB stock dividends                                             | $ 166,566 |   |  | $ 166,566 |  
|Purchase accounting adjustments                                  | 23,512    |   |  | 10,514    |  
|Premises and equipment, tax vs. book    accumulated depreciation | 211,842   |   |  | 107,020   |  
|Installment sale                                                 | 143,439   |   |  | 166,513   |  
|Unrealized gain on available for sale securities                 | 188,456   |   |  | 145,265   |  
|                                                                 |          
|Total deferred tax liabilities                                   | 733,815   |   |  | 595,878   |  
|                                                                 |          
|NET DEFERRED TAX LIABILITIES                                     | ($174,642 | ) |  | $ (70,451 | )
|                                                                 |          

Income taxes are summarized as follows:

|          | Year Ended June 30
|--------- | ------------------
|          | 2002              
|          |                   
|Current: 
|Federal   | $ 1,034,700       
|State     | 92,000            
|          |                   
|          | 1,126,700         
|          |                   
|Deferred:
|Federal   | 61,000            
|State     | 9,000             
|          |                   
|          | 70,000            
|          |                   
|          | $ 1,196,700       
|          |                   

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|The provision for income taxes varies from the amount of income tax determined by applying the statutory Federal income tax
rate to income before income taxes as a result of the following differences: |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|                                               | Year Ended June 30
|---------------------------------------------- | ------------------
|                                               | 2002              
|                                               |                   
|Tax at statutory Federal rate                  | $ 1,191,905       
|Increase (reduction) in taxes  resulting from:
|Nontaxable municipal income                    | (79,714           
|State tax, net of Federal benefit              | 72,700            
|Nondeductible ESOP expenses                    | 17,071            
|Other, net                                     | (5,262            
|                                               |                   
|ACTUAL PROVISION                               | $ 1,196,700       
|                                               |                   

|**NOTE 13: Comprehensive Income**

SFAS No. 130 Reporting Comprehensive Income requires the reporting of comprehensive income and its components.
Comprehensive income is defined as the change in equity from transactions and other events and circumstances from non-owner
sources, and excludes investments |  | by and distributions to owners. Comprehensive income includes net income and other items
of comprehensive income meeting the above criteria. Components of other comprehensive income are as follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                        | Year Ended June 30
|--------------------------------------------------------------------------------------- | ------------------
|                                                                                        | 2002              
|                                                                                        |                   
|Unrealized gains (losses) on  available for sale securities:                           
|Unrealized holding gains (losses)      arising during period                            | $ 118,098         
|Less:  reclassification      adjustments for (gains) losses      realized in net income | (1,366            
|                                                                                        |                   
|Total unrealized gains (losses)      on securities                                      | 116,732           
|Income tax expense (benefit)                                                            | 43,192            
|                                                                                        |                   
|Other comprehensive income (loss)                                                       | $   73,540        
|                                                                                        |                   

|At June 30, 2002, 2001 and 2000 accumulated other comprehensive income in the Statement of Financial Condition consisted
entirely of |  | unrealized gains (losses) on available for sale investment and mortgage-backed securities.
|------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------

---

41

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 14:  Stockholders' Equity and Regulatory Capital**

The Bank is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet
minimum capital requirements can result in certain mandatory -- and possibly additional discretionary -- actions by regulators
that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines
and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and
ratios |  | (set forth in the table below) of total capital and Tier I risk-based capital (as defined in the regulations) to risk-weighted
assets (as defined) and of Tier I capital (as defined) to average total assets (as defined). Management believes, as of June 30,
2002, that the Bank meets all capital adequacy requirements to which it is subject.

As of June 30, 2002, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well
capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must
maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table. There are no conditions
or events since that notification that management believes have changed the Bank's category.

The following table summarizes the Bank's actual and required regulatory capital:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands)                   | Actual   | For CapitalAdequacy Purposes | To Be WellCapitalized UnderPrompt CorrectiveAction Provisions
|---------------------------------------- | -------- | ---------------------------- | -------------------------------------------------------------
|                                         | Amount   | Ratio                        | Amount                                                       
|                                         |          |                              |                                                              
|As of June 30, 2002                     
|Total Capital (to Risk-Weighted Assets)  | $ 21,080 | 12.2%                        | $ 13,788                                                     
|Tier I Capital (to Risk-Weighted Assets) | 19,511   | 11.3%                        | 6,894                                                        
|Tier I Capital (to Average Assets)       | 19,511   | 7.5%                         | 10,385                                                       
|As of June 30, 2001                     
|Total Capital (to Risk-Weighted Assets)  | $ 20,290 | 14.0%                        | $ 11,554                                                     
|Tier I Capital (to Risk-Weighted Assets) | 18,828   | 13.0%                        | 5,777                                                        
|Tier I Capital (to Average Assets)       | 18,828   | 8.2%                         | 9,238                                                        

The Bank's ability to pay dividends on its common stock to the Company is restricted to maintain adequate capital as shown in
the above table.

|**NOTE 15:  Commitments and Contingencies**

In the ordinary course of business, the Bank has various outstanding commitments and contingent liabilities that are not reflected
in the accompanying Consolidated Financial Statements. The Bank is involved |  | in litigation of a routine nature which is being
defended and handled in the ordinary course of business. These matters are not considered significant to the Company's financial condition.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 16:  Off-Balance-Sheet and Credit Risk**

The Company's Consolidated Financial Statements do not reflect various financial instruments to extend credit to meet the
financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit.
These |  | instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the
statements of financial condition. A summary of the Company's commitments to extend credit and standby letters of credit is as follows:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             | Contract or Notional AmountJune 30
|---------------------------- | ----------------------------------
|                             | 2002                              
|                             |                                   
|Commitments to extend credit | $ 20,808,632                      
|Standby letters of credit    | $      362,779                    

|At June 30, 2002, total commitments to originate fixed-rate loans with terms in excess of one year were $1.2 million at interest
rates ranging from 6.75% to 8.0%. Commitments to extend credit and standby letters of credit include exposure to some credit
loss in the event of nonperformance of the customer. The Company's policies for credit  commitments and financial guarantees
are the same as those for extension of credit that are recorded in the statements of financial |  | condition. The commitments extend
over varying periods of time with the majority being disbursed within a thirty-day period.

The Company grants collateralized commercial, real estate, and consumer loans to customers in Southeast Missouri. Although
the Company has a diversified portfolio, loans aggregating $120,051,233 at June 30, 2002, are secured by single and multi-family
residential real estate in the Company's primary lending area.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|**NOTE 17:  Earnings Per Share**

The following table sets forth the computations of basic and diluted earnings per common share: |  | 
|--------------------------------------------------------------------------------------------------------------------------------- |  | 

|                                                                                    | Year Ended June 30
|----------------------------------------------------------------------------------- | ------------------
|                                                                                    | 2002              
|                                                                                    |                   
|Numerator - net income                                                              | $ 2,308,903       
|                                                                                    |                   
|Denominators                                                                       
|Denominator for basic earnings    per share -                                      
|Weighted-average shares      outstanding                                            | 1,192,612         
|Common equivalent shares due      to stock options under      treasury stock method | 22,397            
|                                                                                    |                   
|Denominator for diluted    earnings per share                                       | 1,215,009         
|                                                                                    |                   
|Basic earnings per common share                                                     | $     1.94        
|Diluted earnings per common share                                                   | $     1.90        

---

43

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 18:  Fair Value of Financial Instruments**

The carrying amounts and estimated fair values of the Company's financial instruments at June 30, 2002 and 2001, are
summarized as follows: |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|                                                                        | 2002            | 2001         
|----------------------------------------------------------------------- | --------------- | -------------
|                                                                        | CarryingAmount  | FairValue    
|                                                                        |                 |              
|Non-trading instruments and  nonderivatives:                           
|Cash and cash equivalents                                               | $     8,612,714 | $   8,612,714
|Investment and mortgage-      backed securities      available for sale | 32,758,857      | 32,758,857   
|Stock in FHLB of Des Moines                                             | 2,350,000       | 2,350,000    
|Loans receivable, net                                                   | 211,211,588     | 215,858,786  
|Accrued interest receivable                                             | 1,559,674       | 1,559,674    
|Deposits                                                                | 188,946,856     | 189,570,828  
|Securities sold under      agreements to repurchase                     | 4,311,237       | 4,311,237    
|Advances from FHLB of      Des Moines                                   | 47,000,000      | 50,287,000   
|Accrued interest payable                                                | 571,168         | 571,168      

|The following methods and assumptions were used in estimating the fair values of financial instruments:

Cash and cash equivalents are valued at their carrying amounts due to the relatively short period to maturity of the instruments.

Fair values of investments and mortgage-backed securities are based on quoted market prices or, if unavailable, quoted market
prices of similar securities.

Stock in FHLB of Des Moines is valued at cost, which represents redemption value and approximates fair value.

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

Deposits with no defined maturities, such as NOW accounts, savings accounts and money market deposit accounts, are valued
at the amount payable on demand at the reporting date.

The fair value of certificates of deposit is estimated using a discounted cash flow calculation that applies the rates currently
offered for deposits of similar remaining maturities.

The carrying amounts of securities sold under agreements to repurchase approximate fair value.

Fair value of advances from the FHLB of Des Moines is estimated by discounting maturities using an estimate of the current
market for similar instruments.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 19:  Condensed Parent Company Only Financial Statements**

The following condensed statements of financial condition and condensed statements of income and cash flows for Southern
Missouri |  | Bancorp, Inc. should be read in conjunction with the consolidated financial statements and the notes thereto.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------

|                                          | At June 30    
|----------------------------------------- | --------------
|**Statements of Financial Condition**     | 2002          
|                                          |               
|**Assets**                               
|Cash                                      | $  1,052,923  
|ESOP note receivable                      | 216,313       
|Other assets                              | 80,495        
|Equity in net assets of the Bank          | 23,200,003    
|                                          |               
|TOTAL ASSETS                              | $ 24,549,734  
|                                          |               
|**Liabilities and Stockholders' Equity** 
|Accrued expenses and other liabilities    | $       38,529
|                                          |               
|TOTAL LIABILITIES                         | 38,529        
|                                          |               
|Stockholders' equity                      | 24,511,205    
|                                          |               
|TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY | $ 24,549,734  
|                                          |               

|                                                                                | Year Ended June 30
|------------------------------------------------------------------------------- | ------------------
|**Statements of Income**                                                        | 2002              
|                                                                                |                   
|Interest income                                                                 | $     27,826      
|Dividend from Bank                                                              | 2,125,000         
|Other income                                                                    | -                 
|                                                                                |                   
|                                                                                | 2,152,826         
|Operating expenses                                                              | 196,524           
|                                                                                |                   
|Income before income taxes and    equity in undistributed income of    the Bank | 1,956,302         
|Income taxes                                                                    | (57,300)          
|                                                                                |                   
|Income before equity in undistributed    income of the Bank                     | 2,013,602         
|Equity in undistributed income of  the Bank                                     | 295,301           
|                                                                                |                   
|NET INCOME                                                                      | $ 2,308,903       
|                                                                                |                   

---

45

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|                                                                                        | Year Ended June 30
|--------------------------------------------------------------------------------------- | ------------------
|**Statements of Cash Flows**                                                            | 2002              
|                                                                                        |                   
|Cash flows from operating activities:                                                  
|Net income                                                                              | $  2,308,903      
|Adjustments to reconcile net income    to net cash provided by operating    activities:
|Equity in undistributed income    of the Bank                                           | (295,301)         
|Other adjustments, net                                                                  | (794)             
|                                                                                        |                   
|NET CASH PROVIDED BYOPERATING ACTIVITIES                                                | 2,012,808         
|                                                                                        |                   
|Cash flows from investing activities:                                                  
|Principal collected on loan to ESOP                                                     | 73,874            
|Purchase of investment security,    available for sale                                  | -                 
|Proceeds from sales and maturities    of investment securities, available    for sale   | -                 
|Proceeds from sales of other assets                                                     | -                 
|                                                                                        |                   
|NET CASH PROVIDED BYINVESTING ACTIVITIES                                                | 73,874            
|                                                                                        |                   
|Cash flows from financing activities:                                                  
|Dividends on common stock                                                               | (587,945)         
|Exercise of stock options                                                               | 145,410           
|Payments to acquire treasury stock                                                      | (1,142,399)       
|                                                                                        |                   
|NET CASH USED INFINANCING ACTIVITIES                                                    | (1,584,934)       
|                                                                                        |                   
|Net increase (decrease) in cash and  cash equivalents                                   | 501,748           
|Cash and cash equivalents at beginning  of period                                       | 551,175           
|CASH AND CASH EQUIVALENTSAT END OF PERIOD                                               | $  1,052,923      
|                                                                                        |                   

---

Notes to Consolidated Financial Statements(continued)

Southern Missouri Bancorp, Inc. and Subsidiary

|**NOTE 20:  Quarterly Financial Data (Unaudited)**

Quarterly operating data is summarized as follows (in thousands): |  | 
|--------------------------------------------------------------------------------------------------------------------- |  | 

|                           | June 30, 2002
|-------------------------- | -------------
|                           | FirstQuarter 
|                           |              
|Interest income            | $   4,317    
|Interest expense           | 2,317        
|                           |              
|Net interest income        | 2,000        
|Provision for loan losses  | 80           
|Noninterest income         | 203          
|Noninterest expense        | 1,377        
|                           |              
|Income before income taxes | 746          
|Income taxes               | 250          
|                           |              
|NET INCOME                 | $      496   
|                           |              
|                           | June 30, 2001
|                           | FirstQuarter 
|                           |              
|Interest income            | $   3,714    
|Interest expense           | 2,221        
|                           |              
|Net interest income        | 1,493        
|Provision for loan losses  | 170          
|Noninterest income         | 804          
|Noninterest expense        | 1,409        
|                           |              
|Income before income taxes | 718          
|Income taxes               | 267          
|                           |              
|Net income                 | $      451   
|                           |              

---

47

Corporate Information

|Corporate Headquarters531 Vine Street
Poplar Bluff, Missouri 63901Independent AuditorsKraft, Miles & Tatum, LLC
Poplar Bluff, Missouri 63901 | Special CounselSilver, Freedman & Taff, L.L.P.
Washington, D.C. 20007Transfer AgentRegistrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016 | Common StockNasdaq Stock Market
Nasdaq Symbol: SMBC
|-------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------

|Annual Meeting

The Annual Meeting of Stockholders will be held Monday, October 21, 2002, at 9:00 a.m., Central Time, at the Greater Poplar
Bluff Area Chamber of Commerce Building, 1111 West Pine, Poplar Bluff, Missouri 63901.

Annual Report on Form 10-KSB and Other Reports

A copy of the Company's annual report on Form 10-KSB, including financial statement schedules and our quarterly reports as
filed with the Securities and Exchange Commission, will be furnished without charge to stockholders as of the record date upon
written request to the Secretary, Southern Missouri Bancorp, Inc., 531 Vine Street, Poplar Bluff, Missouri 63901. These
documents also may be accessed through the SEC's website at www.sec.gov |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

---

Directors and Officers

|Seated left to right, James Tatum, Samuel Smith, Thadis Seifert, Leonard Ehlers. Standing left to right, Douglas Bagby, Greg
Steffens, Ronnie Black. Not shown, Sammy Schalk. | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

|SOUTHERN MISSOURI BANCORP, INC.                                                                                                                                                                                                                                                                                              
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Directors
Thadis R. Seifert
Chairman of the Board
Retired former executive vice president
  of Bank

Leonard M. Ehlers
Vice-Chairman
Retired court reporter of the 36th
  Judicial Circuit

Samuel H. Smith
Engineer and majority owner of
  S.H. Smith and Company, Inc.

James W. Tatum
Retired certified public accountant
|SOUTHERN MISSOURI BANK AND TRUST                                                                                                                                                                                                                                                                                             
|Directors
Samuel H. Smith
Chairman of the Board
Engineer and majority owner of
  S.H. Smith and Company, Inc.

James W. Tatum
Vice-Chairman
Retired certified public accountant

Thadis R. Seifert
Retired former executive vice president
  of Bank                                                                         

---

49

Southern Missouri Bancorp, Inc. (SMBC)

> is a single-bank holding company that now more than measures up to its peers on ROE and other financial performance
> benchmarks. This has come about through the establishment of a strong management team, continuing emphasis on growing core
> businesses, and the addition of new systems, services and offices that make Southern Missouri Bank one of the leading financial
> institutions headquartered in Southeast Missouri.
> SOUTHERN MISSOURI BANCORP, INC.
> 531 Vine Street
> Poplar Bluff, Missouri  63902
> (573) 785-1421