<PAGE>
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-K
                           SPECIAL FINANCIAL REPORT


[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED]
         For the fiscal year ended June 30, 1996

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
     For the transition period from                      to 
                                    --------------------    --------------------

         Commission file number 0-21163


                               CBES Bancorp, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                     43-1753244
---------------------------------         --------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

    1001 North Jesse James Road, Excelsior Springs, Missouri        64024
-------------------------------------------------------------------------------
      (Address of principal executive offices)                    (Zip Code)


Registrant's telephone number, including area code:     (816) 630-6711
                                                    ----------------------------


          Securities Registered Pursuant to Section 12(b) of the Act:

                                      None
                                      ----

          Securities Registered Pursuant to Section 12(g) of the Act:
                     Common Stock, par value $.01 per share
                     --------------------------------------
                                (Title of class)

Pursuant to Rule 15d-2 of the Act, this annual report contains only financial
statements for the fiscal year ended June 30, 1996.
<PAGE>
 
                                    PART IV
                                    -------


Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
          -----------------------------------------------------------------

 
(a) (1)  Financial Statements:
----------------------------- 

 
Pursuant to Rule 15d-2 of the Act, this annual report contains only financial
statements for the fiscal year ended June 30, 1996 as the certified financial
reports for the year ended June 30, 1996 were not yet available when the
Registration Statement on Form SB-2 (File 333-6649) was filed on June 21, 1996.


                                       2
<PAGE>
 
                          COMMUNITY BANK OF EXCELSIOR
                           SPRINGS, A SAVINGS BANK,
                                AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI



                       CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 1996 AND 1995


                  (WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE>
 
KPMG Peat Marwick LLP

           1000 Walnut, Suite 1600
           P.O. Box 13127
           Kansas City, MO 64199



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


The Board of Directors
Community Bank of Excelsior Springs,
  a Savings Bank:


We have audited the accompanying consolidated balance sheets of Community Bank
of Excelsior Springs, a Savings Bank, and subsidiary as of June 30, 1996 and
1995 and the related consolidated statements of earnings, equity and cash flows
for the years then ended. These consolidated financial statements are the
responsibility of Community Bank's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Community Bank of
Excelsior Springs, a Savings Bank, and subsidiary as of June 30, 1996 and 1995
and the results of their operations and their cash flows for the years then
ended, in conformity with generally accepted accounting principles.


                                             KPMG Peat Marwick LLP



August 9, 1996
<PAGE>
 
             COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                          CONSOLIDATED BALANCE SHEETS

<TABLE> 
<CAPTION>                                               
                                                                                     June 30,
                                                                              ----------------------
                        Assets                                                1996              1995
                        ------                                                ----              ----
<S>                                                                   <C>                   <C> 
Cash                                                                  $      683,769           604,665
Interest-bearing deposits in other financial institutions                  2,775,590         2,469,045 
Investment securities available-for-sale (note 2):
  U.S. government and agency obligations (amortized cost of
    $2,002,250 and $2,003,750 in 1996 and 1995, respectively)              1,974,500         1,962,320 
  Mutual fund (amortized cost of $0 and $1,078,676 in 1996
    and 1995, respectively)                                                        -         1,078,676
Investment securities held-to-maturity                                       100,000                 - 
Mortgage-backed securities held-to-maturity (estimated fair value of 
  $392,162 and $3,911,886 in 1996 and 1995, respectively)(note 3)            400,394         3,869,572
Loans held-for-sale, net                                                     366,000         1,518,908
Loans receivables, net (note 4)                                           79,043,759        77,361,061
Accrued interest receivable:  
  Loans receivable                                                           597,484           504,442
  Investment securities                                                       25,178            34,386
  Mortgage-backed securities                                                   3,175            33,223
Stock in Federal Home Loan Bank (FHLB), at cost                              810,700           794,700
Office property and equipment, net (note 5)                                1,272,907         1,288,352
Current income taxes receivable                                                    -             5,560
Deferred income tax benefit                                                   23,000                 -
Cash surrender value of life insurance and other assets                    1,753,504         1,581,076
                                                                      --------------        ----------
          Total assets                                                $   89,829,960        93,105,986 
                                                                      ==============        ==========

                         Liabilities and Equity
                         ----------------------

Liabilities:
  Deposits (note 6)                                                   $   68,169,560        68,274,476
  FHLB advances (note 7)                                                  12,000,000        15,876,915
  Accrued expenses and other liabilities                                     525,177           477,188
  Accrued interest payable on deposits                                       111,227           104,769
  Advance payments by borrowers for property taxes and insurance             691,797           864,780
  Current income taxes payable                                               266,309                 -
  Deferred income taxes (note 8)                                                   -            27,000
                                                                      --------------        ----------

          Total liabilities                                               81,764,070        85,625,128

Equity:
  Retained earnings, substantially restricted (notes 10, 11 and 12)        8,082,540         7,505,716
  Unrealized losses on available-for-sale securities, net of tax             (16,650)          (24,858)
                                                                      --------------        ----------
          Total equity                                                     8,065,890         7,480,858
Commitments (note 4)                                                  --------------        ----------

          Total liabilities and equity                                $   89,829,960        93,105,986
                                                                      ==============        ==========
</TABLE> 

See accompanying notes to consolidated financial statements.
<PAGE>
             COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK, 
                                AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                      CONSOLIDATED STATEMENTS OF EARNINGS

<TABLE> 
<CAPTION> 
                                                                                           Years ended June 30,                    
                                                                                          ----------------------                   
                                                                                           1996            1995                    
                                                                                           ----            ----                    
<S>                                                                                  <C>                 <C>                       
Interest income:                                                                                                                   
     Loans receivable                                                                $  6,457,691        5,249,045                 
     Mortgage-backed securities                                                           135,461          304,343                 
     Investment securities                                                                100,448          173,022                 
     Loans held-for-sale                                                                   57,315           25,820                 
     Other                                                                                 72,957           65,633                 
                                                                                        ---------        ---------                 
               Total interest income                                                    6,823,872        5,817,863                 
                                                                                        ---------        ---------                 
                                                                                                                                   
Interest expense:                                                                                                                  
     Deposits (note 6)                                                                  3,251,677        2,577,149                 
     FHLB advances                                                                        753,745          568,783                 
                                                                                        ---------        ---------                 
               Total interest expense                                                   4,005,422        3,145,932                 
                                                                                        ---------        ---------                 
                                                                                                                                   
               Net interest income                                                      2,818,450        2,671,931                 
                                                                                                                                   
Provision for loan losses (note 4)                                                        235,828          171,277                 
                                                                                        ---------        ---------                 
               Net interest income after provision for loan losses                      2,582,622        2,500,654                 
                                                                                        ---------        ---------                  
                                                                                                                                   
Noninterest income:                                                                                                                
     Gain on sales of loans, net                                                          184,899           42,106                 
     Customer service charges                                                             197,577          193,017                 
     Loan servicing fees                                                                   92,247           73,774                 
     Net realized gain on sale of investment and mortgage-backed                                                                   
          securities available-for-sale                                                    54,205            -                     
     Writedown of investment in mutual fund (note 2)                                        -             (314,148)                
     Other                                                                                127,161          101,940                 
                                                                                       ----------        ---------                 
               Total noninterest income                                                   656,089           96,689                 
                                                                                       ----------        ---------                 
                                                                                                                                   
Noninterest expense:                                                                                                               
     Compensation, payroll taxes and fringe benefits (note 9)                           1,203,276        1,080,572                 
     Office property and equipment                                                        274,213          245,411                 
     Data processing                                                                      171,257          162,722                 
     Federal insurance premiums                                                           157,259          139,020                 
     Advertising                                                                           60,253           55,875                 
     Real estate owned and repossessed assets                                              14,351           23,243                 
     Other                                                                                457,902          425,704                 
                                                                                       ----------       ----------                 
               Total noninterest expense                                                2,338,511        2,132,547                 
                                                                                       ----------       ----------                 
                                                                                                                                   
               Earnings before income taxes                                               900,200          464,796                 
                                                                                                                                   
Income taxes (note 8)                                                                     323,376          301,238                 
                                                                                       ----------       ----------                 
               Net earnings                                                          $    576,824          163,558                 
                                                                                       ==========       ==========                  
</TABLE> 

See accompanying notes to consolidated financial statements.
<PAGE>
             COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                       Consolidated Statements of Equity

<TABLE> 
<CAPTION>   
                                                 
                                                                              Unrealized                                       
                                                            Retained           Losses on                       
                                                            earnings,      available-for-sale                   
                                                          substantially        securities                       
                                                           restricted          net of tax             Total       
                                                           ----------          ----------             -----
<S>                                                      <C>              <C>                       <C> 
Balance at June 30, 1994                                 $  7,342,158            (361,222)          6,980,936

Net earnings                                                  163,558               -                 163,558
Writedown of investment in mutual fund                          -                 314,148             314,148
Decrease in unrealized loss on available-for-sale
  securities, net of tax                                        -                  22,216              22,216
                                                         ------------           ---------         -----------  
Balance at June 30, 1995                                    7,505,716             (24,858)          7,480,858

Net earnings                                                  576,824               -                 576,824
Decrease in unrealized loss on available-for-sale
  securities, net of tax                                        -                   8,208               8,208
                                                         ------------           ---------         ===========

Balance at June 30, 1996                                 $  8,082,540             (16,650)          8,065,890
                                                         ============           =========         ===========
</TABLE> 

See accompanying notes to consolidated financial statements.

<PAGE>
 
             COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE> 
<CAPTION> 
                                                                                               Years ended June 30,
                                                                                              ----------------------
                                                                                              1996             1995
                                                                                              ----             ----
<S>                                                                                  <C>                 <C> 
Cash flows from operating activities:                                                
     Net earnings                                                                    $        576,824         163,558
     Adjustments to reconcile net earnings to net cash provided by
       operating activities:
          Provision for loan losses                                                           235,828         171,277
          Depreciation                                                                        132,335         118,250
          Net realized gain on sale of securities available-for-sale                          (54,205)         -
          Writedown of investment in mutual fund                                               -              314,148
          Gain on disposition of real estate owned, net                                        -               (5,822)
          Proceeds from sale of loans held for sale                                        16,276,153       4,763,106
          Origination of loans held for sale                                              (14,938,346)     (6,134,640)
          Gain on sale of loans, net                                                         (184,899)        (42,106)
          Premium amortization and accretion of discounts and deferred
            loan fees                                                                        (282,871)       (301,901)
          Deferred income (benefit) taxes                                                     (55,472)         21,464
          FHLB stock dividends                                                                (16,000)         -
          Changes in assets and liabilities:
            Accrued interest receivable                                                       (53,786)       (183,758)
            Other assets                                                                     (172,428)        (28,821)
            Accrued expenses and other liabilities                                             47,989         180,940
            Accrued interest payable on deposits                                                6,458          42,933
            Current income taxes payable                                                      271,869         (56,737)
                                                                                        -------------    ------------
             Net cash provided by (used in) operating activities                            1,789,449        (978,109)
                                                                                        -------------    ------------


Cash flows from investing activities:
     Net increase in loans receivable                                                      (1,632,432)    (23,956,731)
     Purchase of investment securities held-to-maturity                                      (100,000)         -
     Purchase of FHLB stock                                                                    -             (273,500)
     Proceeds from sales of securities available-for-sale                                   4,046,846          -
     Mortgage-backed securities principal repayments                                          553,490         964,384
     Change in FHLB time deposits                                                              -            1,600,000
     Purchase of office property and equipment                                               (116,890)       (213,041)
     Proceeds from sale of real estate owned                                                   -               29,772
     Purchase of life insurance policies                                                       -           (1,420,000)
                                                                                        -------------    ------------
             Net cash provided by (used in) investing activities                     $      2,751,014     (23,269,116)
                                                                                        -------------    ------------
</TABLE> 

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVING BANK
                                AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

               CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

<TABLE> 
<CAPTION> 
                                                                               Years ended June 30,      
                                                                             ------------------------    
                                                                             1996                1995    
                                                                             ----                ----    
<S>                                                                     <C>                  <C>         
Cash flows from financing activities:                                                                    
   (Decrease) increase in deposits                                      $   (104,916)          8,094,031  
   Proceeds from FHLB advances                                            23,650,000          32,000,000 
   Repayments of FHLB advances                                           (27,526,915)        (16,123,085) 
   Increase in advance payments by borrowers for property taxes and                 
      insurance                                                             (172,983)             62,911
                                                                         -----------         ----------- 
             Net cash (used in) provided by financing activities          (4,154,814)         24,033,857
                                                                         -----------         ----------- 

             Net increase (decrease) in cash and cash equivalents            385,649            (213,368)

Cash and cash equivalents at the beginning of the period                   3,073,710           3,287,078
                                                                         -----------         ----------- 
Cash and cash equivalents at the end of the period                      $  3,459,359           3,073,710
                                                                         ===========         =========== 

Supplemental disclosure of cash flow information:              
   Cash paid during the period for income taxes                         $    122,000             336,510
                                                                         ===========         =========== 

   Cash paid during the period for interest                             $  3,998,964           3,102,999
                                                                         ===========         ===========   

Supplemental schedule of noncash investing and financing activities:   
      Conversion of loans to real estate owned                          $     -                   10,897  
                                                                         ===========         ===========  

      Loans made to finance sales of real estate owned                  $     -                   68,000 
                                                                         ===========         ===========  
</TABLE> 

See accompanying notes to consolidated financial statements.
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JUNE 30, 1996 AND 1995


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

     (a)  Organization
          ------------

     The consolidated financial statements include the accounts of Community
          Bank of Excelsior Springs, a Savings Bank, and its wholly-owned
          subsidiary, CBES Service Corporation, collectively referred to as
          Community Bank. Community Bank of Excelsior Springs is chartered as a
          federal mutual savings bank. CBES Service Corporation was formed in
          March 1993 to provide insurance services. All significant intercompany
          balances and transactions have been eliminated in consolidation.

     (b)  Cash and Cash Equivalents
          -------------------------

     For purposes of the cash flows, all investments with a maturity of three
          months or less at date of purchase are considered cash equivalents.

     (c)  Mortgage-backed and Investment Securities
          -----------------------------------------

     Community Bank classifies securities as either available-for-sale or held-
          to-maturity. Held-to-maturity securities are those which Community
          Bank has the positive intent and ability to hold to maturity. All
          other securities are classified as available-for-sale.

     Securities classified as held-to-maturity are recorded at amortized cost.
          Securities classified as available-for-sale are recorded at fair value
          with unrealized net holding gains and losses, net of the related tax
          effect, excluded from earnings and reported as a separate component of
          equity until realized.  A decline in the market value of any security
          below cost that is deemed other than temporary is charged to income,
          resulting in the establishment of a new cost basis for the security.

     Pursuant to Statement of Financial Accounting Standards (SFAS) No. 115,
          "Accounting for Certain Investments in Debt and Equity Securities,"
          and implementation guidance issued in November 1995 by the Financial
          Accounting Standards Board, Community Bank reclassified certain held-
          to-maturity mortgage-backed securities with aggregate cost and fair
          value of $2,913,965 and $2,963,159, respectively, to available-for-
          sale on December 5, 1995.  These securities were sold on December 11,
          1995.

     Premiums and discounts on mortgage-backed and investment securities are
          amortized using the interest method over the life of the securities.

     Realized gains or losses on sales are recognized using the specific
          identification method.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     (d)  Loans Held-for-Sale
          -------------------

     Mortgage loans originated and intended for sale in the secondary market are
          carried at the lower of cost or estimated fair value.  Fees received
          on such loans are deferred and recognized in income as part of the
          gain or loss on sale.  At June 30, 1996 and 1995, all loans held for
          sale were committed to be sold to a third party.  There was no
          valuation allowance at June 30, 1996 or 1995.

     (e)  Deferred Loan Fees and Costs
          ----------------------------

     Loan fees and certain direct loan origination costs are deferred, and the
          net fee or cost is recognized as interest income using the interest
          method over the contractual life of the loan for loans generated for
          Community Bank's portfolio.

     (f)  Allowance for Losses
          --------------------

     The allowance for loan losses is established through provision for loan
          losses charged against income. Loans deemed to be impaired are charged
          against the allowance for loan losses, and subsequent recoveries, if
          any, are credited to the allowance.

     A valuation allowance for losses on loans is established by management
          based on its estimate of the amount required to maintain an adequate
          allowance for loan losses reflective of the risks in the loan
          portfolio. This estimate is based on reviews of the loan portfolio,
          including assessment of the estimated net realizable value of the
          related underlying collateral of and consideration of past loan loss
          experience, current economic conditions and such other factors which,
          in the opinion of management, deserve current recognition. Loans are
          also subject to periodic examination by regulatory agencies. Such
          agencies may require charge-off or additions to the allowance based
          upon their judgments about information available at the time of their
          examination.

     Additionally, it is Community Bank's policy to place loans delinquent, as
          to principal, over ninety days on nonaccrual status and exclude
          interest on such loans from income. Interest ultimately collected is
          credited to income in the period received.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Community Bank adopted SFAS No. 114, "Accounting by Creditors for
          Impairment of a Loan," and SFAS No. 118, "Accounting by Creditors for
          Impairment of a Loan - Income Recognition and Disclosures," on July 1,
          1995. SFAS No. 114, as amended by SFAS No. 118, defines the
          recognition criteria for loan impairment and the measurement methods
          for certain impaired loans and loans for which terms have been
          modified in troubled-debt restructurings (a restructured loan).
          Specifically, a loan is considered impaired when it is probable a
          creditor will be unable to collect all amounts due - both principal
          and interest - according to the contractual terms of the loan
          agreement. When measuring impairment, the expected future cash flows
          of an impaired loan are required to be discounted at the loan's
          effective interest rate. Alternatively, impairment can be measured by
          reference to an observable market price, if one exists, or the fair
          value of the collateral for a collateral-dependent loan. Regardless of
          the historical measurement method used, SFAS No. 114 requires a
          creditor to measure impairment based on the fair value of the
          collateral when the creditor determines foreclosure is probable.
          Additionally, impairment of a restructured loan is measured by
          discounting the total expected future cash flows at the loan's
          effective rate of interest as stated in the original loan agreement.

     Community Bank applies the recognition criteria of SFAS No. 114 to
          multifamily real estate loans, commercial real estate loans and
          restructured loans. Smaller balance, homogeneous loans, including one-
          to-four-family residential and construction loans and consumer loans,
          are collectively evaluated for impairment. SFAS No. 118 amends SFAS
          No. 114 to allow a creditor to use existing methods for recognizing
          interest income on impaired loans. Community Bank has elected to
          continue to use its existing nonaccrual methods for recognizing
          interest on impaired loans. The adoption of SFAS No. 114 and No. 118
          resulted in no prospective adjustment to the allowance for loan losses
          and did not affect Community Bank's policies regarding charge-offs or
          recoveries. The impact of these statements on the consolidated
          financial statements of Community Bank was immaterial.

     (g)  Real Estate Owned
          -----------------

     Real estate properties acquired through foreclosure are initially recorded
          at the lower of cost or the fair value, less estimated costs to sell,
          of the underlying collateral at the time of foreclosure. Subsequent to
          foreclosure, further declines in the fair value of such properties are
          recorded as a reduction to the carrying value of those assets through
          the establishment of an allowance for losses.

     (h)  Stock in Federal Home Loan Bank (FHLB)
          --------------------------------------

     Community Bank is a member of the FHLB system. As a member, it is required
          to purchase and hold stock in the FHLB of Des Moines in an amount
          equal to the greater of (a) 1% of unpaid residential loans at the
          beginning of each year, (b) 5% of FHLB advances, or (c) .3% of total
          assets. Community Bank's investment in such stock is recorded at cost.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     (i)  Office Property and Equipment
          -----------------------------

     Office property and equipment are stated at cost less accumulated
          depreciation. Depreciation is provided using the straight-line method
          over the estimated useful lives (three to thirty years) of the
          respective assets.

     Maintenance and repairs are charged to expense and betterments are
          capitalized. Gains and losses on disposition are reflected in current
          operations.

     (j)  Income Taxes
          ------------

     Community Bank accounts for income taxes under the asset and liability
          method. Deferred tax assets and liabilities are recognized for the
          future tax consequences attributable to differences between the
          financial statement carrying amounts of existing assets and
          liabilities and their respective income tax bases. The effect on
          deferred tax assets and liabilities for a change in tax rate is
          recognized in income in the period that includes the enactment dates.

     (k)  Use of Estimates
          ----------------

     Management of Community Bank 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 these consolidated
          financial statements in conformity with generally accepted accounting
          principles.  Actual results could differ from those estimates.

     (l)  Effect of New Financial Accounting Standards
          --------------------------------------------

     SFAS No. 122, "Accounting for Mortgage Servicing Rights," will be effective
          for Community Bank for the year beginning July 1, 1996 and generally
          requires entities that sell or securitize loans and retain the
          mortgage servicing rights to allocate total cost of the mortgage loans
          to the mortgage servicing right and the loan based on their relative
          fair value. Costs allocated to mortgage servicing rights should be
          recognized as a separate asset and amortized over the period of
          estimated net servicing income and evaluated for impairment based on
          fair value. The adoption of this statement is not expected to have a
          material effect on the consolidated financial statements.

     SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets
          and Extinguishments of Liabilities," supersedes SFAS No. 122 and will
          be effective for all transfers and servicing of financial assets and
          extinguishments of liabilities occurring after December 31, 1996. This
          statement provides accounting and reporting standards for transfers
          and servicing of financial assets and extinguishments of liabilities
          based on consistent application of a financial-components approach
          that focuses on control. It distinguishes transfers of financial
          assets that are sales from transfers that are secured borrowings.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Under the financial-components approach, after a transfer of financial
          assets, an entity recognizes all financial and servicing assets it
          controls and liabilities it has incurred and derecognizes financial
          assets it no longer controls and liabilities that have been
          extinguished. The financial-components approach focuses on the assets
          and liabilities that exist after the transfer. Many of these assets
          and liabilities are components of financial assets that existed prior
          to the transfer. If a transfer does not meet the criteria for a sale,
          the transfer is accounted for as a secured borrowing with pledge of
          collateral. The adoption of this statement is not expected to have a
          material effect on the consolidated financial statements.

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

     A summary of investment securities available-for-sale at June 30, 1996 and
          1995 is as follows:

<TABLE>
<CAPTION>
                                                                                                  
                                                               Gross        Gross     Estimated   
                                                Amortized    unrealized  unrealized     fair      
                                                   cost        gains       losses       value     
                                               ------------  ----------  -----------  ---------   
          <S>                                  <C>           <C>         <C>          <C>         
          June 30, 1996:                                                                          
             U.S. government and                                                                  
                   agency obligations                                                             
                   maturing within one                                                            
                   year                          $1,000,000       -          (8,400)    991,600   
             U.S. government and                                                                  
                   agency obligations                                                             
                   maturing after one                                                             
                   year but within five                                                           
                   years                          1,002,250       -         (19,350)    982,900   
                                                 ----------  ----------     -------   ---------   
                                                 $2,002,250       -         (27,750)  1,974,500   
                                                 ==========  ==========     =======   =========   
                                                                                                  
          June 30, 1995:                                                                          
             U.S. government and                                                                  
                   agency obligations                                                             
                   maturing after one year                                                        
                   but within five years         $2,003,750       -         (41,430)  1,962,320   
             Mutual fund                          1,078,676       -            -      1,078,676   
                                                 ----------  ----------     -------   ---------   
                                                 $3,082,426       -         (41,430)  3,040,996   
                                                 ==========  ==========     =======   =========    
</TABLE>

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     During the year ended June 30, 1996, Community Bank recognized gross gains
          of $5,011 and no gross losses on proceeds of $1,083,687 from the sale
          of its investment in a mutual fund. No investment securities were sold
          during the year ended June 30, 1995.

     During the year ended June 30, 1995, management determined that the decline
          in market value of its mutual fund investment below cost was not
          temporary and, accordingly, adjusted the cost basis of the investment
          downward by $314,148 through a charge to earnings.

(3)  MORTGAGE-BACKED SECURITIES
     --------------------------

     Mortgage-backed securities held-to-maturity consisted of the following at
          June 30, 1996 and 1995:

<TABLE>
<CAPTION>
                                              Amortized       Unrealized     Unrealized        Estimated                         
                                                 cost           gains          losses         fair value      
                                                 ----           -----          ------         ----------     
          <S>                                 <C>             <C>            <C>              <C>               
          June 30, 1996:                                                                                      
             Federal Home Loan                                                                                
                 Mortgage Corporation                                                                         
                 (FHLMC) participation                                                                        
                 certificates                 $   397,558        1,425          (9,664)          389,319      
             Pass-through certificate                                                                         
                 guaranteed by Government                                                                     
                 National Mortgage                                                                            
                 Association (GNMA)                 2,836            7            -                2,843      
                                               ----------       ------         -------         ---------      
                                              $   400,394        1,432          (9,664)          392,162      
                                               ==========       ======         =======         =========      
                                                                                                              
          June 30, 1995:                                                                                      
             FHLMC participation                                                                              
                 certificates                 $ 3,507,847       21,606         (15,923)        3,513,530      
             Pass-through certificate                                                                         
                 guaranteed by GNMA               361,725       36,631           -               398,356      
                                               ----------       ------         -------         ---------      
                                              $ 3,869,572       58,237         (15,923)        3,911,886      
                                               ==========       ======         =======         =========      
</TABLE>

     During the year ended June 30, 1996, Community Bank recognized gross gains
          of $52,722 and gross losses of $3,528 on proceeds of $2,963,159 from
          the sale of mortgage-backed securities available-for-sale. See note
          1(c). No mortgage-backed securities were sold during the year ended
          June 30, 1995.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 
(4)  LOANS RECEIVABLE
     ----------------

     Loans receivable consisted of the following:

<TABLE>
<CAPTION>
                                                              June 30,        
                                                         ------------------   
                                                         1996          1995   
                                                         ----          ----   
               <S>                                    <C>           <C>       
               Real estate:                                                   
                  One-to-four family residential      $ 52,294,663  53,737,889
                  Construction                          22,460,608  16,221,145
                  Land                                   4,005,713   1,991,631
                  Commercial                             1,082,598     818,371
                  Multifamily                              315,304     134,412
                  Consumer loans                        10,572,028  11,296,068
                                                       -----------  ----------
                                                        90,730,914  84,199,516
               Less:                                                          
                  Loans in process                      11,015,102   6,390,936
                  Deferred loan origination fees                              
                      and discounts on loans, net          284,053     221,519
                  Allowance for loan losses                388,000     226,000
                                                       -----------  ----------
                                                      $ 79,043,759  77,361,061
                                                       ===========  ========== 
</TABLE>

     At June 30, 1996, Community Bank was committed to make first mortgage loans
          approximating $1,982,000, of which $190,000 was committed to be sold
          to a third party.  Fixed rate loan commitments approximated $1,691,000
          at June 30, 1996, with rates ranging from 7.75% to 9.00%.  Community
          Bank services mortgage loans for others amounting to approximately
          $31,080,000 and $25,743,000 at June 30, 1996 and 1995, respectively.

     At June 30, 1996 and 1995, Community Bank had loans of approximately
          $1,357,000 and $972,000 to directors, officers and management
          employees. During the years ended June 30, 1996 and 1995,
          approximately $633,000 and $328,000 of new loans were made and
          repayments totaled approximately $248,000 and $143,000, respectively.
          Such loans were made in accordance with Community Bank's normal
          lending practices.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK, 
                                AND SUBSIDIARY 
                         EXCELSIOR SPRINGS, MISSOURI 

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


A summary of activity in the allowance for loan losses for the years ended
     June 30, 1996 and 1995 is as follows:

<TABLE>                                                   
<CAPTION>                                                 
                                                         1996                     1995       
                                                      -----------               --------- 
               <S>                                    <C>                       <C>       
               Balance at beginning of year            $ 226,000                 163,000  
               Provision for loan losses                 235,828                 171,277  
               Charge-offs                              (107,408)               (171,386) 
               Recoveries                                 33,580                  63,109  
                                                       ---------                --------  
               Balance at end of year                  $ 388,000                 226,000  
                                                       =========                ========  
</TABLE>                                                   

     At June 30, 1996 and 1995, Community Bank had approximately $412,000 and
          $133,000, respectively, of nonaccruing loans.  For the years ended
          June 30, 1996 and 1995, gross interest income which would have been
          recorded had the nonaccruing loans been in accordance with their
          original terms amounted to $34,000 and $11,000, respectively.  The
          amount that was included in income on such loans was $28,000 and
          $7,000 for the years ended June 30, 1996 and 1995, respectively.

     Community Bank evaluates each customer's creditworthiness on a case-by-case
          basis.  Residential loans with a loan-to-value ratio exceeding 80% are
          required to have private mortgage insurance.  Community Bank's
          principal lending areas are the economically diverse communities
          northeast of Kansas City, Missouri.

(5)  OFFICE PROPERTY AND EQUIPMENT
     -----------------------------

     Office property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                   June 30,          
                                                       --------------------------------   
                                                           1996                  1995      
                                                       -----------            ---------   
               <S>                                    <C>                     <C>         
               Land and land improvements             $  171,130                171,130   
               Office buildings                        1,321,053              1,281,997   
               Furniture and equipment                   769,455                691,621  
                                                      ----------              ---------  
                                                       2,261,638              2,144,748  
                                                                                           
               Less accumulated depreciation             988,731                856,396  
                                                      ----------              ---------  
                                                      $1,272,907              1,288,352  
                                                      ==========              =========  
</TABLE>                                                          
                                                                    (Continued) 
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 
(6)  DEPOSITS
     --------

     Deposit balances are summarized as follows:

<TABLE>
<CAPTION>
                                                                                 June 30,                                 
                                                           ------------------------------------------------               
                                                                   1996                     1995                          
                                                           ---------------------     ----------------------               
          <S>                                <C>           <C>            <C>        <C>         <C>                      
          Balance by interest rate:                                                                                       
             Noninterest bearing                                                                                          
                 demand accounts                        -    $ 1,378,795      2%    $ 1,319,904          2%               
             NOW accounts                    2.25 -  2.00      7,967,617     12       7,601,014         11                
             Money market                    2.50 -  2.75      6,235,135      9       5,874,186          9                
             Passbook accounts               2.25 -  2.75      3,977,740      6       3,740,235          5                
                                                             -----------  -----     -----------  ---------                
                                                              19,559,287     29      18,535,339         27                
                                                             -----------  -----     -----------  ---------                
                                                                                                                          
          Certificate accounts:              2.00 -  2.99         13,462    -            22,732      -                  
                                             3.00 -  3.99          -        -           853,408          1                
                                             4.00 -  4.99      1,658,854      2       7,548,143         11                
                                             5.00 -  5.99     43,045,110     63      11,569,757         17                
                                             6.00 -  6.99      3,445,487      5      22,091,710         33                
                                             7.00 -  7.99        160,037    -         7,022,435         10                
                                             8.00 -  8.99        287,323      1         628,466          1                
                                              9.00 - 9.99          -        -             2,486      -                  
                                                             -----------  -----     -----------  ---------                
                                                              48,610,273     71      49,739,137         73                
                                                             -----------  -----     -----------  ---------                
                                                             $68,169,560    100%    $68,274,476        100%               
                                                             ===========  =====     ===========  =========                
                                                                                                                          
          Weighted average interest                                                                                       
             rate on savings deposits                                                                                     
             at period end                                                 4.47%                      4.84%               
                                                                           ====                       ====                
                                                                                                                          
          Contractual maturity of                                                                                         
             certificate accounts:                                                                                        
                 Under 12 months                             $38,189,808     79%    $39,609,558         80%               
                 12 to 24 months                               4,968,501     10       5,573,835         10                
                 24 to 36 months                               1,522,494      3       2,363,905          5                
                 36 to 48 months                                 866,610      2         474,964          1                
                 48 to 60 months                                 631,194      1         435,806          1                
                 Over 60 months                                2,431,666      5       1,281,069          3                
                                                             -----------  -----     -----------  ---------                
                                                             $48,610,273    100%    $49,739,137        100%               
                                                             ===========  =====     ===========  =========                
 
</TABLE> 

     Deposits of $100,000 or more totaled $4,074,000 and $3,132,000 at June 30,
          1996 and 1995, respectively.

 
     The components of interest expense on savings deposits for the years ended
          June 30, 1996 and 1995 are as follows:
          
<TABLE> 
<CAPTION> 
                                                        1996          1995              
                                                        ----          ----              
          <S>                                    <C>             <C>                                                
          NOW, passbook and money market         $   372,422       397,213              
          Certificate accounts                     2,879,255     2,179,936              
                                                   ---------     ---------              
                                                 $ 3,251,677     2,577,149              
                                                   =========     =========              
</TABLE>

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(7)  FHLB ADVANCES
     -------------
 
     Community Bank had the following debt outstanding from the Federal Home 
        Loan Bank of Des Moines at June 30, 1996 and 1995:

<TABLE>
<CAPTION>
                                                                      June 30,                                             
                                                              -------------------------                                    
                                                                  1996           1995                                       
                                                              -------------   ----------                                    
        <S>                                                <C>                <C>                                           
        $3,000,000 advances, interest at 6.14%                                                                             
         due September 2000                                $ 3,000,000             -                         
        $3,000,000 advance, interest at 8.00%                                                               
         due September 2009                                      -             2,919,860                     
        $2,500,000 advance, interest at 8.03%                                                                              
         due December 2009                                       -             2,457,055                      
        $2,000,000 advance, interest at 6.78%                                                                              
         due November 1995                                       -             2,000,000                      
        $1,000,000 advance, interest at 6.65%                                                                              
          due October 1995                                       -             1,000,000                                    
        $2,000,000 advance, interest at 5.81%                                                                              
         due October 1996                                    2,000,000             -                         
        $1,000,000 advance, interest at 5.78%                                                                              
          due June 1996                                          -             2,000,000                                    
        $1,000,000 advance, interest at 5.77%                                                                              
          due June 1997                                      1,000,000         1,000,000                                    
        $1,000,000 advance, interest at 5.86%                                                                              
          due June 1998                                      1,000,000         1,000,000                                    
        $10,000,000 line of credit, interest at                                                                            
          approximately 50 basis points above the                                                                            
          U.S. Treasury Bill rate (5.57% and                                                                                 
          6.46% at June 30, 1996 and 1995)                                                                  
          maturing  May 1997                                 5,000,000         3,500,000                    
                                                           -----------        ----------                    
                                                           $12,000,000        15,876,915                                    
                                                           ===========        ==========                                     
</TABLE> 

     The advances and lines of credit to the FHLB are collateralized by first
          mortgage loans.                                                    
                                                                             
     Scheduled maturities of FHLB advances are as follows:                    
 
<TABLE> 
<CAPTION> 
                      Year ending June 30,                  
                      --------------------                  
                      <S>                       <C>         
                          1997                  $ 8,000,000 
                          1998                    1,000,000 
                          2001                    3,000,000 
                                                ----------- 
                                                $12,000,000 
                                                ===========  
</TABLE>

                                              (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

     Components of income tax expense are as follows:

<TABLE>
<CAPTION>
                               Federal    State    Total
                             -----------  ------  --------
<S>                          <C>          <C>     <C>
Year ended June 30, 1996:
   Current                     $354,775   24,073  378,848
   Deferred                     (64,983)   9,511  (55,472)
                               --------   ------  -------
                               $289,792   33,584  323,376
                               ========   ======  =======
 
Year ended June 30, 1995:
   Current                     $257,355   34,334  291,689
   Deferred                       8,883      666    9,549
                               --------   ------  -------
                               $266,238   35,000  301,238
                               ========   ======  =======
</TABLE>

Income tax expense has been provided at effective rates of 35.9% and 64.8%
          (applied to earnings before taxes) for the years ended June 30, 1996
          and 1995, respectively.  The reasons for the differences between the
          effective tax rates and the corporate federal income tax rate of 34%
          are as follows:

<TABLE>
<CAPTION>
                                            Years ended
                                              June 30,
                                          ---------------
                                           1996      1995
                                          ------     ----
<S>                                       <C>        <C>
Federal income tax rate                    34.0%     34.0
Items affecting federal income tax rate:
   Writedown of investment in mutual          -      23.0
    fund
   Increase in cash surrender value of
       life insurance policies, net of
       nondeductible premiums              (1.6)       -
   State income tax net of federal          3.3       5.0
    benefit
   Other                                     .2       2.8
                                           ----      ----
       Effective income tax rate           35.9%     64.8
                                           ====      ====
</TABLE>

                                                    (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Deferred income taxes reflect the impact of "temporary differences" between
          amounts of assets and liabilities for financial reporting purposes and
          such amounts as measured by tax laws. Temporary differences which give
          rise to deferred tax assets and liabilities at June 30, 1996 and 1995
          are as follows:

          <TABLE>
          <CAPTION>
                                                         Years ended
                                                          June 30,
                                                    ---------------------
                                                       1996       1995
                                                    ----------  ---------
          <S>                                       <C>         <C>
          Accrued compensation                      $  33,000        -
          Allowance for loan losses                   127,000     56,000
          Unrealized losses on assets                  11,000     17,000
           available-for-sale
          Writedown of investment in mutual fund          -      129,000
          Other                                         1,000     17,000
                                                    ---------   --------
                 Deferred income tax asset before
                 valuation allowance                  172,000    219,000

          Valuation allowance                             -      107,000
                                                    ---------   --------
                 Deferred income tax asset            172,000    112,000
                                                    ---------   --------

          Loan origination fees                       (68,000)   (49,000)
          Fixed assets                                (65,000)   (51,000)
          Other                                       (16,000)   (39,000)
                                                    ---------   --------
             Deferred income tax liability           (149,000)  (139,000)
                                                    ---------   --------
                 Net deferred income tax benefit    $  23,000    (27,000)
                  (liability)                       =========   ========
          </TABLE>

The valuation allowance that was outstanding at the beginning of the fiscal year
          was eliminated due to reversal of the corresponding deductible
          temporary difference.

(9)  COMPENSATION AGREEMENTS
     -----------------------

Effective March 1995, Community Bank entered into deferred compensation
          agreements with members of the Board of Directors and Officers.  The
          agreements provide for monthly payments to the individuals or their
          beneficiary for between ten and fifteen years following retirement.
          The agreements are accounted for on an individual basis with the cost
          accrued over the individual's period of service.  Expense under the
          agreements for the years ended June 30, 1996 and 1995 was
          approximately $39,000 and $14,000, respectively.

The Directors/Officers and their beneficiaries are general unsecured creditors
          of Community Bank for all amounts due under these agreements.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(10) RETAINED EARNINGS
     -----------------

Retained earnings at June 30, 1996 and 1995 include approximately $1,700,000 for
          which no provision for federal income tax has been made.  This amount
          represents an allocation of income to bad debt deductions for income
          tax purposes only.  Reduction of amounts allocated for purposes other
          than income tax bad debt losses will create income for tax purposes
          only, which will be subject to the then current corporate income tax
          rate.

(11) REGULATORY CAPITAL REQUIREMENTS
     -------------------------------

Community Bank is subject to various regulatory capital requirements
          administered by the federal banking agencies.  Failure to meet minimum
          capital requirements can initiate certain mandatory, and possibly
          additional discretionary, actions by regulators that, if undertaken,
          could have a direct material effect on Community Bank's financial
          statements.  Under capital adequacy guidelines and the regulatory
          framework for prompt corrective action, Community Bank must meet
          specific capital guidelines that involve quantitative measures of
          Community Bank'  assets, liabilities and certain off-balance-sheet
          items as calculated under regulatory accounting practices.  Community
          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 Community Bank to maintain minimum amounts and ratios (set
          forth in the table below) of risk-based capital, as defined in the
          regulations, to risk-weighted assets, as defined, and of tangible and
          core capital, as defined, to total assets, as defined.  Management
          believes, as of June 30, 1996, that Community Bank meets all capital
          adequacy requirements to which it is subject.

As of June 30, 1996, the most recent notification from the Office of Thrift
          Supervision (OTS) categorized Community Bank as adequately capitalized
          under the regulatory framework for prompt corrective action.  To be
          categorized as adequately capitalized, Community Bank must maintain
          minimum total risk-based, tangible and core capital ratios as set
          forth in the table.  There are no conditions or events since that
          notification that management believes have changed the institution's
          category.

          <TABLE>
          <CAPTION>
                                                 Tangible       Core     Risk-based
                                               -------------  ---------  ----------
          <S>                                  <C>            <C>        <C>
          Regulatory capital:                    $8,083,000   8,083,000   8,101,000
          Minimum capital requirement:            1,348,000   2,696,000   5,528,000
                                                 ----------   ---------   ---------
                 Regulatory capital in
                 excess of minimum
                 capital requirement             $6,735,000   5,387,000   2,573,000
                                                 ==========   =========   =========

          Minimum capital requirement                   1.5%        3.0         8.0
                                                 ==========   =========   =========

          Community Bank regulatory capital             9.0%        9.0        11.7
                                                 ==========   =========   =========
          </TABLE>

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(12) PLAN OF CONVERSION
     ------------------

On May 14, 1996, Community Bank's Board of Directors approved a plan (Plan) to
          convert from a federally chartered mutual savings bank to a federally
          chartered stock savings bank, subject to approval by Community Bank's
          members.  The Plan, which includes formation of a holding company to
          own all of the outstanding stock of Community Bank, is subject to
          approval by the OTS and includes the filing of a registration
          statement with the Securities and Exchange Commission.  As of June 30,
          1996, Community Bank had incurred approximately $154,000 of costs
          related to this conversion which is included in other assets.  If the
          conversion is ultimately successful, actual conversion costs will be
          accounted for as a reduction in gross proceeds.  If the conversion is
          unsuccessful, the conversion costs will be expensed.

The Plan calls for the common stock of the holding company to be offered to
          various parties in a subscription offering at a price based on an
          independent appraisal of Community Bank.  It is anticipated that any
          shares not purchased in the subscription offering will be offered in a
          community offering.

Community Bank may not declare or pay a cash dividend if the effect thereof
          would cause its net worth to be reduced below either the amount
          required for the liquidation account discussed below or the regulatory
          capital requirements imposed by the OTS.

At the time of conversion, Community Bank will establish a liquidation account
          in an amount equal to its retained earnings as reflected in the latest
          statement of financial condition used in the final conversion
          prospectus.  The liquidation account will be maintained for the
          benefit of eligible account holders who continue to maintain their
          deposit accounts in Community Bank after conversion.  In the event of
          a complete liquidation of Community Bank, and only in such an event,
          eligible depositors who continue to maintain accounts shall be
          entitled to receive a distribution from the liquidation account before
          any liquidation may be made with respect to common stock.

(13) FAIR VALUE OF FINANCIAL INSTRUMENTS
     -----------------------------------

SFAS No. 107, "Disclosures About Fair Value of Financial Instruments," and SFAS
          No. 119, "Disclosure About Derivative Financial Instruments and Fair
          Value of Financial Instruments," require disclosure of estimated fair
          values of financial instruments, both assets and liabilities
          recognized and not recognized in the consolidated financial
          statements.  Fair value estimates have been made as of June 30, 1996
          based on then current economic conditions, risk characteristics of the
          various financial instruments and other subjective factors.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The following methods and assumptions were used to estimate the fair value of
          each class of financial instrument for which it is practicable to
          estimate that value:

          Cash and Cash Equivalents
          -------------------------

          The carrying amounts approximate fair value because of the short
          maturity of these instruments.

          Investment Securities and Mortgage-backed Securities
          ----------------------------------------------------

          The fair values of investment securities and mortgage-backed
          securities are estimated based on published bid prices or bid
          quotations received from securities dealers.

          Loans Receivable
          ----------------

          The fair values of loans receivable are estimated using the option-
          based approach.  Cash flows consist of scheduled principal, interest
          and prepaid principal.  Loans with similar characteristics were
          aggregated for purposes of these calculations.

          Accrued Interest
          ----------------

          The carrying amount of accrued interest is assumed to be its carrying
          value because of the short-term nature of these items.

          Stock in the FHLB
          -----------------

          The carrying amount of such stock is estimated to approximate fair
          value.

          Deposits
          --------

          The fair values of deposits with no stated maturity are deemed to be
          equivalent to amounts payable on demand.  The fair values of
          certificates of deposit are estimated based on the static discounted
          cash flow approach using rates currently offered for deposits of
          similar remaining maturities.

          FHLB Advances
          -------------

          The fair values of FHLB advances are estimated based on discounted
          values of contractual cash flows using the rates currently available
          to Community Bank for advances of similar remaining maturities. The
          carrying amount of the advances under the line of credit approximates
          fair value due to the short maturity.

                                                                     (Continued)
<PAGE>
 
              COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
                                 AND SUBSIDIARY
                          EXCELSIOR SPRINGS, MISSOURI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Fair value estimates of Community Bank's financial instruments as of June 30,
          1996 are set forth below:

          <TABLE>
          <CAPTION>

                                                      Carrying     Estimated
                                                       amount      fair value
                                                       ------      ----------
          <S>                                         <C>          <C>
          Cash and cash equivalents                   $ 3,459,359   3,459,000
                                                      ===========  ==========

          Investment securities                       $ 2,074,500   2,075,000
                                                      ===========  ==========

          Mortgage-backed securities                  $   400,394     392,000
                                                      ===========  ==========

          Loans receivable, net of loans in           $79,715,812  80,823,000
           process                                    ===========  ==========

          Accrued interest receivable                 $   625,837     626,000
                                                      ===========  ==========

          Stock in the FHLB                           $   810,700     811,000
                                                      ===========  ==========


          Deposits:
             Noninterest bearing demand deposit       $ 1,378,795   1,379,000
             Money market and NOW deposits             14,202,752  14,203,000
             Passbook accounts                          3,977,740   3,978,000
             Certificate accounts                      48,610,273  48,423,000
                                                      -----------  ----------
             Total deposits                           $68,169,560  67,983,000
                                                      ===========  ==========

          FHLB Advances                               $12,000,000  11,922,000
                                                      ===========  ==========

          Accrued interest payable                    $   111,227     111,000
                                                      ===========  ==========
          </TABLE>

Limitations
-----------

Fair value estimates are made at a specific point in time, based on relevant
          market information and information about the financial instruments.
          These estimates do not reflect any premium or discount that could
          result from offering for sale at one time Community Bank's entire
          holdings of a particular financial instrument.  Because no market
          exists for a significant portion of Community Bank's financial
          instruments, fair value estimates are based on judgments regarding
          future loss experience, current economic conditions, risk
          characteristics of various financial instruments and other factors.
          These estimates are subjective in nature and involve uncertainties and
          matters of significant judgment and therefore cannot be determined
          with precision.  Changes in assumptions could significantly affect the
          estimates.  Fair value estimates are based on existing balance sheet
          financial instruments without attempting to estimate the value of
          anticipated future business and the value of assets and liabilities
          that are not considered financial instruments.
<PAGE>
 
                                   SIGNATURES
                                   ----------


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

                                        CBES Bancorp, Inc.


Date: November 6, 1996                  By: /s/ Larry E. Hermreck
      ----------------                      ---------------------------
                                            Larry E. Hermreck
                                            Chief Executive Officer
                                            (Duly Authorized Representative)

 


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



/s/ Larry E. Hermreck                   /s/ Robert L. Lalumondier              
----------------------------------      ----------------------------------     
Larry E. Hermreck                       Robert L. Lalumondier                  
Chief Executive Officer                 Director                               
                                                                               
                                                                               
Date:  November 6, 1996                 Date:  November 6, 1996                
       ----------------                        ----------------                
                                                                               
                                                                               
/s/ Dennis D. Hartman                   /s/ Robert E. McCrorey                 
----------------------------------      ----------------------------------
Dennis D. Hartman                       Robert E. McCrorey                     
Controller and Chief Financial Officer  Chairman of the Board                  
                                                                               
                                                                               
Date:  November 6, 1996                 Date:  November 6, 1996                
       ----------------                        ----------------                
                                                                               
                                                                               
                                                                               
/s/ Richard N. Cox                      /s/ Edgar L. Radley                    
----------------------------------      ----------------------------------
Richard N. Cox                          Edgar L. Radley                        
Director                                Vice Chairman of the Board             
                                                                               
                                                                               
Date:  November 6, 1996                 Date:  November 6, 1996                
       ----------------                        ----------------                 
<PAGE>
 
/s/ Rodney G. Rounkles                  /s/ Cecil E. Lamb                      
----------------------------------      ----------------------------------
Rodney G. Rounkles                      Cecil E. Lamb                          
Director                                Director                               
                                                                               
                                                                               
Date:  November 6, 1996                 Date:  November 6, 1996                
       ----------------                        ----------------