| Southern Missouri Bancorp, Inc. (NASDAQ: SMBC)is the holding company for Southern Bank. The Company reported record earnings andasset growth in fiscal 2010, posted strong deposit growth,and maintained sound asset quality,thriving in a difficult environment. |
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| Letter to Shareholders                              | 2      |
|-----------------------------------------------------|--------|
| Common Share Data                                   | 7      |
| Financial Review                                    | 8      |
| Report of Independent                               |   |
|    Registered Public Accounting Firm | 19     |
| Consolidated Financial Statements                   | 20     |
| Notes to Consolidated Financial Statements          | 26     |
| Corporate and Investor Information                  | 48     |
| Directors and Officers                              | 49     |

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|                                                | 2010                                                                                                        | 2009                                                                          | CHANGE(%) |
|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------|-----------|
| EARNINGS (dollars in thousands)                     |                                                                                                        |                                                                          |      |
| Net interest income                                 | $               16,316           | $          14,097           | 15.7      |
| Provision for loan losses                           | 925                                                                                                         | 1,151                                                                         | -19.6     |
| Noninterest income                                  | 3,094                                                                                                       | 1,820                                                                         | 70.0      |
| Noninterest expense                                 | 12,498                                                                                                      | 9,219                                                                         | 35.6      |
| Income taxes                                        | 1,361                                                                                                       | 1,712                                                                         | -20.5     |
| Net income                                          | 4,626                                                                                                       | 3,835                                                                         | 20.6      |
| Effective dividend on preferred shares              | 510                                                                                                         | 289                                                                           | 76.5      |
| Net income available to common stockholders         | 4,116                                                                                                       | 3,546                                                                         | 16.1      |
| PER COMMON SHARE                                    |                                                                                                        |                                                                          |      |
| Net income:                                         |                                                                                                        |                                                                          |      |
| Basic                                               | $                 1.98 | $            1.67 | 18.6      |
| Diluted                                             | 1.95                                                                                                        | 1.67                                                                          | 16.8      |
| Tangible book value                                 | 16.62                                                                                                       | 14.82                                                                         | 12.1      |
| Closing market price                                | 15.01                                                                                                       | 9.95                                                                          | 50.9      |
| Cash dividends declared                             | .48                                                                                                         | .48                                                                           | -         |
| AT YEAR-END (dollars in thousands)                  |                                                                                                        |                                                                          |      |
| Total assets                                        | $             552,084                      | $        466,334                      | 18.4      |
| Loans, net of allowance                             | 418,683                                                                                                     | 368,993                                                                       | 13.5      |
| Reserves as a percent of nonperforming loans        | 1,358 %                                                                                                     | 502 %                                                                         |      |
| Deposits                                            | $             422,893                      | $        311,955                      | 35.7      |
| Stockholders’ equity                          | 45,649                                                                                                      | 42,008                                                                        | 8.7       |
| FINANCIAL RATIOS                                    |                                                                                                        |                                                                          |      |
| Return on average common stockholders’ equity | 11.85 %                                                                                                     | 11.38 %                                                                       |      |
| Return on average assets                            | 0.88                                                                                                        | 0.87                                                                          |      |
| Net interest margin                                 | 3.27                                                                                                        | 3.37                                                                          |      |
| Efficiency ratio                                    | 64.39                                                                                                       | 57.92                                                                         |      |
| Allowance for loan losses to loans                  | 1.06                                                                                                        | 1.07                                                                          |      |
| Equity to average assets at year-end                | 8.68                                                                                                        | 9.51                                                                          |      |
| OTHER DATA(1)                                       |                                                                                                        |                                                                          |      |
| Common shares outstanding                           | 2,087,976                                                                                                   | 2,087,976                                                                     |      |
| Average common and dilutive shares outstanding      | 2,105,292                                                                                                   | 2,124,369                                                                     |      |
| Common stockholders of record                       | 280                                                                                                         | 283                                                                           |      |
| Full-time equivalent employees                      | 133                                                                                                         | 108                                                                           |      |
| Assets per employee (in thousands)                  | $                4,151      | $           4,318      |      |
| Banking offices                                     | 14                                                                                                          | 10                                                                            |      |

|  |  |  |
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|  | Dear Shareholder,Southern Missouri Bancorpcontinued its strong performance infiscal 2010, thriving in a difficultenvironment. We achieved record profitabilityand record asset growth, progressed towards asignificant shift in our funding strategies, integratedour new northeast Arkansas branches, and continuedto build shareholder value.  |
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| we grew earning assets by 19.0%, offsetting a 10 basis point decline in our margin.  Our efficiency ratio was 64.4%, up from last year, as we incurred expenses to bring new facilities into our network, continued to pay more in FDIC premiums as a result of base assessment rate increases, and incurred some one-time charges related to asset retirement and early redemption of long-term debt. |  Return on common equity remains ahead of peer banksOur ROE was up slightly as competitor banks continued to struggle. |
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| (1) | Peer data is based on the average year-end figures (December) from SNL DataSource’s Index of publicly traded commercial banks and thrifts with assets of $100 million to $1 billion, headquartered in Missouri, Arkansas, Illinois, Iowa, Kansas, Kentucky, Nebraska, Oklahoma, and Tennessee. SMBC data is as of fiscal year-end (June). |
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| We improved book value per common share by 11.6% and tangible book value per common share by 12.1% in fiscal 2010.  As the financial markets stabilized and our results held up, our stock price benefited, up 50.9%, compared to an increase of 13.0% in the SNL Bank Index and a decline of 11.4% in the SNL Micro Cap Bank Index.  Meanwhile, we paid a dividend that represented a 3.2% return on our June 30, 2010, closing stock price of $15.01, and a 3.8% return on our average closing stock price for fiscal 2010.  | Tangible Book Value per share growth beats peersWe have regularly exceeded our peer banks (1) in thiskey measure of shareholder value. |
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| While the national economy appears to begin a fragile recovery, our local markets have remained relatively stable, and we’ve had fewer asset quality issues as a result. But our credit quality exceeds peers within our market area, also, and we attribute that to a strict focus on strong underwriting of quality loans. Despite the July 2009 acquisition of a troubled financial institution, we continued to show very solid asset quality. | Credit quality is soundProblem assets increased, but credit quality remained relatively strong. |
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| Ø | Opening a new loan production office in Springfield, Missouri.  Springfield is an attractive market located in southwest Missouri, outside our current footprint, and a logical next step for our organization to accomplish several strategic objectives: continued sound asset growth, meeting loan portfolio composition targets, and improving our market demographics. |
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| Ø | Improving profitability of our newly-acquired Arkansas branches.  After working through many of the acquired problem assets, it’s time to take advantage of our opportunities in those markets to achieve sound loan growth and contribute to the Company’s bottom line.                                                                                        |

| Ø | Enhancing our efficiency.  The legal and operational impact of the acquisition, the bank’s name change, and the costs of working through acquired problem assets, as well as an early payoff of a Federal Home Loan Bank (FHLB) advance, all contributed to increase our efficiency ratio to a level that does not meet our target.  We see opportunities for  improvement in this area in 2011. | Efficiency remains ahead of peersBut this is a ratio we intend to improve upon in 2011. |
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| Ø | Continuing to build shareholder value.  We believe our stock represents an attractive value for current and potential                                                                                                                                                                                                                                                                                                      |
|   | shareholders, and while we’d like to see better multiples, we know that if the Company continues to post solid returns, the stock price should, over time, move proportionally.                                                                                                                                                                                                                                                |

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| Fiscal 2010            | High   | Low                     | Close             | BookValue AtEnd ofPeriod | Market PriceTo Book Value | DividendsDeclared |
|------------------------|--------|-------------------------|-------------------|--------------------------|---------------------------|-------------------|
| 4th Quarter (6-30-10)  | $16.75 | $ 14.15                 | $15.01            | $17.39                   | 86.31%                    | $0.12             |
| 3rd Quarter (3-31-10)  | $14.50 | $ 11.80                 | $14.20            | $17.07                   | 83.19%                    | $0.12             |
| 2nd Quarter (12-31-09) | $11.80 | $ 10.80                 | $11.75            | $16.65                   | 70.57%                    | $0.12             |
| 1st Quarter (9-30-09)  | $12.15 | $   9.39 | $10.80            | $16.40                   | 65.85%                    | $0.12             |
| Fiscal 2009            |   |                    |              |                     |                      |              |
| 4th Quarter (6-30-09)  | $11.00 | $  8.99       | $  9.95 | $15.58                   | 63.86%                    | $0.12             |
| 3rd Quarter (3-31-09)  | $11.70 | $  7.63       | $10.80            | $15.16                   | 71.24%                    | $0.12             |
| 2nd Quarter (12-31-08) | $14.91 | $  9.87       | $11.09            | $14.75                   | 75.19%                    | $0.12             |
| 1st Quarter (9-30-08)  | $15.01 | $12.36                  | $13.05            | $14.23                   | 91.71%                    | $0.12             |
| Fiscal 2008            |   |                    |              |                     |                      |              |
| 4th Quarter (6-30-08)  | $15.89 | $11.21                  | $15.49            | $13.95                   | 111.04%                   | $0.10             |
| 3rd Quarter (3-31-08)  | $15.10 | $12.75                  | $15.10            | $13.95                   | 108.24%                   | $0.10             |
| 2nd Quarter (12-31-07) | $15.02 | $12.75                  | $13.99            | $13.76                   | 101.67%                   | $0.10             |
| 1st Quarter (9-30-07)  | $15.25 | $14.45                  | $14.96            | $13.35                   | 112.06%                   | $0.10             |

| BUSINESS OF THE COMPANY AND THE BANKSouthern Missouri Bancorp, Inc. (Southern Missouri or Company) is a Missouri corporation and owns all of the outstanding stock of Southern Bank (the Bank). The Company’s earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank.The Bank was originally chartered by the State of Missouri in 1887 and converted from a state-chartered stock savings and loan association to a Federally-chartered stock savings bank in 1995. In 1998, the Bank converted its charter to a state-chartered stock savings bank. Finally, in 2004, the Bank converted to a state chartered trust company with banking powers. The Bank’s deposit accounts are generally insured up to a maximum of $250,000 under current law by the Deposit Insurance Fund (DIF), which is administered by the Federal Deposit Insurance Corporation (FDIC).The Bank’s primary business consists of attracting deposits from the communities it serves and investing those funds in loans secured by one- to four-family residences, commercial real estate, commercial business and consumer loans. The Company’s results of operations are primarily dependent on its net interest margin, |   | which is the difference between the average yield on loans, mortgage-related securities and investments and the average rate paid on deposits, securities sold under agreements to repurchase and borrowings.The net interest margin is affected by economic, regulatory and competitive factors that influence interest rates, loan demand and deposits. Lending activities are funded through the attraction of deposit accounts consisting of checking accounts, passbook and statement savings accounts, money market deposit accounts, certificate of deposit accounts with terms of 60 months or less, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Des Moines, and, to a lesser extent, brokered deposits. As of June 30, 2010, the Bank conducted its business through its home office located in Poplar Bluff and thirteen full service branch facilities in Poplar Bluff (2), Van Buren, Dexter, Kennett, Doniphan, Sikeston, Matthews, and Qulin, Missouri, and Paragould, Jonesboro, Leachville, and Brookland, Arkansas. |
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| (dollars in thousands)                      |   | At June 30 |    |
|---------------------------------------------|--------|------------|---------|
| Financial Condition Data:                   |   | 2010       |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Total assets                                |   | $          | 552,084 |   |   | $ | 466,334 |   |   | $ | 418,188 |   |   | $ | 380,106 |   |   | $ | 350,808 |   |
| Loans receivable, net                       |   |       | 418,683 |   |   |   | 368,993 |   |   |   | 343,438 |   |   |   | 312,242 |   |   |   | 281,055 |   |
| Mortgage-backed securities                  |   |       | 34,334  |   |   |   | 40,269 |   |   |   | 28,006 |   |   |   | 10,723 |   |   |   | 14,440 |   |
| Cash, interest-bearing deposits             |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    and investment securities |   |       | 67,103  |   |   |   | 27,983 |   |   |   | 19,931 |   |   |   | 31,492 |   |   |   | 30,328 |   |
| Deposits                                    |   |       | 422,893 |   |   |   | 311,955 |   |   |   | 292,257 |   |   |   | 270,088 |   |   |   | 258,069 |   |
| Borrowings                                  |   |       | 73,869  |   |   |   | 102,498 |   |   |   | 85,854 |   |   |   | 71,758 |   |   |   | 57,296 |   |
| Subordinated debt                           |   |       | 7,217   |   |   |   | 7,217 |   |   |   | 7,217 |   |   |   | 7,217 |   |   |   | 7,217 |   |
| Stockholders’ equity                  |   |       | 45,649  |   |   |   | 42,008 |   |   |   | 30,472 |   |   |   | 28,714 |   |   |   | 26,554 |   |

| (dollars in thousands, except per share data) |   | For The Year Ended June 30 |   |
|-----------------------------------------------|--------|----------------------------|--------|
| Operating Data:                               |   | 2010                       |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Interest income                               |   | $                          | 27,541 |   |   | $ | 25,301 |   |   | $ | 25,327 |   |   | $ | 23,550 |   |   | $ | 20,363 |   |
| Interest expense                              |   |                       | 11,225 |   |   |   | 11,204 |   |   |   | 13,547 |   |   |   | 13,621 |   |   |   | 10,763 |   |
|                                          |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                           |   |                       | 16,316 |   |   |   | 14,097 |   |   |   | 11,780 |   |   |   | 9,929 |   |   |   | 9,600 |   |
| Provision for loan losses                     |   |                       | 925    |   |   |   | 1,151 |   |   |   | 723 |   |   |   | 633 |   |   |   | 500 |   |
|                                          |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income after                     |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    provision for loan losses   |   |                       | 15,391 |   |   |   | 12,946 |   |   |   | 11,057 |   |   |   | 9,296 |   |   |   | 9,100 |   |
|                                          |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income                            |   |                       | 3,094  |   |   |   | 1,820 |   |   |   | 2,412 |   |   |   | 2,207 |   |   |   | 2,144 |   |
| Noninterest expense                           |   |                       | 12,498 |   |   |   | 9,219 |   |   |   | 8,081 |   |   |   | 7,430 |   |   |   | 7,083 |   |
|                                          |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes                    |   |                       | 5,987  |   |   |   | 5,547 |   |   |   | 5,388 |   |   |   | 4,073 |   |   |   | 4,161 |   |
| Income taxes                                  |   |                       | 1,361  |   |   |   | 1,712 |   |   |   | 1,775 |   |   |   | 1,145 |   |   |   | 1,377 |   |
| Net income                                    |   | $                          | 4,626  |   |   | $ | 3,835 |   |   | $ | 3,613 |   |   | $ | 2,928 |   |   | $ | 2,784 |   |
|                                          |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: effective dividend on preferred stock   |   |                       | 510    |   |   |   | 289 |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Net income available to common stockholders   |   | $                          | 4,116  |   |   | $ | 3,546 |   |   | $ | 3,613 |   |   | $ | 2,928 |   |   | $ | 2,784 |   |
| Basic earnings per share available to         |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    common stockholders         |   | $                          | 1.98   |   |   | $ | 1.67 |   |   | $ | 1.64 |   |   | $ | 1.32 |   |   | $ | 1.25 |   |
| Diluted earnings per share available to       |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    common stockholders         |   | $                          | 1.95   |   |   | $ | 1.67 |   |   | $ | 1.63 |   |   | $ | 1.29 |   |   | $ | 1.24 |   |
| Dividends per share                           |   | $                          | .48    |   |   | $ | .48 |   |   | $ | .40 |   |   | $ | .36 |   |   | $ | .36 |   |

|                                   |   | At June 30 |   |
|----------------------------------------|--------|------------|--------|
| Other Data:                            |   | 2010       |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Number of:                             |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Real estate loans    |   |       | 3,282  |   |   |   | 2,957 |   |   |   | 2,868 |   |   |   | 2,795 |   |   |   | 2,808 |   |
|    Deposit accounts     |   |       | 25,353 |   |   |   | 22,069 |   |   |   | 20,560 |   |   |   | 19,978 |   |   |   | 18,845 |   |
|    Full service offices |   |       | 14     |   |   |   | 10 |   |   |   | 9 |   |   |   | 9 |   |   |   | 9 |   |

|                                                                                                                                                                               |   | At Or For The Year Ended June 30 |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|----------|
| Key Operating Ratios:                                                                                                                                                              |   | 2010                             |     |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Return on assets (net income   divided by average assets)                                                                                                           |   |                             | .88      | % |   |   | .87 | % |   |   | .92 | % |   |   | .80 | % |   |   | .80 | % |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average common equity (net   income available to common stockholders   divided by average common equity)                                   |   |                             | 11.85    |   |   |   | 11.38 |   |   |   | 12.06 |   |   |   | 10.49 |   |   |   | 10.83 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average equity to average assets                                                                                                                                                   |   |                             | 8.39     |   |   |   | 8.29 |   |   |   | 7.60 |   |   |   | 7.66 |   |   |   | 7.43 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate spread (spread   between weighted average rate on   all interest-earning assets and all   interest-bearing liabilities) |   |                             | 3.06     |   |   |   | 3.11 |   |   |   | 2.86 |   |   |   | 2.57 |   |   |   | 2.69 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin (net interest   income as a percentage of average   interest-earning assets)                                                     |   |                             | 3.27     |   |   |   | 3.37 |   |   |   | 3.17 |   |   |   | 2.90 |   |   |   | 2.96 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest expense to average assets                                                                                                                                              |   |                             | 2.38     |   |   |   | 2.09 |   |   |   | 2.05 |   |   |   | 2.05 |   |   |   | 2.03 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average interest-earning assets to   average interest-bearing liabilities                                                                                           |   |                             | 109.57   |   |   |   | 109.77 |   |   |   | 108.60 |   |   |   | 108.29 |   |   |   | 108.15 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to gross   loans (1)                                                                                                                      |   |                             | 1.06     |   |   |   | 1.07 |   |   |   | .92 |   |   |   | .76 |   |   |   | .66 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to   nonperforming loans (1)                                                                                                              |   |                             | 1,358.45 |   |   |   | 501.63 |   |   |   | 53,316.67 |   |   |   | 9,180.77 |   |   |   | 3,545.28 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net charge-offs (recoveries) to average   outstanding loans during the period                                                                                       |   |                             | .10      |   |   |   | .10 |   |   |   | (0.03 | ) |   |   | .04 |   |   |   | .19 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of nonperforming assets   to total assets (1)                                                                                                                 |   |                             | .37      |   |   |   | .29 |   |   |   | .02 |   |   |   | .04 |   |   |   | .08 |   |
|                                                                                                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common shareholder dividend   payout ratio (common dividends as a   percentage of earnings available to   common shareholders)        |   |                             | 24.35    |   |   |   | 28.27 |   |   |   | 24.49 |   |   |   | 27.50 |   |   |   | 28.80 |   |

| OVERVIEWSouthern Missouri Bancorp, Inc. is a Missouri corporation originally organized for the principal purpose of becoming the holding company of Southern Missouri Savings Bank. The Bank converted from a Federally-chartered stock savings bank to a state-chartered stock savings bank effective February 17, 1998. The Company’s state of incorporation changed from Delaware to Missouri effective April 1, 1999. On June 4, 2004, the Bank converted to a state chartered trust company with banking powers, and the Company became a bank holding company supervised by the Federal Reserve. On June 1, 2009, the Bank changed its name to Southern Bank.The principal business of Southern Bank consists of attracting deposits from the general public and using such deposits along with advances from the Federal Home Loan Bank of Des Moines (FHLB) to finance mortgage loans secured by one- to four-family residences, commercial real estate loans and commercial business loans. These funds have also been used to purchase investment securities, mortgage-backed securities (MBS), U.S. government and federal agency obligations and other permissible securities.Southern Bank’s results of operations are primarily dependent on the levels of its net interest margin and noninterest income, and its ability to control operating expenses. Net interest margin is dependent primarily on the difference or spread between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, as well as the relative amounts of these assets and liabilities. Southern Bank is subject to interest rate risk to the degree that its interest-earning assets mature or reprice at different times, or on a varying basis, from its interest-bearing liabilities.Southern Bank’s noninterest income consists primarily of fees charged on transaction and loan accounts, interchange income from customer debit and ATM card use, gains on sales of loans to the secondary market, and increased cash surrender value of bank owned life insurance (“BOLI”). Southern Bank’s operating expenses include: employee compensation and benefits, occupancy expenses, legal and professional fees, federal deposit insurance premiums, amortization of intangible assets, and other general and administrative expenses. Southern Bank’s operations are significantly influenced by general economic conditions including monetary and fiscal policies of the U.S. government and the Federal Reserve Board. Additionally, Southern Bank is subject to policies and regulations issued by financial institution regulatory agencies including the Federal Reserve, the Missouri Division of Finance, and the Federal Deposit Insurance Corporation. Each of these factors may influence interest rates, loan demand, prepayment rates and deposit flows. Interest rates available on competing investments as well as general market interest rates influence the Bank’s cost of funds. Lending activities are affected by the demand for real estate and other types of loans, which in turn is affected by the interest rates at which such financing may be offered. The Bank intends to continue to focus on its lending programs for one- to four-family residential real estate, commercial real estate, commercial business and consumer financing on loans secured by properties or collateral located primarily in southeast Missouri and northeast Arkansas. FORWARD-LOOKING STATEMENTSThis document, including information incorporated by reference, contains forward-looking statements about the Company and its subsidiaries |   | which we believe are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements with respect to anticipated future operating and financial performance, growth opportunities, interest rates, cost savings and funding advantages expected or anticipated to be realized by management. Words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and similar expressions are intended to identify these forward looking statements. Forward-looking statements by the Company and its management are based on beliefs, plans, objectives, goals, expectations, anticipations, estimates and the intentions of management and are not guarantees of future performance. The important factors we discuss below, as well as other factors discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and identified in our filings with the SEC and those presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document:• the strength of the United States economy in general and the strength of the local economies in which we conduct operations;• the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; • inflation, interest rate, market and monetary fluctuations; • the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services; • the willingness of users to substitute our products and services for   products and services of our competitors;• the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance); • the impact of technological changes;• acquisitions;• changes in consumer spending and saving habits; and• our success at managing the risks involved in the foregoing.The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise. CRITICAL ACCOUNTING POLICIESThe Company has established various accounting policies, which govern the application of accounting principles generally accepted in the United States of America in the preparation of our financial statements. Our significant accounting policies are described in the footnotes to the Consolidated Financial Statements. Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and estimates that could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.The allowance for losses on loans represents management’s best estimate of probable losses in the existing loan portfolio. The allowance for losses on loans |
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| is increased by the provision for losses on loans charged to expense and reduced by loans charged off, net of recoveries.The provision for losses on loans is determined based on management’s assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experience, the level of classified and nonperforming loans and the results of regulatory examinations.Integral to the methodology for determining the adequacy of the allowance for loan losses is portfolio segmentation and impairment measurement. Under the Company’s methodology, loans are first segmented into 1) those comprising large groups of smaller-balance homogeneous loans, including single-family mortgages and installment loans, which are collectively evaluated for impairment and 2) all other loans which are individually evaluated. Those loans in the second category are further segmented utilizing a defined grading system which involves categorizing loans by severity of risk based on conditions that may affect the ability of the borrowers to repay their debt, such as current financial information, collateral valuations, historical payment experience, credit documentation, public information, and current trends. The loans subject to credit classification represent the portion of the portfolio subject to the greatest credit risk and where adjustments to the allowance for losses on loans as a result of provisions and charge-offs are most likely to have a significant impact on operations.A periodic review of selected credits (based on loan size and type) is conducted to identify loans with heightened risk or probable losses and to assign risk grades. The primary responsibility for this review rests with the loan administration personnel. This review is supplemented with periodic examinations of both selected credits and the credit review process by applicable regulatory agencies. The information from these reviews assists management in the timely identification of problems and potential problems and provides a basis for deciding whether the credit represents a probable loss or risk that should be recognized.Loans are considered impaired if, based on current information and events, it is probable that Southern Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans is generally based on the fair value of the collateral for collateral-dependent loans. If the loan is not collateral-dependent, the measurement of impairment is based on the present value of expected future cash flows discounted at the historical effective interest rate or the observable market price of the loan. In measuring the fair value of the collateral, management uses the assumptions (i.e., discount rates) and methodologies (i.e., comparison to the recent selling price of similar assets) consistent with those that would be utilized by unrelated third parties. Impairment identified through this evaluation process is a component of the allowance for loan losses. If a loan that is individually evaluated for impairment is found to have none, it is grouped together with loans having similar characteristics (i.e., the same risk grade), and an allowance for loan losses is based upon historical average charge-offs for similar loans over the past five years, the historical average charge-off rate for developing trends in the economy, in industries and other factors. For portfolio loans that are evaluated for impairment as part of homogenous pools, an allowance is maintained based upon the average charge-offs for the past five years.      Changes in the financial condition of individual borrowers, in economic conditions, in historical loss experience and in the conditions of the various |   | markets in which collateral may be sold may all affect the required level of the allowance for losses on loans and the associated provision for losses on loans. FINANCIAL CONDITIONGeneral. The Company’s total assets increased $85.8 million, or 18.4%, to $552.1 million at June 30, 2010, when compared to $465.3 million at June 30, 2009. The growth was due to growth in the net loan portfolio of $49.7 million, growth in cash and equivalents of $25.3 million, and growth in available for sale investments of $6.8 million. Asset growth was funded by growth in deposit balances of $110.9 million, growth in repurchase agreement balances of $6.6 million, and an increase in equity of $3.6 million. The growth in deposits also funded a $35.3 million paydown in FHLB advances.Cash and equivalents.  Cash and equivalents increased $25.3 million, or 313.4%, to $33.4 million at June 30, 2010, from $8.1 million at June 30, 2009. The growth was primarily comprised of excess balances held at the Federal Reserve, and was attributed to strong deposit growth during the fiscal year.Loans. Loans increased $49.7 million, or 13.5%, to $418.7 million at June 30, 2010, from $369.0 million at June 30, 2009. The growth in the loan portfolio was comprised principally of commercial real estate loans of $24.4 million, construction loans of $11.2 million, commercial loans of $8.4 million, consumer loans of $3.2 million, and residential real estate loans of $3.0 million.Allowance for Loan Losses. The allowance for loan losses increased $516,000, or 12.9%, from $4.0 million at June 30, 2009, to $4.5 million at June 30, 2010.  The allowance for loan losses represented 1.06% of gross loans receivable at June 30, 2010, as compared to 1.07% of gross loans receivable at June 30, 2009. At June 30, 2010, nonperforming loans, which included loans past due greater than 90 days and nonaccruing loans, were $332,000, compared to $796,000 at June 30, 2009 (see also, Provision for Loan Losses, under Comparison of Operating Results for the Years Ended June 30, 2010 and 2009).Investments. The investment portfolio increased $6.8 million, or 11.3%, to $67.0 million at June 30, 2010, from $60.2 million at June 30, 2009. Investment growth was comprised primarily of U.S. government agencies and obligations of state and political subdivisions, and was partially offset by principal repayments on mortgage-backed securities (MBSs) and collateralized mortgage obligations (CMOs).Premises and Equipment. Premises and equipment decreased $485,000, to $7.7 million at June 30, 2010, from $8.1 million at June 30, 2009. The decrease was due to the sale of property previously acquired for future expansion and increased accumulated depreciation, partially offset by investment in buildings and equipment, including four new locations acquired in the July 2009 acquisition of the Southern Bank of Commerce (the July 2009 Acquisition).BOLI. The Bank purchased “key person” life insurance policies on six employees with a cash surrender value of $4.0 million in February, 2003. In addition, in October, 2004, the Bank purchased “key person” life insurance policies on 20 employees for $2.0 million. At June 30, 2010, the cash surrender value had increased to $7.8 million.Intangible Assets. Intangible assets generated through branch acquisitions in 2000 decreased $255,000 to $1.3 million as of June 30, 2010, and will continue to be amortized in accordance with ASC Topic 350.  The July 2009 acquisition resulted in goodwill of $126,000, which will not be amortized, but will be tested for impairment at least annually, and a $184,000 core deposit intangible, which is being amortized over a five-year period using the straight-line method.Deposits. Deposits increased $110.9 million, or 35.6%, to $422.9 million at June 30, 2010, from $312.0 million at June 30, 2009. The deposit growth was  |
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| primarily comprised of increases in interest checking accounts of $38.6 million, certificate of deposit balances of $32.2 million, and passbook and statement savings accounts of $31.8 million.  The increase in interest checking balances was attributed to the success of the Bank’s rewards checking product, and the increase in certificates and savings accounts was attributed to the July 2009 acquisition, followed by promotion of an above-market savings account product at those new locations for much of the fiscal year.  Brokered CDs totaled $7.0 million at June 30, 2010, compared to $5.8 million at June 30, 2009.  During fiscal 2010, public unit deposits increased by $11.5 million. Average interest-bearing deposits carried an average rate of 2.23% in fiscal 2010, compared to 2.64% in fiscal 2009.Borrowings. FHLB advances decreased $35.3 million, or 44.8%, to $43.5 million at June 30, 2010, from $78.8 million at June 30, 2009. The decrease was attributed to cash availability resulting from deposit growth and reasonable prepayment fees.  At June 30, 2010, outstanding advances included no overnight or short term borrowings, compared to $6.3 million in overnight and short-term borrowings at June 30, 2009. Of the $43.5 million in advances, the entire amount carries fixed interest rates, and $34.5 million is subject to early redemption by the issuer.  At June 30, 2010, long-term FHLB advances had a weighted average maturity of 4.8 years, compared to 3.8 years at June 30, 2009. At June 30, 2010, all FHLB advances had a weighted-average cost of 4.48%, as compared to 4.31% at June 30, 2009.Subordinated Debt. In March 2004, $7.0 million of Floating Rate Capital Securities of Southern Missouri Statutory Trust I with a liquidation value of $1,000 per share were issued. The securities mature in March 2034, were redeemable beginning in March 2009, and bear interest at a floating rate of three month LIBOR plus 275 basis points.Stockholders’ Equity. The Company’s stockholders’ equity increased by $3.6 million, or 8.7%, to $45.6 million at June 30, 2010, from $42.0 million at June 30, 2009. This increase was due to net income of $4.6 million, and a $470,000 increase in the market value of the investment portfolio, net of tax, and was partially offset by common and preferred dividend payments of $1.5 million. The Company completed its most recently announced share repurchase program on November 19, 2008, and has not announced a new repurchase plan. Due to the Company’s participation in the CPP, new repurchase activity is restricted. COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2010 AND 2009Net Income. The Company’s net income available to common stockholders for the fiscal year ended June 30, 2010, was $4.1 million, an increase of $569,000, or 16.1%, from the $3.5 million net income available to common stockholders for the prior fiscal year.  Before an effective dividend on preferred shares of $510,000, net income was $4.6 million for the 2010 fiscal year, an increase of $791,000, or 20.6%, compared to the $3.8 million in net income for the prior fiscal year.  The increase in net income was primarily due to a $2.2 million increase in net interest income, a $1.3 million increase in noninterest income, a $351,000 decrease in income tax provisions, and a $150,000 decrease in loan loss provisions, partially offset by a $3.2 million increase in noninterest expense. Net Interest Income. Net interest income for fiscal 2010 was $16.3 million, an increase of $2.2 million, or 15.7%, when compared to the prior fiscal year. The increase was due to a $79.7 million increase in average interest-earning assets, partially offset by a five basis point decrease in the average interest rate |   | spread. The decrease in interest rate spread was primarily a result of our strong deposit growth, accomplished in part due to our rewards checking product and an above-market savings account special in our new Arkansas market, coupled with resulting higher average cash balances (which earn a lower rate of return than our average interest-earning assets) during the fiscal year. For fiscal 2010, the average interest rate spread was 3.06%, compared to 3.11% for fiscal year 2009. At June 30, 2010, the spread was 3.08%. Interest Income. Interest income for fiscal 2010 was $27.5 million, an increase of $2.2 million, or 8.9%, when compared to the prior fiscal year. The increase was due to the $79.7 million increase in the average balance of interest-earning assets, partially offset by a 51 basis point decrease in the average yield earned on interest-earning assets, from 6.04% in fiscal 2009 to 5.53% in fiscal 2010.Interest income on loans receivable for fiscal 2010 was $24.6 million, an increase of $1.7 million, or 7.6%, when compared to the prior fiscal year.       The increase was due to a $45.1 million increase in the average balance of loans receivable, partially offset by a 29 basis point decrease in the average yield earned on loans receivable, reflecting the decrease in market rates.Interest income on the investment portfolio and other interest-earning assets was $3.0 million for fiscal 2010, an increase of $516,000, or 20.9%, when compared to the prior fiscal year. The increase was due to a $34.7 million increase in the average balance of these assets, partially offset by a 92 basis point decrease in the average yield earned on these assets.  The decreased yield was due primarily to higher average cash balances. Interest Expense. Interest expense was $11.2 million for fiscal 2010, an increase of $21,000, or 0.2%, when compared to the prior fiscal year.  The increase was due to the $73.5 million increase in the average balance of interest-bearing liabilities, partially offset by a 46 basis point decrease in the average rate paid on interest-bearing liabilities, from 2.93% in fiscal 2009 to 2.47% in fiscal 2010.Interest expense on deposits was $8.1 million for fiscal 2010, an increase of $911,000, or 12.7%, when compared to the prior fiscal year. The increase was due to a $90.7 million increase in the average balance of interest-bearing deposits, partially offset by a 41 basis point decrease in the average rate paid on deposits outstanding, reflecting the decrease in market rates, despiteabove-market rates paid in new markets.Interest expense on FHLB advances was $2.7 million for fiscal 2010, a decrease of $764,000, or 22.1%, when compared to the prior fiscal year.  The decrease was due to a $20.5 million decrease in the average balance of FHLB advances, partially offset by a 25 basis point increase in the average rate paid on advances, reflecting the repayment of short-term borrowings while long-term advances remained outstanding.In March 2009, $7.0 million of Floating Rate Capital Securities were issued, with an interest rate of three month LIBOR plus 275 basis points, repricing quarterly. Interest expense on these securities was $227,000 for fiscal 2010, as compared to $357,000 for the prior fiscal year, as the average rate paid decreased by 180 basis points, due to the decrease in the index. Provision for Loan Losses. A provision for loan losses is charged to earnings to bring the total allowance for loan losses to a level considered adequate by management to provide for probable loan losses based on prior loss experience, type and amount of loans in the portfolio, adverse situations that  |
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| may affect the borrower’s ability to repay, the estimated value of any underlying collateral, and current economic conditions. Management also considers other factors relating to the collectability of the loan portfolio.The provision for loan losses was $925,000 for fiscal 2010, compared to $1.2 million for the prior fiscal year. The decrease in provision was primarily due to less uncertainty in the regional economy and real estate market as compared to the prior fiscal year, while charge-offs and non-performing loans remained stable in the current fiscal year.  Additionally, loans acquired through the July 2009 acquisition performed slightly better than anticipated, and have not required significant further provisioning. In fiscal 2010, net charge offs were $409,000, compared to $357,000 for the prior year. At June 30, 2010, classified assets totaled $8.0 million, or 1.4% of total assets, as compared to $9.7 million, or 2.1% of total assets, at June 30, 2009.  Classified assets were generally comprised of loans secured by commercial and agricultural real estate, or inventory and equipment, as well as the Company’s investments in trust preferred securities, which totaled $1.5 million in book value.  Three of these investments in pooled trust preferred securities with a total book value of $1.0 million (included in the total of $1.5 million, above) have deferred interest payments as of June 30, 2010; all other classified assets were performing in accordance with terms. All assets were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to servicethe debt.The above provision was made based on management’s analysis of the various factors which affect the loan portfolio and management’s desire to maintain the allowance at a level considered adequate. Management performed a detailed analysis of the loan portfolio, including types of loans, the charge-off history, and an analysis of the allowance for loan losses. Management also considered the continued origination of loans secured by commercial businesses and commercial real estate, which bear an inherently higher level    of credit risk. While management believes the allowance for loan losses at    June 30, 2010, is adequate to cover all losses inherent in the portfolio, there can be no assurance that, in the future, increases in the allowance will not be necessary, or that actual losses will not exceed the allowance. Noninterest Income. Noninterest income was $3.1 million for fiscal 2010, an increase of $1.3 million, or 70.0%, when compared to the prior fiscal year.  The increase was due to increased NSF fee collection, additional ATM and debit card transaction fee income, and increased gains on sales of secondary market loans, as well as charges of $679,000 incurred during fiscal 2009 to recognize the other-than-temporary impairment (OTTI) of two investments held by the Company (see Note 2 – Securities), with no corresponding charges in the current period.  Exclusive of those fiscal 2009 OTTI charges, noninterest income would have increased 23.8% in fiscal 2010. The company expects noninterest income in fiscal 2011 to be lower or to show no increase from fiscal 2010, due primarily to new regulatory requirements related to NSF charges.       Noninterest Expense. Noninterest expense was $12.5 million for fiscal 2010, an increase of $3.3 million, or 35.6%, when compared to the prior fiscal year.  The increase resulted primarily from higher compensation, occupancy, and electronic banking expenses, a prepayment penalty for the FHLB advance prepaid in March 2010, a charge to dispose of fixed assets, and charges to write down the carrying value of foreclosed real estate held for sale.  Compensation expenses were $6.3 million for fiscal 2010, an increase of $1.5 million, or 31.1%, when compared to the prior fiscal year.  The increase was due to the July 2009 |   | acquisition, the addition of key personnel, increased salaries, personnel, and increased benefit expenses.  Occupancy expenses were $1.9 million for fiscal 2010, an increase of $341,000, or 22.3%, as we added four new locations with the July 2009 acquisition.  Electronic banking and other charges increased due to the development and promotion of our popular new rewards checking product, as well as the additional costs of servicing those accounts.   Provision for Income Taxes. The Company expensed an income tax provision of $1.4 million for fiscal 2010, a decrease of $351,000, or 20.5%, compared to $1.7 million expensed for fiscal 2009. The decrease was primarily due to tax benefits associated with the July 2009 acquisition, as well as continuing investments in tax-exempt securities and tax credits, partially offset by increased pre-tax income. COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2009 AND 2008Net Income. The Company’s net income available to common stockholders for the fiscal year ended June 30, 2009, was $3.5 million, a decrease of $67,000, or 1.9%, from the $3.6 million net income available to common stockholders for the prior fiscal year.  Before an effective dividend on preferred shares of $289,000, net income was $3.8 million for the 2009 fiscal year, an increase of $222,000, or 6.1%, compared to the $3.6 million in net income for the prior fiscal year.  The increase in net income was primarily due to a $2.3 million increase in net interest income, partially offset by a $1.3 million increase in non-interest expense, a $592,000 decrease in non-interest income, and a $280,000 increase in loan loss provisions. Net Interest Income. Net interest income increased $2.3 million, or 19.7%, to $14.1 million for fiscal 2009, when compared to the prior fiscal year. The increase was primarily due to a $47.0 million increase in average interest-earning assets, combined with a 25 basis point increase in the average interest rate spread. The increase in interest rate spread was primarily a result of decreasing short-term interest rates, prompted by actions of the Federal Reserve’s Federal Open Market Committee, as well as a steepened yield curve for most of the fiscal year. For fiscal 2009, the average interest rate spread was 3.11%, compared to 2.86% for fiscal year 2008. At June 30, 2009, the spread was 3.11%. Interest Income. Interest income decreased $26,000 or 0.1%, to $25.3 million for fiscal 2009, when compared to the prior fiscal year. The decrease was primarily due to the 78 basis point decrease in the average yield earned            on interest-earning assets, from 6.82% in fiscal 2008 to 6.04% in fiscal 2009, mostly offset by the $47.0 million increase in the average balance of interest-earning assets. Interest income on loans receivable decreased by $455,000, or 2.0%, to $22.8 million for fiscal 2009 when compared to the prior fiscal year. The decrease was due to a 77 basis point decrease in the average yield earned on loans receivable, partially offset by a $32.2 million increase in the average balance of loans receivable.Interest income on the investment portfolio and other interest-earning assets increased $430,000 or 21.1%, to $2.5 million for fiscal 2009 when compared to the prior fiscal year. The increase was due to a $14.8 million increase in the average balance of these assets, partially offset by a 36 basis point decrease in the average yield earned on these assets. |
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| Interest Expense. Interest expense decreased $2.3 million, or 17.3%, to $11.2 million for fiscal 2009 when compared to the prior fiscal year. The decrease was due to the 103 basis point decrease in the average rate paid on interest-bearing liabilities, from 3.96% in fiscal 2008 to 2.93% in fiscal 2009, reflecting the decrease in market rates, partially offset by a $39.2 million increase in the average balance of interest-bearing liabilities.Interest expense on deposits decreased $2.1 million, or 22.6%, to $7.2 million for fiscal 2009 when compared to the prior fiscal year. The decrease was due to a 98 basis point decrease in the average rate paid on deposits, partially offset by a $16.0 million increase in average deposits outstanding.Interest expense on FHLB advances increased $378,000, or 12.3%, to $3.5 million for fiscal 2009 when compared to the prior fiscal year. The increase was due to the $19.4 million increase in the average balance of FHLB advances for fiscal 2009, partially offset by the 82 basis point decrease in the average rate paid on advances, reflecting the decrease in market rates.In March 2009, $7.0 million of Floating Rate Capital Securities were issued, with an interest rate of three month LIBOR plus 275 basis points, repricing quarterly. Interest expense on these securities was $357,000 for fiscal 2009 as compared to $539,000 for the prior fiscal year. This decrease was due to the average rate paid decreasing by 252 basis points. Provision for Loan Losses. A provision for loan losses is charged to earnings to bring the total allowance for loan losses to a level considered adequate by management to provide for probable loan losses based on prior loss experience, type and amount of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, and current economic conditions. Management also considers other factors relating to the collectability of the loan portfolio.The provision for loan losses was $1.2 million for fiscal 2009, compared to $723,000 for the prior fiscal year. The increase in provision was primarily due to loan growth, the deteriorating health of the national and regional economy, the potential for declining real estate collateral values, and increased non-performing asset levels experienced by the Company. In fiscal 2009, net charge offs were $357,000, compared to net recoveries of $90,000 for the prior year. At June 30, 2009, classified assets totaled $9.7 million, or 2.1% of total assets, compared to classified assets of $4.5 million, or 1.1% of total assets, at June 30, 2008.  The increase is primarily due to the classification of two loans totaling $3.5 million outstanding to a bank holding company, as well as the classification of the Company’s investments in pooled trust preferred securities with a book value of $1.5 million (see Note 2 – Securities). Other classified assets were generally comprised of loans secured by commercial and agricultural real estate, or inventory and equipment.  Two investments in pooled trust preferred securities with a total book value of $559,000 (included in the total of $1.5 million, above) have deferred interest payments as of June 30, 2009; all other classified assets were performing in accordance with terms.  All assets were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to service the debt.      The above provision was made based on management’s analysis of the various factors which affect the loan portfolio and management’s desire to maintain the allowance at a level considered adequate. Management performed a detailed analysis of the loan portfolio, including types of loans, the charge-off history, and an analysis of the allowance for loan losses. Management also considered the continued origination of loans secured by commercial |   | businesses and commercial real estate, which bear an inherently higher level of credit risk. While management believes the allowance for loan losses at June 30, 2009, is adequate to cover all losses inherent in the portfolio, there can be no assurance that, in the future, increases in the allowance will not be necessary, or that actual losses will not exceed the allowance. Noninterest Income. Noninterest income decreased $592,000, or 24.6%, to $1.8 million for fiscal 2009, when compared to the prior fiscal year.  The decrease was primarily due to charges of $679,000 incurred to recognize the other-than-temporary impairment of two investments held by the Company (see Note 2 – Securities).  Exclusive of those charges, noninterest income would have increased 3.6% in fiscal 2009, attributable to increased debit and ATM card income, secondary market income, loan fees and late charges, partially offset by decreases in NSF and account service charges, miscellaneous customer fees, and smaller increases in the cash surrender value of BOLI. Noninterest Expense. Noninterest expense increased $1.1 million, or 14.1%, to $9.2 million for fiscal 2009, when compared to the prior fiscal year.  The increase resulted primarily from higher deposit insurance assessments, compensation expenses, legal and professional fees, and electronic banking and other charges.  These increases were partially offset by lower charges for correspondent banking services and insurance.  Deposit insurance assessments were $536,000 for fiscal 2009, an increase of $506,000 when compared to the prior year, the result of base assessment rate increases and special assessments collected by the FDIC to rebuild depleted insurance fund balances.  Compensation expenses were $4.8 million, an increase of $371,000, or 8.4%, when compared to the prior fiscal year.  The increase was due to increased salaries, the addition of key personnel, and increased health care benefit costs.  Legal expenses increased due primarily to work required for the acquisition of the Southern Bank of Commerce.  Electronic banking and other charges increased due to the development and promotion of our popular new rewards checking product, as well as the additional costs of servicing those accounts.   Provision for Income Taxes. The Company expensed an income tax provision of $1.7 million for fiscal 2009, a decrease of $63,000, or 3.6%, compared to $1.8 million in fiscal 2008. The decrease was primarily due to larger investments in tax-exempt securities and tax credits, partially offset by increased pre-tax income.  |
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| QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe goal of the Company’s asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning assets and interest-bearing liabilities in order to maximize net interest income without exposing the Company to an excessive level of interest rate risk. The Company employs various strategies intended to manage the potential effect that changing interest rates may have on future operating results. The primary asset/liability management strategy has been to focus on matching the anticipated repricing intervals of interest-earning assets and interest-bearing liabilities. At times, however, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the Company may increase its interest rate risk position in order to maintain its net interest margin.In an effort to manage the interest rate risk resulting from fixed rate lending, the Company has utilized longer term (up to 10 year maturities), fixed-rate FHLB advances, which may be subject to early redemption, to offset interest rate risk. Other elements of the Company’s current asset/liability strategy include: (i) increasing originations of commercial real estate, commercial business loans, agricultural real estate, and agricultural operating lines, which typically provide higher yields and shorter repricing periods, but inherently increase credit risk, (ii) limiting the price volatility of the investment portfolio by maintaining a weighted average maturity of five years or less, (iii) actively soliciting less rate-sensitive deposits, and (iv) offering competitively priced money market accounts and CDs with maturities of up to five years. The degree to which each segment of the strategy is achieved will affect profitability and exposure to interest rate risk.The Company continues to generate long-term, fixed-rate residential loans. During the year ended June 30, 2010, fixed rate residential loan originations totaled $17.0 million, compared to $23.1 million during the prior year. At June 30, 2010, the fixed-rate residential loan portfolio totaled $103.3 million, with a weighted average maturity of 192 months, compared to $96.6 million with a weighted average maturity of 206 months at June 30, 2009. The Company originated $11.9 million in adjustable rate residential loans during the year ended June 30, 2010, compared to $14.3 million during the prior year. At June 30, 2010, fixed rate loans with remaining maturities in excess of 10 years totaled $99.5 million, or 23.5%, of loans receivable, compared to $90.4 million, or 24.2%, of loans receivable, at June 30, 2009. The Company originated $53.2 million in fixed rate commercial and commercial real estate loans during the year ended June 30, 2010, compared to $57.7 million during the prior fiscal year. The Company also originated $68.4 million in adjustable rate commercial and commercial real estate loans during the year ended June 30, 2010, compared to $74.0 million during the prior year. At June 30, 2010, adjustable-rate home equity lines of credit had increased to $12.9 million as compared to $11.0 million as of June 30, 2009.       At June 30, 2010, the Company’s weighted average life of its investment portfolio was 2.9 years, as compared to 3.9 years at June 30, 2009.  At June 30, 2010, CDs with original terms of two years or more totaled $66.8 million compared to $45.7 million at June 30, 2009. INTEREST RATE SENSITIVITY ANALYSISThe following table sets forth as of June 30, 2010, and 2009, management’s estimates of the projected changes in net portfolio value in the event of 1%, 2% and 3%, instantaneous, permanent increases or decreases in market interest rates.Computations in the table below are based on prospective effects of hypothetical changes in interest rates and are based on an internally generated model using the actual maturity and repricing schedules for Southern Bank’s |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | loans and deposits, adjusted by management’s assumptions for prepayment rates and deposit runoff. Further, the computations do not consider any reactions that the Bank may undertake in response to changes in interest rates. These projected changes should not be relied upon as indicative of actual results in any of the aforementioned interest rate changes.Management cannot accurately predict future interest rates or their effect on the Company’s NPV and net interest income in the future. Certain shortcomings are inherent in the method of analysis presented in the computation of NPV and net interest income. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types of assets and liabilities may lag behind changes in market interest rates. Additionally, most of Southern Bank’s loans have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the foregoing table. Finally, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase.  |
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | June 30, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Net Portfolio                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | NPV as % ofPV of Assets |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $ Amount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $ Change | % Change | NPV Ratio | Change |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Change in Rates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $   7,513 | 14 | 10.93 | 1.63 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 6,318 | 12 | 10.60 | 1.30 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 4,144 | 8 | 10.11 | 0.81 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | - | - | 9.30 |   - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (5,287) | (10) | 8.30 | -1.00 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (10,877) | (21) | 7.26 | -2.04 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (12,589) | (24) | 6.92 | -2.38 |
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | June 30, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Net Portfolio                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | NPV as % ofPV of Assets |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $ Amount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $ Change | % Change | NPV Ratio | Change |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Change in Rates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | +300 bp                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $  42,388                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $  (5,131) | (11) | 9.51 | -0.61 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (2,656) | (6) | 9.90 | -0.22 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (521) | (1) | 10.19 | 0.07 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | - | - | 10.12 | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (2,638) | (6) | 9.45 | -0.67 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (5,122) | (11) | 8.88 | -1.24 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (5,577) | (12) | 8.78 | -1.41 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | The Company has worked to limit its exposure to rising rates in the current historically low rate environment by (a) increasing the share of funding on its balance sheet obtained from non-maturity transaction accounts, (b) reducing FHLB borrowings - of which, the reduced balances were generally short in duration, (c) holding cash at June 30, 2010, as compared to an overnight borrowing position at June 30, 2009, and (d) limiting the duration of its available-for-sale investment portfolio.  |

| LIQUIDITY AND CAPITAL RESOURCESSouthern Missouri’s primary potential sources of funds include deposit growth, securities sold under agreements to repurchase, FHLB advances, amortization and prepayment of loan principal, investment maturities and sales, and ongoing operating results. While scheduled repayments on loans and securities as well as the maturity of short-term investments are a relatively predictable source of funding, deposit flows, FHLB advance redemptions and loan and security prepayment rates are significantly influenced by factors outside of the Bank’s control, including general economic conditions and market competition. The Bank has relied on FHLB advances as a source for funding cash or liquidity needs.Southern Missouri uses its liquid assets as well as other funding sources to meet ongoing commitments, to fund loan commitments, to repay maturing certificates of deposit and FHLB advances, to make investments, to fund other deposit withdrawals and to meet operating expenses. At June 30, 2010, the Bank had outstanding commitments to extend credit of $68.6 million (including $54.2 million in unused lines of credit). Total commitments to originate fixed-rate loans with terms in excess of one year were $3.9 million at rates ranging from 3.75% to 10.00%, with a weighted-average of 5.92%. Management anticipates that current funding sources will be adequate to meet foreseeable liquidity needs.For the year ended June 30, 2010, Southern Missouri increased deposits and securities sold under agreements to repurchase by $110.9 million and $6.6 million, respectively, and decreased FHLB advances by $35.3 million. During the prior year, Southern Missouri increased deposits, securities sold under agreements to repurchase, and FHLB advances by $19.7 million, $1.9 million, and $14.7 million, respectively. At June 30, 2010, the Bank had pledged $204.3 million of its residential and commercial real estate loan portfolios to the FHLB for available credit of approximately $149.8 million, of which $43.5 million had been advanced, and another $3 million had been used for the issuance of a letter of credit to secure a public unit deposit.  The Bank also pledged $45.8 of its agricultural real estate and agricultural operating and equipment loans to the Federal Reserve’s discount window for available credit of approximately $30.7, none of which had been advanced.  In addition, the Bank has the ability to pledge several of its other loan portfolios, including, for example, its home equity and commercial business loans, which could provide collateral for an additional $19.9 million in borrowings at June 30, 2010.  In total, FHLB borrowings are generally limited to 40% of Bank assets, or approximately $220 million, which means that an amount up to $173.5 million may still be eligible to be borrowed from the FHLB, subject to available collateral. Along with the ability to borrow from the FHLB and Federal Reserve, management believes its liquid resources will be sufficient to meet the Company’s liquidity needs. Liquidity management is an ongoing responsibility of the Bank’s management. The Bank adjusts its investment in liquid assets based upon a variety of factors including (i) expected loan demand and deposit flows, (ii) anticipated investment and FHLB advance maturities, (iii) the impact on profitability, and (iv) asset/liability management objectives.At June 30, 2010, the Bank had $147.9 million in CDs maturing within one year and $260.7 million in other deposits and securities sold under agreements to repurchase without a specified maturity, as compared to the prior year of $112.8 million in CDs maturing within one year and $175.4 million in other deposits and securities sold under agreements to repurchase without a specified maturity. Management believes that most maturing interest-bearing liabilities will be retained or replaced by new interest-bearing liabilities. Also at June 30, |   | 2010, the Bank had $18.0 million in FHLB advances eligible for early redemption by the lender within one year. REGULATORY CAPITALFederally insured financial institutions are required to maintain minimum levels of regulatory capital. FDIC regulations establish capital requirements, including a leverage (or core capital) requirement and a risk-based capital requirement. The FDIC is also authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis.At June 30, 2010, the Bank exceeded regulatory capital requirements with core and total risk-based capital of $45.4 million and $50.5 million, or 8.36% and 12.50% of adjusted total assets and risk-weighted assets, respectively. These capital levels exceeded minimum requirements of 4.0% and 8.0%, respectively, and well-capitalized requirements of 5% and 10%, respectively for adjusted total assets and risk-weighted assets. (See Note 12 - Stockholders’ Equity and Regulatory Capital.) IMPACT OF INFLATIONThe consolidated financial statements and related data presented herein have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates generally have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. In the current interest rate environment, liquidity and maturity structure of the Company’s assets and liabilities are critical to the maintenance of acceptable performance levels. AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATESThe table on the following page sets forth certain information relating to the Company’s average interest-earning assets and interest-bearing liabilities and reflects the average yield on assets and the average cost of liabilities for the periods indicated. These yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the years indicated. Nonaccrual loans are included in the net loan category.The table also presents information with respect to the difference between the weighted-average yield earned on interest-earning assets and the weighted-average rate paid on interest-bearing liabilities, or interest rate spread, which financial institutions have traditionally used as an indicator of profitability. Another indicator of an institution’s net interest income is its net yield on interest-earning assets, which is its net interest income divided by the average balance of interest-earning assets. Net interest income is affected by the interest rate spread and by the relative amounts of interest-earning assets and interest-bearing liabilities. When interest-earning assets approximate or exceed     interest-bearing liabilities, any positive interest rate spread will generate net interest income.  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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|                                                                             |   |           |    |   | 2010                 |   |   |       |   |   |            |   |   | 2009                 |    |   |       |   |   |            |   |   | 2008                 |   |   |       |    |
|----------------------------------------------------------------------------------|--------|----------------|---------|--------|----------------------|--------|--------|------------|--------|--------|-----------------|--------|--------|----------------------|---------|--------|------------|--------|--------|-----------------|--------|--------|----------------------|--------|--------|------------|---------|
| Year Ended June 30                                                               |   | AverageBalance |    |   | InterestandDividends |   |   | Yield/Cost |   |   | Average Balance |   |   | InterestandDividends |    |   | Yield/Cost |   |   | Average Balance |   |   | InterestandDividends |   |   | Yield/Cost |    |
| Interest-earning assets:                                                         |   |           |    |   |                 |   |   |       |   |   |            |   |   |                 |    |   |       |   |   |            |   |   |                 |   |   |       |    |
| Mortgage loans (1)                                                               |   | $              | 287,216 |   |                 | $      | 17,917 |       |   |   | 6.24            | %      |   | $                    | 254,355 |   |       | $      | 16,781 |            |   |   | 6.60                 | %      |   | $          | 232,500 |   |   | $ | 16,541 |   |   |   | 7.11 | % |
| Other loans (1)                                                                  |   |           | 115,155 |   |                 |   | 6,638  |       |   |   | 5.76            |   |   |                 | 102,963 |   |       |   | 6,050  |            |   |   | 5.88                 |   |   |       | 92,614  |   |   |   | 6,745 |   |   |   | 7.28 |   |
| Total net loans                                                                  |   |           | 402,371 |   |                 |   | 24,555 |       |   |   | 6.10            |   |   |                 | 357,318 |   |       |   | 22,831 |            |   |   | 6.39                 |   |   |       | 325,114 |   |   |   | 23,286 |   |   |   | 7.16 |   |
| Mortgage-backed securities                                                       |   |           | 35,862  |   |                 |   | 1,715  |       |   |   | 4.78            |   |   |                 | 35,714  |   |       |   | 1,729  |            |   |   | 4.84                 |   |   |       | 19,372  |   |   |   | 923 |   |   |   | 4.76 |   |
| Investment securities (2)                                                        |   |           | 30,878  |   |                 |   | 1,156  |       |   |   | 3.74            |   |   |                 | 20,487  |   |       |   | 706    |            |   |   | 3.45                 |   |   |       | 22,552  |   |   |   | 1,059 |   |   |   | 4.69 |   |
| Other interest-earning assets                                                    |   |           | 29,282  |   |                 |   | 115    |       |   |   | 0.39            |   |   |                 | 5,133   |   |       |   | 35     |            |   |   | 0.68                 |   |   |       | 4,567   |   |   |   | 59 |   |   |   | 1.29 |   |
| TOTAL INTEREST-                                                                  |   |           |    |   |                 |   |   |       |   |   |            |   |   |                 |    |   |       |   |   |            |   |   |                 |   |   |       |    |   |   |   |   |   |   |   |   |   |
| EARNING ASSETS (1)                                                               |   |           | 498,393 |   |                 |   | 27,541 |       |   |   | 5.53            |   |   |                 | 418,652 |   |       |   | 25,301 |            |   |   | 6.04                 |   |   |       | 371,605 |   |   |   | 25,327 |   |   |   | 6.82 |   |
| Other noninterest-earning assets (3)                                             |   |           | 27,741  |   |                 |   | -      |       |   |   | -               |   |   |                 | 23,045  |   |       |   | -      |            |   |   | -                    |   |   |       | 22,429  |   |   |   | - |   |   |   | - |   |
| TOTAL ASSETS                                                                     |   | $              | 526,134 |   |                 | $      | 27,541 |       |   |   | -               |   |   | $                    | 441,697 |   |       | $      | 25,301 |            |   |   | -                    |   |   | $          | 394,034 |   |   | $ | 25,327 |   |   |   | - |   |
| Interest-bearing liabilities:                                                    |   |           |    |   |                 |   |   |       |   |   |            |   |   |                 |    |   |       |   |   |            |   |   |                 |   |   |       |    |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                                 |   | $              | 79,512  |   |                 | $      | 1,186  |       |   |   | 1.49            | %      |   | $                    | 64,349  |   |       | $      | 1,155  |            |   |   | 1.80                 | %      |   | $          | 76,126  |   |   | $ | 2,426 |   |   |   | 3.19 | % |
| NOW accounts                                                                     |   |           | 85,911  |   |                 |   | 2,076  |       |   |   | 2.42            |   |   |                 | 49,325  |   |       |   | 1,015  |            |   |   | 2.06                 |   |   |       | 32,461  |   |   |   | 427 |   |   |   | 1.31 |   |
| Money market accounts                                                            |   |           | 6,951   |   |                 |   | 99     |       |   |   | 1.42            |   |   |                 | 6,905   |   |       |   | 99     |            |   |   | 1.43                 |   |   |       | 6,319   |   |   |   | 112 |   |   |   | 1.77 |   |
| Certificates of deposit                                                          |   |           | 190,190 |   |                 |   | 4,715  |       |   |   | 2.48            |   |   |                 | 151,316 |   |       |   | 4,896  |            |   |   | 3.24                 |   |   |       | 140,955 |   |   |   | 6,287 |   |   |   | 4.46 |   |
| TOTAL INTEREST-                                                                  |   |           |    |   |                 |   |   |       |   |   |            |   |   |                 |    |   |       |   |   |            |   |   |                 |   |   |       |    |   |   |   |   |   |   |   |   |   |
| BEARING DEPOSITS                                                                 |   |           | 362,564 |   |                 |   | 8,076  |       |   |   | 2.23            |   |   |                 | 271,895 |   |       |   | 7,165  |            |   |   | 2.64                 |   |   |       | 255,861 |   |   |   | 9,252 |   |   |   | 3.62 |   |
| Borrowings:                                                                      |   |           |    |   |                 |   |   |       |   |   |            |   |   |                 |    |   |       |   |   |            |   |   |                 |   |   |       |    |   |   |   |   |   |   |   |   |   |
| Securities sold under agreements to repurchase                                   |   |           | 27,674  |   |                 |   | 233    |       |   |   | 0.84            |   |   |                 | 24,345  |   |       |   | 229    |            |   |   | 0.94                 |   |   |       | 20,567  |   |   |   | 682 |   |   |   | 3.31 |   |
| FHLB advances                                                                    |   |           | 57,399  |   |                 |   | 2,689  |       |   |   | 4.68            |   |   |                 | 77,923  |   |       |   | 3,453  |            |   |   | 4.43                 |   |   |       | 58,526  |   |   |   | 3,074 |   |   |   | 5.25 |   |
| Junior subordinated debt                                                         |   |           | 7,217   |   |                 |   | 227    |       |   |   | 3.15            |   |   |                 | 7,217   |   |       |   | 357    |            |   |   | 4.95                 |   |   |       | 7,217   |   |   |   | 539 |   |   |   | 7.47 |   |
| TOTAL INTEREST-                                                                  |   |           |    |   |                 |   |   |       |   |   |            |   |   |                 |    |   |       |   |   |            |   |   |                 |   |   |       |    |   |   |   |   |   |   |   |   |   |
| BEARING LIABILITIES                                                              |   |           | 454,854 |   |                 |   | 11,225 |       |   |   | 2.47            |   |   |                 | 381,380 |   |       |   | 11,204 |            |   |   | 2.93                 |   |   |       | 342,171 |   |   |   | 13,547 |   |   |   | 3.96 |   |
| Noninterest-bearingdemand deposits                                               |   |           | 25,701  |   |                 |   | -      |       |   |   | -               |   |   |                 | 23,140  |   |       |   | -      |            |   |   | -                    |   |   |       | 20,055  |   |   |   | - |   |   |   | - |   |
| Other liabilities                                                                |   |           | 1,438   |   |                 |   | -      |       |   |   | -               |   |   |                 | 546     |   |       |   | -      |            |   |   | -                    |   |   |       | 1,848   |   |   |   | - |   |   |   | - |   |
| TOTAL LIABILITIES                                                                |   |           | 481,993 |   |                 |   | 11,225 |       |   |   | -               |   |   |                 | 405,066 |   |       |   | 11,204 |            |   |   | -                    |   |   |       | 364,074 |   |   |   | 13,547 |   |   |   | - |   |
| Stockholders’ equity                                                       |   |           | 44,141  |   |                 |   | -      |       |   |   | -               |   |   |                 | 36,631  |   |       |   | -      |            |   |   | -                    |   |   |       | 29,960  |   |   |   | - |   |   |   | - |   |
| TOTAL LIABILITIES AND                                                            |   |           |    |   |                 |   |   |       |   |   |            |   |   |                 |    |   |       |   |   |            |   |   |                 |   |   |       |    |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                       |   | $              | 526,134 |   |                 | $      | 11,225 |       |   |   | -               |   |   | $                    | 441,697 |   |       | $      | 11,204 |            |   |   | -                    |   |   | $          | 394,034 |   |   | $ | 13,547 |   |   |   | - |   |
| Net interest income                                                              |   |           |    |   |                 | $      | 16,316 |       |   |   |            |   |   |                 |    |   |       | $      | 14,097 |            |   |   |                 |   |   |       |    |   |   | $ | 11,780 |   |   |   |   |   |
| Interest rate spread (4)                                                         |   |           |    |   |                 |   |   |       |   |   | 3.06            | %      |   |                 |    |   |       |   |   |            |   |   | 3.11                 | %      |   |       |    |   |   |   |   |   |   |   | 2.86 | % |
| Net interest margin (5)                                                          |   |           |    |   |                 |   |   |       |   |   | 3.27            | %      |   |                 |    |   |       |   |   |            |   |   | 3.37                 | %      |   |       |    |   |   |   |   |   |   |   | 3.17 | % |
| Ratio of average interest-earning assets to average interest-bearing liabilities |   |           | 109.57  | %      |                 |   |   |       |   |   |            |   |   |                 | 109.77  | %      |       |   |   |            |   |   |                 |   |   |       | 108.60  | % |   |   |   |   |   |   |   |   |

| (1) | Calculated net of deferred loan fees, loan discounts and loans-in-process. Nonaccrual loans are included in average loans.          |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Includes FHLB stock and related cash dividends.                                                                                     |
| (3) | Includes equity securities and related cash dividends.                                                                              |
| (4) | Represents the difference between the average rate on interest-earning assets and the average cost of interest-bearing liabilities. |
| (5) | Represents net interest income divided by average interest-earning assets.                                                          |

|                                                                                                                            | AtJune 30,2010     | ForThe Year Ended June 30, |
|---------------------------------------------------------------------------------------------------------------------------------|--------------------|----------------------------|
| 2010                                                                                                                            | 2009               | 2008                       |
| Weighted-average yield on loan portfolio                                                                                        |    5.98% |    6.10%         |    6.39% | 7.16% |
| Weighted-average yield on mortgage-backed securities                                                                            | 4.85               | 4.78                       | 4.84 | 4.76 |
| Weighted-average yield on investment securities (1)                                                                             | 3.43               | 3.74                       | 3.45 | 4.69 |
| Weighted-average yield on other interest-earning assets                                                                         | 0.37               | 0.39                       | 0.68 | 1.29 |
| Weighted-average yield on all interest-earning assets                                                                           | 5.44               | 5.53                       | 6.04 | 6.82 |
| Weighted-average rate paid on deposits                                                                                          | 2.23               | 2.23                       | 2.64 | 3.62 |
| Weighted-average rate paid on securities sold under agreements to repurchase                                                    | 0.85               | 0.84                       | 0.94 | 3.31 |
| Weighted-average rate paid on FHLB advances                                                                                     | 4.48               | 4.68                       | 4.43 | 5.25 |
| Weighted-average rate paid on subordinated debt                                                                                 | 3.29               | 3.15                       | 4.95 | 7.47 |
| Weighted-average rate paid on all interest-bearing liabilities                                                                  | 2.36               | 2.47                       | 2.93 | 3.96 |
| Interest rate spread (spread between weighted average rate on all interest-earning assets and all interest-bearing liabilities) | 3.08               | 3.06                       | 3.11 | 2.86 |
| Net interest margin (net interest income as a percentage of average interest-earning assets)                                    | 3.27               | 3.27                       | 3.37 | 3.17 |
| (1) Includes Federal Home Loan Bank stock.                                                                                      |               |                       |   |   |

|                                                                    |   | Years Ended June 30,2010 Compared to 2009Increase (Decrease) Due to |   |   | Years Ended June 30,2009 Compared to 2008Increase (Decrease) Due to |   |
|-------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------|--------|
|                                                                    |   |                                                                |   |   |                                                                |   |   | Rate/ |   |   |   |   |   |   |   |   |   |   |   | Rate/ |   |   |   |   |
| (dollars in thousands)                                                  |   | Rate                                                                |   |   | Volume                                                              |   |   | Volume |   |   | Net |   |   | Rate |   |   | Volume |   |   | Volume |   |   | Net |   |
| Interest-earning assets                                                 |   |                                                                |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable (1)                                                    |   | $                                                                   | (1,036 | )      |                                                                | $      | 2,879 |   |   | $ | (119 | ) |   | $ | 1,724 |   |   | $ | (2,503 | ) |   | $ | 2,306 |   |   | $ | (258 | ) |   | $ | (455 | ) |
| Mortgage-backed securities                                              |   |                                                                | (21    | )      |                                                                |   | 7 |   |   |   | - |   |   |   | (14 | ) |   |   | 15 |   |   |   | 778 |   |   |   | 13 |   |   |   | 806 |   |
| Investment securities (2)                                               |   |                                                                | 59     |   |                                                                |   | 358 |   |   |   | 33 |   |   |   | 450 |   |   |   | (280 | ) |   |   | (97 | ) |   |   | 24 |   |   |   | (353 | ) |
| Other interest-earning deposits                                         |   |                                                                | (15    | )      |                                                                |   | 164 |   |   |   | (69 | ) |   |   | 80 |   |   |   | (28 | ) |   |   | 7 |   |   |   | (3 | ) |   |   | (24 | ) |
| Total net change in income on interest-earning assets                   |   |                                                                | (1,013 | )      |                                                                |   | 3,408 |   |   |   | (155 | ) |   |   | 2,240 |   |   |   | (2,796 | ) |   |   | 2,994 |   |   |   | (224 | ) |   |   | (26 | ) |
| Interest-bearing liabilities:                                           |   |                                                                |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                |   |                                                                | (1,172 | )      |                                                                |   | 2,288 |   |   |   | (205 | ) |   |   | 911 |   |   |   | (2,556 | ) |   |   | 317 |   |   |   | 152 |   |   |   | (2,087 | ) |
| Securities sold under agreements to repurchase                          |   |                                                                | (24    | )      |                                                                |   | 31 |   |   |   | (3 | ) |   |   | 4 |   |   |   | (487 | ) |   |   | 125 |   |   |   | (91 | ) |   |   | (453 | ) |
| Subordinated debt                                                       |   |                                                                | (130   | )      |                                                                |   | - |   |   |   | - |   |   |   | (130 | ) |   |   | (182 | ) |   |   | - |   |   |   | - |   |   |   | (182 | ) |
| FHLB advances                                                           |   |                                                                | 195    |   |                                                                |   | (909 | ) |   |   | (50 | ) |   |   | (764 | ) |   |   | (480 | ) |   |   | 1,018 |   |   |   | (159 | ) |   |   | 379 |   |
| Total net change in expense on   interest-bearing liabilities |   |                                                                | (1,131 | )      |                                                                |   | 1,410 |   |   |   | (258 | ) |   |   | 21 |   |   |   | (3,705 | ) |   |   | 1,460 |   |   |   | (98 | ) |   |   | (2,343 | ) |
| Net change in net interest income                                       |   | $                                                                   | 118    |   |                                                                | $      | 1,998 |   |   | $ | 103 |   |   | $ | 2,219 |   |   | $ | 909 |   |   | $ | 1,534 |   |   | $ | (126 | ) |   | $ | 2,317 |   |

| (1) | Does not include interest on loans placed on nonaccrual status. |
|-----|-----------------------------------------------------------------|
| (2) | Does not include dividends earned on equity securities.         |

| Assets                                                                                                            |   | 2010   |        |   | 2009   |   |
|-------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Cash and cash equivalents                                                                                         |   | $      | 33,383,278  |   |   | $      | 8,074,465 |   |
| Interest-bearing time deposits                                                                                    |   |   | 1,089,000   |   |   |   | - |   |
| Available for sale securities (Note 2)                                                                            |   |   | 66,965,413  |   |   |   | 60,177,992 |   |
| Stock in FHLB of Des Moines                                                                                       |   |   | 2,621,600   |   |   |   | 4,592,300 |   |
| Stock in Federal Reserve Bank of St. Louis                                                                        |   |   | 583,100     |   |   |   | - |   |
| Loans, net of allowance for loan losses of $4,508,611 and $3,992,961 at                                           |   |   |        |   |   |   |   |   |
|     June 30, 2010 and 2009, respectively (Note 3)                                                  |   |   | 418,682,927 |   |   |   | 368,993,211 |   |
| Accrued interest receivable                                                                                       |   |   | 3,043,324   |   |   |   | 2,650,161 |   |
| Premises and equipment, net (Note 4)                                                                              |   |   | 7,650,244   |   |   |   | 8,135,092 |   |
| Bank owned life insurance - cash surrender value                                                                  |   |   | 7,836,929   |   |   |   | 7,563,855 |   |
| Intangible assets, net                                                                                            |   |   | 1,604,372   |   |   |   | 1,582,645 |   |
| Prepaid expenses and other assets                                                                                 |   |   | 8,623,520   |   |   |   | 4,564,164 |   |
| TOTAL ASSETS                                                                                                      |   | $      | 552,083,707 |   |   | $      | 466,333,885 |   |
| Liabilities and Stockholders’ Equity                                                                        |   |   |        |   |   |   |   |   |
| Deposits (Note 5)                                                                                                 |   | $      | 422,892,907 |   |   | $      | 311,955,468 |   |
| Securities sold under agreements to repurchase (Note 6)                                                           |   |   | 30,368,748  |   |   |   | 23,747,557 |   |
| Advances from FHLB of Des Moines (Note 7)                                                                         |   |   | 43,500,000  |   |   |   | 78,750,000 |   |
| Accounts payable and other liabilities                                                                            |   |   | 1,598,436   |   |   |   | 1,666,436 |   |
| Accrued interest payable                                                                                          |   |   | 857,418     |   |   |   | 989,086 |   |
| Subordinated debt (Note 8)                                                                                        |   |   | 7,217,000   |   |   |   | 7,217,000 |   |
| TOTAL LIABILITIES                                                                                                 |   |   | 506,434,509 |   |   |   | 424,325,547 |   |
| Commitments and contingencies (Note 14)                                                                           |   |   | -           |   |   |   | - |   |
| Preferred stock, $.01 par value; $1,000 liquidation value 500,000 shares authorized; 9,550 issued and outstanding |   |   | 9,421,321   |   |   |   | 9,388,815 |   |
| Common stock, $.01 par value; 4,000,000 shares authorized; 2,957,226 shares issued                                |   |   | 29,572      |   |   |   | 29,572 |   |
| Warrants to acquire common stock                                                                                  |   |   | 176,790     |   |   |   | 176,790 |   |
| Additional paid-in capital                                                                                        |   |   | 16,367,698  |   |   |   | 16,344,725 |   |
| Retained earnings                                                                                                 |   |   | 33,060,723  |   |   |   | 29,947,297 |   |
| Treasury stock of 869,250 shares in 2010 and 2009, at cost                                                        |   |   | (13,994,870 | )      |   |   | (13,994,870 | )  |
| Accumulated other comprehensive income                                                                            |   |   | 587,964     |   |   |   | 116,009 |   |
| TOTAL STOCKHOLDERS’ EQUITY                                                                                  |   |   | 45,649,198  |   |   |   | 42,008,338 |   |
| TOTAL LIABILITIES AND                                                                                             |   |   |        |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                        |   | $      | 552,083,707 |   |   | $      | 466,333,885 |   |

| Interest income:                                                                                                           |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Loans                                                                                                                      |   | $      | 24,554,917 |   |   | $      | 22,830,730 |   |   | $ | 23,285,907 |   |
| Investment securities                                                                                                      |   |   | 1,155,795  |   |   |   | 706,429    |   |   |   | 1,058,742 |   |
| Mortgage-backed securities                                                                                                 |   |   | 1,715,309  |   |   |   | 1,728,958  |   |   |   | 923,039 |   |
| Other interest-earning assets                                                                                              |   |   | 115,239    |   |   |   | 35,010     |   |   |   | 58,992 |   |
| TOTAL INTEREST INCOME                                                                                                      |   |   | 27,541,260 |   |   |   | 25,301,127 |   |   |   | 25,326,680 |   |
| Interest expense:                                                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |
| Deposits                                                                                                                   |   |   | 8,076,400  |   |   |   | 7,165,030  |   |   |   | 9,251,569 |   |
| Securities sold under agreements to repurchase                                                                             |   |   | 232,773    |   |   |   | 228,893    |   |   |   | 681,817 |   |
| Advances from FHLB of Des Moines                                                                                           |   |   | 2,688,747  |   |   |   | 3,452,840  |   |   |   | 3,074,378 |   |
| Subordinated debt                                                                                                          |   |   | 227,019    |   |   |   | 357,387    |   |   |   | 539,017 |   |
| TOTAL INTEREST EXPENSE                                                                                                     |   |   | 11,224,939 |   |   |   | 11,204,150 |   |   |   | 13,546,781 |   |
| NET INTEREST INCOME                                                                                                        |   |   | 16,316,321 |   |   |   | 14,096,977 |   |   |   | 11,779,899 |   |
| Provision for loan losses (Note 3)                                                                                         |   |   | 924,933    |   |   |   | 1,150,985  |   |   |   | 722,516 |   |
| NET INTEREST INCOME AFTER                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                                                                                                  |   |   | 15,391,388 |   |   |   | 12,945,992 |   |   |   | 11,057,383 |   |
| Noninterest income:                                                                                                        |   |   |       |   |   |   |       |   |   |   |   |   |
| Net gains on sales of available for sale securities                                                                        |   |   | -          |   |   |   | -          |   |   |   | 6,084 |   |
| AFS securities losses due to other-than-temporary    impairment                                             |   |   | -          |   |   |   | (678,973   | )      |   |   | - |   |
| Customer service charges                                                                                                   |   |   | 1,360,526  |   |   |   | 1,223,449  |   |   |   | 1,257,525 |   |
| Loan late charges                                                                                                          |   |   | 214,444    |   |   |   | 155,454    |   |   |   | 142,232 |   |
|     Increase in cash surrender value        of bank owned life insurance |   |   | 273,074    |   |   |   | 274,036    |   |   |   | 291,254 |   |
| Other                                                                                                                      |   |   | 1,246,088  |   |   |   | 845,778    |   |   |   | 715,016 |   |
| TOTAL NONINTEREST INCOME                                                                                                   |   |   | 3,094,132  |   |   |   | 1,819,744  |   |   |   | 2,412,111 |   |
| Noninterest expense:                                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Compensation and benefits                                                                                                  |   |   | 6,291,436  |   |   |   | 4,800,224  |   |   |   | 4,428,909 |   |
| Occupancy and equipment                                                                                                    |   |   | 1,869,597  |   |   |   | 1,528,850  |   |   |   | 1,525,999 |   |
| Deposit insurance premium                                                                                                  |   |   | 554,467    |   |   |   | 535,971    |   |   |   | 30,393 |   |
| Professional fees                                                                                                          |   |   | 306,069    |   |   |   | 311,461    |   |   |   | 223,136 |   |
| Advertising                                                                                                                |   |   | 252,404    |   |   |   | 217,295    |   |   |   | 176,479 |   |
| Postage and office supplies                                                                                                |   |   | 417,699    |   |   |   | 317,844    |   |   |   | 275,585 |   |
| Amortization of intangible assets                                                                                          |   |   | 289,066    |   |   |   | 255,258    |   |   |   | 255,258 |   |
| Other                                                                                                                      |   |   | 2,518,209  |   |   |   | 1,252,256  |   |   |   | 1,165,452 |   |
| TOTAL NONINTEREST EXPENSE                                                                                                  |   |   | 12,498,947 |   |   |   | 9,219,159  |   |   |   | 8,081,211 |   |
| INCOME BEFORE INCOME TAXES                                                                                                 |   |   | 5,986,573  |   |   |   | 5,546,577  |   |   |   | 5,388,283 |   |
| Income taxes (Note 10)                                                                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Current                                                                                                                    |   |   | 1,901,985  |   |   |   | 2,004,500  |   |   |   | 2,278,803 |   |
| Deferred                                                                                                                   |   |   | (541,000   | )      |   |   | (293,000   | )      |   |   | (504,000 | ) |
|                                                                                                                       |   |   | 1,360,985  |   |   |   | 1,711,500  |   |   |   | 1,774,803 |   |
| NET INCOME                                                                                                                 |   | $      | 4,625,588  |   |   | $      | 3,835,077  |   |   | $ | 3,613,480 |   |
| Less: effective dividend on preferred shares                                                                               |   |   | 510,006    |   |   |   | 288,841    |   |   |   | - |   |
| NET INCOME AVAILABLE TO                                                                                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| COMMON STOCKHOLDERS                                                                                                        |   | $      | 4,115,582  |   |   | $      | 3,546,236  |   |   | $ | 3,613,480 |   |
| Basic earnings per share available to common stockholders                                                                  |   | $      | 1.98       |   |   | $      | 1.67       |   |   | $ | 1.64 |   |
| Diluted earnings per share available to common stockholders                                                                |   | $      | 1.95       |   |   | $      | 1.67       |   |   | $ | 1.63 |   |
| Dividends paid                                                                                                             |   | $      | .48        |   |   | $      | .48        |   |   | $ | .40 |   |
|                                                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                                                               |   |   |       |   |   |   |       |   |   |   |   |   |

|                                                  |   | Preferred Stock |         |   | Common Stock |   |   | Warrants to Acquire Common Stock |   |   | Additional Paid-in Capital |   |   | Retained Earnings |       |   | Treasury Stock |   |       | Accumulated Other Comprehensive Income (Loss) |   |   | Total Stockholders’ Equity |    |
|------------------------------------------------------------|--------|-----------------|--------------|--------|--------------|--------|--------|----------------------------------|--------|--------|----------------------------|--------|--------|-------------------|------------|--------|----------------|--------|------------|-----------------------------------------------|--------|--------|----------------------------------|---------|
| Balance at June 30, 2007                                   |   | $               | -            |   |         | $      | 29,572 |                             |   | $      |  -                    |   |   | $                 | 17,389,156 |   |           | $      | 24,634.854 |                                          |   | $      | (12,990,541                      | )  |   | $ | (348,802 | ) |   | $ | 28,714,239 |   |
| Net Income                                                 |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | 3,613,480  |                                          |   |   |                             |    |   |   |   |   |   |   | 3,613,480 |   |
| Change in unrealized loss on available for sale securities |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   | (277,871 | ) |   |   | (277,871 | ) |
| Defined benefit pension plan net gain                      |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   | 31,495 |   |   |   | 31,495 |   |
| Total Comprehensive Income                                 |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 3,367,104 |   |
| Purchases of treasury stock                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   | (1,364,279                       | )       |   |   |   |   |   |   | (1,364,279 | ) |
| Dividends paid on common stock ($.40 per share)            |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | (884,115   | )                                             |   |   |                             |    |   |   |   |   |   |   | (884,115 | ) |
| SOP Expense                                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 48,481     |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 48,481 |   |
| MRP expense                                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 19,777     |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 19,777 |   |
| Tax benefit of MRP                                         |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 4,817      |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 4,817 |   |
| Exercise of stock options                                  |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | (786,392   | )      |           |   |       |                                          |   |   | 1,352,017                        |    |   |   |   |   |   |   | 565,625 |   |
| Balance at June 30, 2008                                   |   | $               | -            |   |         | $      | 29,572 |                             |   | $      | -                          |   |   | $                 | 16,675,839 |   |           | $      | 27,364.219 |                                          |   | $      | (13,0002,803                     | )       |   | $ | (595,178 | ) |   | $ | 30,471,649 |   |
| Net income                                                 |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | 3,835,077  |                                          |   |   |                             |    |   |   |   |   |   |   | 3,835,077 |   |
| Change in unrealized gain on available for sale securities |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   | 733,603 |   |   |   | 733,603 |   |
| Defined benefit pension plan net loss                      |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   | (22,416 | ) |   |   | (22,416 | ) |
| Total Comprehensive Income                                 |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 4,456,264 |   |
| Preferred stock issues                                     |   |            | 9,373,210    |   |         |   |   |                             |   |   | 176,790                    |   |   |              | (38,871    | )      |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 9,511,129 |   |
| Purchases of treasury stock                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   | (1,507,825                       | )       |   |   |   |   |   |   | (1,507,825 | ) |
| Dividends paid on common stock ($.48 per share)            |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | (1,024,172 | )                                             |   |   |                             |    |   |   |   |   |   |   | (1,024,172 | ) |
| Dividends paid on preferred stock                          |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | (212,222   | )                                             |   |   |                             |    |   |   |   |   |   |   | (212,222 | ) |
| Accretion of discount on preferred stock                   |   |            |  15,605 |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | (15,605    | )                                             |   |   |                             |    |   |   |   |   |   |   | - |   |
| SOP Expense                                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 47,215     |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 47,215 |   |
| MRP expense                                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 12,809     |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 12,809 |   |
| Tax benefit of MRP                                         |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 2,422      |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 2,422 |   |
| Exercise of stock options                                  |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | (354,689   | )      |           |   |       |                                          |   |   | 515,758                          |    |   |   |   |   |   |   | 161,069 |   |
| Balance at June 30, 2009                                   |   | $               | 9,388,815    |   |         | $      | 29,572 |                             |   | $      | 176,790                    |   |   | $                 | 16,344,725 |   |           | $      | 29,947,297 |                                          |   | $      | (13,994,870                      | )       |   | $ | 116,009 |   |   | $ | 42,008,338 |   |
| Net income                                                 |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | 4,625,588  |                                          |   |   |                             |    |   |   |   |   |   |   | 4,625,588 |   |
| Change in unrealized gain on available for sale securities |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   | 469,737 |   |   |   | 469,737 |   |
| Defined benefit pension plan net gain                      |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   | 2,218 |   |   |   | 2,218 |   |
| Total Comprehensive Income                                 |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 5,097,543 |   |
| Dividends paid on common stock ($.48 per share)            |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | (1,002,156 | )                                             |   |   |                             |    |   |   |   |   |   |   | (1,002,156 | ) |
| Dividends paid on preferred stock                          |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | (477,500   | )                                             |   |   |                             |    |   |   |   |   |   |   | (477,500 | ) |
| Accretion of discount on preferred stock                   |   |            | 32,506       |   |         |   |   |                             |   |   |                       |   |   |              |       |   |           |   | (32,506    | )                                             |   |   |                             |    |   |   |   |   |   |   | - |   |
| SOP Expense                                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 11,072     |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 11,072 |   |
| MRP expense                                                |   |            |         |   |         |   |   |                             |   |   |                       |   |   |              | 11,901     |   |           |   |       |                                          |   |   |                             |    |   |   |   |   |   |   | 11,901 |   |
| Balance at June 30, 2010                                   |   | $               | 9,421,321    |   |         | $      | 29,572 |                             |   | $      | 176,790                    |   |   | $                 | 16,367,698 |   |           | $      | 33,060,723 |                                          |   | $      | (13,994,870                      | )       |   | $ | 587,964 |   |   | $ | 45,649,198 |   |

| Cash flows from operating activities:                                                                                |   | 2010   |        |   | 2009   |   |        | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
| Net incomeItems not requiring (providing) cash:                                                                      |   | $      | 4,625,588   |   |   | $      | 3,835,077   |   |   | $ | 3,613,480 |   |
| Depreciation                                                                                                         |   |   | 709,981     |   |   |   | 625,582     |   |   |   | 680,693 |   |
| Loss on disposal of fixed assets                                                                                     |   |   | 280,521     |   |   |   | -           |   |   |   | - |   |
| SOP and MRP expense                                                                                                  |   |   | 22,973      |   |   |   | 62,446      |   |   |   | 73,075 |   |
| AFS securities losses due to other-than-temporary     impairment                                 |   |   | -           |   |   |   | 678,973     |   |   |   | - |   |
| Net realized gains on available     for sale securities                                               |   |   | -           |   |   |   | -           |   |   |   | (6,084 | ) |
| Loss (gain) on sale of foreclosed assets                                                                             |   |   | 84,324      |   |   |   | (21,369     | )      |   |   | (18,455 | ) |
| Amortization of intangible assets                                                                                    |   |   | 289,066     |   |   |   | 255,258     |   |   |   | 255,258 |   |
|     Increase in cash surrender value       of bank owned life insurance |   |   | (273,074    | )      |   |   | (274,036    | )      |   |   | (291,254 | ) |
| Provision for loan losses                                                                                            |   |   | 924,993     |   |   |   | 1,150,985   |   |   |   | 722,516 |   |
| Amortization of premiums and discounts     on securities                                              |   |   | 200,952     |   |   |   | 136,347     |   |   |   | (52,965 | ) |
| Deferred income taxes                                                                                                |   |   | (541,000    | )      |   |   | (293,000    | )      |   |   | (504,000 | ) |
| Changes in:                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Accrued interest receivable                                                                                          |   |   | (261,572    | )      |   |   | 361,616     |   |   |   | (763,713 | ) |
| Prepaid expenses and other assets                                                                                    |   |   | (1,090,179  | )      |   |   | 95,720      |   |   |   | 49,053 |   |
| Accounts payable and other liabilities                                                                               |   |   | (26,288     | )      |   |   | 454,379     |   |   |   | 327,570 |   |
| Accrued interest payable                                                                                             |   |   | (192,688    | )      |   |   | (210,683    | )      |   |   | (206,511 | ) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES                                                                            |   | $      | 4,753,537   |   |   | $      | 6,857,295   |   |   | $ | 3,878,663 |   |
| Cash flows from investing activities:                                                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Net cash received in acquisitions                                                                                    |   | $      | 9,713,304   |   |   | $      | -           |   |   | $ | - |   |
| Net change in interest-bearing deposits                                                                              |   |   | (1,089,000  | )      |   |   | 1,980,000   |   |   |   | (1,980,000 | ) |
| Net increase in loans                                                                                                |   |   | (37,503,760 | )      |   |   | (27,425,708 | )      |   |   | (32,445,458 | ) |
| Proceeds from sales of     available for sale securities                                              |   |   | -           |   |   |   | -           |   |   |   | 233,500 |   |
| Proceeds from maturities of     available for sale securities                                         |   |   | 16,631,759  |   |   |   | 9,227,820   |   |   |   | 24,698,058 |   |
| Purchases of available for     sale securities                                                        |   |   | (21,270,406 | )      |   |   | (29,141,403 | )      |   |   | (30,345,266 | ) |
| Investment in federal and state tax credits                                                                          |   |   | (1,250,000  | )      |   |   | (1,263,944  | )      |   |   | - |   |
| Redemption (purchase) of Federal Home Loan Bank stock                                                                |   |   | 1,970,700   |   |   |   | (1,268,600  | )      |   |   | (253,100 | ) |
| Purchase of Federal Reserve Bank of St. Louis stock                                                                  |   |   | (583,100    | )      |   |   | -           |   |   |   | - |   |
| Purchase of premises and equipment                                                                                   |   |   | (1,131,254  | )      |   |   | (556,043    | )      |   |   | (234,651 | ) |
| Proceeds from sale of fixed assets                                                                                   |   |   | 2,006,263   |   |   |   | -           |   |   |   | - |   |
| Proceeds from sale of foreclosed and repossessed property                                                            |   |   | 1,296,410   |   |   |   | 352,194     |   |   |   | 578,367 |   |
| NET CASH USED IN INVESTING ACTIVITIES                                                                                |   | $      | (31,209,084 | )      |   | $      | (48,095,684 | )      |   | $ | (39,748,550 | ) |

| Cash flows from financing activities:                          |   | 2010   |        |   | 2009   |   |         | 2008   |   |
|----------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|--------------|--------|--------|
| Net increase in demand deposits and savings accounts      |   | $      | 74,540,768  |   |   | $      | 9,750,488    |   |   | $ | 2,405,635 |   |
| Net increase in certificates of deposit                   |   |   | 7,332,057   |   |   |   | 9,947,935    |   |   |   | 19,763,314 |   |
| Net increase in securities sold under agreements to repurchase |   |   | 6,621,191   |   |   |   | 1,944,044    |   |   |   | 4,045,149 |   |
| Proceeds from Federal Home Loan Bank advances                  |   |   | 30,950,000  |   |   |   | 212,675,000  |   |   |   | 353,550,000 |   |
| Repayments of Federal Home Loan Bank advances                  |   |   | (66,200,000 | )      |   |   | (197,975,000 | )      |   |   | (343,500,000 | ) |
| Proceeds from issuance of preferred stock                      |   |   | -           |   |   |   | 9,511,129    |   |   |   | - |   |
| Dividends paid on preferred stock                              |   |   | (477,500    | )      |   |   | (212,222     | )      |   |   | - |   |
| Dividends paid on common stock                                 |   |   | (1,002,156  | )      |   |   | (1,024,172   | )      |   |   | (884,115 | ) |
| Exercise of stock options                                      |   |   | -           |   |   |   | 161,069      |   |   |   | 565,625 |   |
| Purchases of treasury stock                                    |   |   | -           |   |   |   | (1,507,825   | )      |   |   | (1,364,279 | ) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                      |   | $      | 51,764,360  |   |   | $      | 43,270,446   |   |   | $ | 34,581,329 |   |
| Increase (Decrease) in cash and cash equivalents               |   |   | 25,308,813  |   |   |   | 2,032,057    |   |   |   | (1,288,558 | ) |
| Cash and cash equivalents at beginning of year                 |   |   | 8,074,465   |   |   |   | 6,042,408    |   |   |   | 7,330,966 |   |
| CASH AND CASH EQUIVALENTS AT END OF YEAR                       |   | $      | 33,383,278  |   |   | $      | 8,074,465    |   |   | $ | 6,042,408 |   |
| Supplemental disclosures of cash flow information:             |   |   |        |   |   |   |         |   |   |   |   |   |
| Noncash investing and financing activities                     |   |   |        |   |   |   |         |   |   |   |   |   |
| Conversion of loans to foreclosed real estate                  |   | $      | 1,925,854   |   |   | $      | 477,177      |   |   | $ | 654,369 |   |
| Conversion of foreclosed real estate to loans                  |   | $      | 196,944     |   |   | $      | 13,172       |   |   | $ | 235,000 |   |
|                                                           |   |   |        |   |   |   |         |   |   |   |   |   |
| Cash paid during the period for                                |   |   |        |   |   |   |         |   |   |   |   |   |
| Interest (net of interest credited)                            |   | $      | 4,142,105   |   |   | $      | 4,981,065    |   |   | $ | 5,050,895 |   |
| Income taxes                                                   |   | $      | 1,598,000   |   |   | $      | 1,886,405    |   |   | $ | 1,965,393 |   |

| NOTE 1:  Organization and Summary of Significant Accounting PoliciesOrganization. Southern Missouri Bancorp, Inc., a Missouri corporation (the Company) was organized in 1994 and is the parent company of Southern Bank (the Bank). Substantially all of the Company’s consolidated revenues are derived from the operations of the Bank, and the Bank represents substantially all of the Company’s consolidated assets and liabilities. Basis of Financial Statement Presentation. The financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America and general practices within the banking industry. In the normal course of business, the Company encounters two significant types of risk: economic and regulatory. Economic risk is comprised of interest rate risk, credit risk, and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities reprice on a different basis than its interest-earning assets. Credit risk is the risk of default on the Company’s loan portfolio that results from the borrowers’ inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the value of the Company’s investment in real estate. Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, other-than-temporary impairments (OTTI), and fair value of financial instruments. Cash and Cash Equivalents. For purposes of reporting cash flows, cash and cash equivalents includes cash, due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less. Interest-bearing deposits in other depository institutions were $31,246,703 and $5,614,330 at June 30, 2010 and 2009, respectively. The deposits are held in various commercial banks in amounts not exceeding the FDIC’s deposit insurance limits, as well as at the Federal Reserve and the Federal Home Loan Bank of Des Moines. Available for Sale Securities. Available for sale securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future are carried at fair value. Unrealized gains and losses, net of tax, are reported in accumulated other comprehensive income, a component of stockholders’ equity. All securities have been classified as available for sale.Premiums and discounts on debt securities are amortized or accreted as adjustments to income over the estimated life of the security using the level yield method. Realized gains or losses on the sale of securities is based on the specific identification method. The fair value of securities is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.The Company does not invest in collateralized mortgage obligations that are considered high risk.Effective April 1, 2009, the Company adopted new accounting guidance related to recognition and presentation of other-than-temporary impairment |   | (ASC 320-10). When the Company does not intend to sell a debt security, and it is more likely than not the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income.As a result of this guidance, the Company’s consolidated statement of income as of June 30, 2010, reflects the full impairment (that is, the difference between the security’s amortized cost basis and fair value) on debt securities that the Company intends to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale debt securities that management has no intent to sell and believes that it more likely than not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the noncredit loss is recognized in accumulated other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.Prior to the adoption of the recent accounting guidance on April 1, 2009, management considered, in determining whether other-than-temporary impairment exists, (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the company to retain its investment in the issuer for a period time sufficient to allow for any anticipated recovery in fair value. Federal Reserve Bank and Federal Home Loan Bank Stock. The Bank is a member of the Federal Reserve and the Federal Home Loan Bank (FHLB) systems. Capital stock of the Federal Reserve and the FHLB is a required investment based upon a predetermined formula and is carried at cost. Loans. Loans are generally stated at unpaid principal balances, less the allowance for loan losses and net deferred loan origination fees. Interest on loans is accrued based upon the principal amount outstanding. The accrual of interest on loans is discontinued when, in management’s judgment, the collectibility of interest or principal in the normal course of business is doubtful. A loan is considered delinquent when a payment has not been made by the contractual due date. Interest income previously accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. Cash receipts on a nonaccrual loan are applied to principal and interest in accordance with its contractual terms unless full payment of principal is not expected, in which case cash receipts, whether designated as principal or interest, are applied as a reduction of the carrying value of the loan. A nonaccrual loan is generally returned to accrual status when principal and interest payments are current, full collectibility of principal and interest is reasonably assured and a consistent record of performance has been demonstrated.The allowance for losses on loans represents management’s best estimate of losses probable in the existing loan portfolio. The allowance for losses on loans is increased by the provision for losses on loans charged to expense and reduced by loans charged off, net of recoveries. Loans are charged off in the period deemed uncollectible. Recoveries of loans previously charged off are recorded when received. The provision for losses on loans is determined based on management’s assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experience, the level of classified and nonperforming loans and the results of regulatory examinations.  |
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| Valuation allowances are established for impaired loans for the difference between the loan amount and fair value of collateral less estimated selling costs. Impairment losses are recognized through an increase in the allowance for loan losses.Loans are considered impaired if, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the interest method over the contractual life of the loans. Foreclosed Real Estate. Real estate acquired by foreclosure or by deed in lieu of foreclosure is initially recorded at the lower of cost or fair value less estimated selling costs. Costs for development and improvement of the property are capitalized.Valuations are periodically performed by management, and an allowance for losses is established by a charge to operations if the carrying value of a property exceeds its estimated fair value, less estimated selling costs.Loans to facilitate the sale of real estate acquired in foreclosure are discounted if made at less than market rates. Discounts are amortized over the fixed interest period of each loan using the interest method. Premises and Equipment. Premises and equipment are stated at cost less accumulated depreciation and include expenditures for major betterments and renewals. Maintenance, repairs, and minor renewals are expensed as incurred. When property is retired or sold, the retired asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss taken into income. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment loss recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets.Depreciation is computed by use of straight-line and accelerated methods over the estimated useful lives of the assets. Estimated lives are generally 20 to 40 years for premises, and five to seven years for equipment. Intangible Assets. The Company’s gross amount of intangible assets at June 30, 2010 and 2009 was $4,114,401 and $3,837,416, respectively, with accumulated amortization of $2,510,029 and $2,254,771, respectively. The Company’s intangible assets are being amortized over periods ranging from five to fifteen years, with amortization expense expected to be approximately $292,000 per year over the next five years. Income Taxes. The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be |   | realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to the management’s judgement. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.The Company recognizes interest and penalties on income taxes as a component of income tax expense.The Company files consolidated income tax returns with its subsidiary. Incentive Plan. The Company accounts for its management and recognition plan (MRP) in accordance with ASC 718, formerly Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), “Share-Based Payment.” The aggregate purchase price of all shares owned by the incentive plan is reflected as a reduction of stockholders’ equity. Compensation expense is based on the market price of the Company’s stock on the date the shares are granted and is recorded over the vesting period. The difference between the aggregate purchase price and the fair value on the date the shares are considered earned is recorded as an adjustment to additional paid in capital. Outside Directors’ Retirement. The Bank adopted a directors’ retirement plan in April 1994 for outside directors. The directors’ retirement plan provides that each non-employee director (participant) shall receive, upon termination of service on the Board on or after age 60, other than termination for cause, a benefit in equal annual installments over a five year period. The benefit will be based upon the product of the participant’s vesting percentage and the total Board fees paid to the participant during the calendar year preceding termination of service on the Board. The vesting percentage shall be determined based upon the participant’s years of service on the Board, whether before or after the reorganization date.In the event that the participant dies before collecting any or all of the benefits, the Bank shall pay the participant’s beneficiary. No benefits shall be payable to anyone other than the beneficiary, and shall terminate on the death of the beneficiary. Stock Options. The Company adopted ASC 718, formerly Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), “Share-Based Payment,” which requires the compensation costs related to share-based payment transactions to be recognized in financial statements, in the first quarter of fiscal 2006, primarily due to the Company’s transition from a small business filer to a full filer. With limited exceptions, the amount of compensation cost is measured based on the grant-date fair value of the equity instruments issued. Compensation cost is recognized over the vesting period during which an employee provides service in exchange for the award. Stock-based compensation has been recognized for all stock options granted or modified after July 1, 2005. In addition, stock options not vested on July 1, 2005, were recognized in expense over their remaining vesting period.  Employee Stock Ownership Plan. The Company accounts for its employee stock ownership plan (ESOP) in accordance with ASC 718, formerly American Institute of Certified Public Accountants (AICPA) Statement of Position 93-6.  |
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| As of June 30, 2005, the ESOP shares reserved at the initial public offering were fully distributed and the ESOP began purchasing additional shares using annual cash contributions to the plan from the Bank. Earnings Per Share. Basic earnings per share available to common stockholders is computed using the weighted-average number of common shares outstanding. Diluted earnings per share available to common stockholders includes the effect of all dilutive potential common shares (stock options and warrants) outstanding during each year. Comprehensive Income. Comprehensive income consists of net income and other comprehensive income, net of applicable income taxes. Other comprehensive income includes unrealized appreciation (depreciation) on available-for-sale securities, unrealized appreciation (depreciation) on available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income, and changes in the funded status of defined benefit pension plans. Treasury Stock. Treasury stock is stated at cost. Cost is determined by the first-in, first-out method. Reclassification. Certain amounts included in the 2009 and 2008 consolidated financial statements have been reclassified to conform to the 2010 presentation. These reclassifications had no effect on net income. The following paragraphs summarize the impact of new accounting pronouncements:In December 2007, the FASB issued ASC 805, formerly Statement No. 141 (revised 2007), “Business Combinations—A Replacement of FASB Statement No. 141” and ASC 810, formerly Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—An Amendment of ARB No. 51.”  ASC 805 establishes principles and requirements for how an acquirer recognizes and measures certain items in a business combination, as well as disclosures about the nature and financial effects of a business combination.  ASC 810 establishes accounting and reporting standards surrounding noncontrolling interest, or minority interests, which are the portions of equity in a subsidiary not attributable, directly or indirectly, to a parent.  The pronouncements were effective for the Company beginning July 1, 2009.  Presentation and disclosure requirements related to noncontrolling interests must be retrospectively applied.  The Company was impacted by the adoption of ASC 805 with its July 2009 acquisition.  The Company does not have any noncontrolling interests; thus, there was no effect to the financial statements related to the adoption of ASC 810.In April 2009, the FASB issued ASC 825, formerly FASB Staff Position on FAS 107-1 and APB No. 28-1, “Interim Disclosures About Fair Value of Financial Instruments,” which requires disclosures about fair value of financial instruments in interim reporting periods of publicly traded companies that were previously only required to be disclosed in annual financial statements.  The provisions of ASC 825 were effective for the Company’s interim period ending September 30, 2009.  As ASC 825 amends only the disclosure requirements about fair value of financial instruments in interim periods, the adoption of ASC 825 did not affect the Company’s consolidated financial statements.On June 12, 2009, the FASB issued ASC 860, formerly Statement No. 166, “Accounting for Transfers of Financial Assets”. ASC 860 is a revision to SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” and will require more information about transfers of financial assets, including securitization transactions, and where companies will have continuing exposure to the risks related to transferred |   | financial assets. ASC 860 also eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. ASC 860 will be effective as of the beginning of the Company’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. The recognition and measurement provisions of ASC 860 shall be applied to transfers that occur on or after the effective date. The Company will adopt ASC 860 on July 1, 2010, as required. Management does not expect adoption of the Statement to have a material impact on the Company’s consolidated financial statements.On June 12, 2009, the FASB issued ASC 810, formerly Statement No. 167, “Amendments to FASB Interpretation No. 46(R)”. ASC 810 is a revision to FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” and changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design, and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. ASC 810 will be effective as of the Company’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and annual reporting periods thereafter. Earlier application is prohibited. The Company will adopt ASC 810 on July 1, 2010, as required. Management does not expect adoption of the Statement to have a material impact on the Company’s consolidated financial statements.In February 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-09,  “Subsequent Events (Topic 855) – Amendments to Certain Recognition and Disclosure Requirements.”   ASU 2010-09 amends the subsequent event disclosure guidance.  The amendments include a definition of an SEC filer, requires and SEC filer to evaluate subsequent events through the date the financial statements are issued, and removes the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated.  ASU 2010-09 was effective upon issuance, and adoption did not have a material impact on the Company’s consolidated financial statements.In January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements.”  ASU 2010-06 amends the fair value disclosure guidance.  The amendments include new disclosures and changes to clarify existing disclosure requirements.  ASU 2010-06 was effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements of Level 3 fair value measurements; those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  Adoption of the ASU did not have a material effect on the Company’s financial statements.In June 2010, the FASB issued an Exposure Draft of a proposed Accounting Standards Update (the Proposed Update) regarding Fair Value Measurement and Disclosures (Topic 820) – Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.  The Proposed Update would establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards.  An effective date for the Proposed Update would be established at the time a final ASU was issued. The Company is continuing to evaluate the potential impact of adoption of the Proposed Update, but it is expected to have a material effect on the Company’s financial statements.  |
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| In July 2010, the FASB issued ASU No. 2010-10, “Receivables (Topic 310) – Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.”  ASU 2010-10 requires disclosures that allow financial statement users to evaluate the nature of credit risk inherent in the entity’s portfolio of financing receivables, how that risk is analyzed and assessed |   | in arriving at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses.  ASU 2010-10 will be effective for interim and annual reporting periods beginning on or after December 15, 2010; the Company does not expect adoption of the ASU to have a material effect on the Company’s financial statements.  |
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|                                                                                |   | June 30, 2010 |       |
|-------------------------------------------------------------------------------------|--------|---------------|------------|
|                                                                                |   | AmortizedCost |       |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
| Debt and equity securities:                                                         |   |          |       |   |   |   |   |   |   |   |   |   |
|   U.S. government and    Federal agency obligations   |   | $             | 12,345,409 |   |   | $ | 68,568 |   |   | $ | - |   |   | $ | 12,413,977 |   |
|   Obligations of states and    political subdivisions |   |          | 19,351,837 |   |   |   | 454,941 |   |   |   | (37,661 | ) |   |   | 19,769,117 |   |
| FHLMC preferred stock                                                               |   |          | -          |   |   |   | 6,000 |   |   |   | - |   |   |   | 6,000 |   |
| Other securities                                                                    |   |          | 1,771,299  |   |   |   | 4,306 |   |   |   | (1,333,737 | ) |   |   | 441,868 |   |
| TOTAL DEBT AND EQUITY SECURITIES                                                    |   |          | 33,468,545 |   |   |   | 533,815 |   |   |   | (1,371,398 | ) |   |   | 32,630,962 |   |
| Mortgage-backed securities:                                                         |   |          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLMC certificates                                                                  |   |          | 7,316,562  |   |   |   | 498,133 |   |   |   | - |   |   |   | 7,814,695 |   |
| GNMA certificates                                                                   |   |          | 99,148     |   |   |   | 2,028 |   |   |   | - |   |   |   | 101,176 |   |
| FNMA certificates                                                                   |   |          | 7,101,611  |   |   |   | 511,596 |   |   |   | (148 | ) |   |   | 7,613,059 |   |
| CMOs issued by government agencies                                                  |   |          | 18,064,231 |   |   |   | 741,290 |   |   |   | - |   |   |   | 18,805,521 |   |
| TOTAL MORTGAGE-BACKED SECURITIES                                                    |   |          | 32,581,552 |   |   |   | 1,753,047 |   |   |   | (148 | ) |   |   | 34,334,451 |   |
| TOTAL                                                                               |   | $             | 66,050,097 |   |   | $ | 2,286,862 |   |   | $ | (1,371,546 | ) |   | $ | 66,965,413 |   |
|                                                                                |   |          |       |   |   |   |   |   |   |   |   |
|                                                                                |   |          |       |   |   |   |   |   |   |   |   |
|                                                                                |   |          |       |   |   | June 30, 2009 |   |   |   |   |   |
|                                                                                |   |          |       |   |   | Gross |   |   | Gross |   |   |   |   |   |
|                                                                                |   | Amortized     |       |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                                                |   | Cost          |       |   | Gains |   |   | Losses |   |   | Value |   |
| Debt and equity securities:                                                         |   |          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government and Federal agency obligations                                      |   | $             | 3,216,975  |   |   | $ | 61,733 |   |   | $ | - |   |   | $ | 3,278,708 |   |
|   Obligations of states and    political subdivisions |   |          | 13,512,789 |   |   |   | 212,308 |   |   |   | (102,402 | ) |   |   | 13,622,695 |   |
| FHLMC preferred stock                                                               |   |          | -          |   |   |   | 7,920 |   |   |   | - |   |   |   | 7,920 |   |
| Other securities                                                                    |   |          | 4,264,409  |   |   |   | - |   |   |   | (1,264,753 | ) |   |   | 2,999,656 |   |
| TOTAL DEBT AND EQUITY SECURITIES                                                    |   |          | 20,994,173 |   |   |   | 281,961 |   |   |   | (1,367,155 | ) |   |   | 19,908,979 |   |
| Mortgage-backed securities:                                                         |   |          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLMC certificates                                                                  |   |          | 10,163,401 |   |   |   | 236,649 |   |   |   | (1,839 | ) |   |   | 10,398,211 |   |
| GNMA certificates                                                                   |   |          | 113,986    |   |   |   | 667 |   |   |   | (153 | ) |   |   | 114,500 |   |
| FNMA certificates                                                                   |   |          | 9,811,522  |   |   |   | 307,453 |   |   |   | (6,795 | ) |   |   | 10,112,180 |   |
| CMOs issued by government agencies                                                  |   |          | 18,925,210 |   |   |   | 718,912 |   |   |   | - |   |   |   | 19,644,122 |   |
| TOTAL MORTGAGE-BACKED SECURITIES                                                    |   |          | 39,014,119 |   |   |   | 1,263,681 |   |   |   | (8,787 | ) |   |   | 40,269,013 |   |
| TOTAL                                                                               |   | $             | 60,008,292 |   |   | $ | 1,545,642 |   |   | $ | (1,375,942 | ) |   | $ | 60,177,992 |   |

|                                           |   |   | June 30,2010 |       |
|------------------------------------------------|--------|--------|--------------|------------|
|                                           |   |   | Amortized    |       |   | EstimatedFair |   |
| Available for Sale                             |   |   | Cost         |       |   | Value |   |
| Within one year                                |   |   | $            | 1,024,775  |   |   | $ | 1,034,591 |   |
| After one but less than five years             |   |   |         | 1,080,000  |   |   |   | 1,089,152 |   |
| After five but less than 10 years              |   |   |         | 8,977,332  |   |   |   | 9,040,922 |   |
| After 10 years                                 |   |   |         | 22,386,438 |   |   |   | 21,466,297 |   |
|     Total investment securities |   |   |         | 33,468,545 |   |   |   | 32,630,962 |   |
| Mortgage-backed securities - GSE residential   |   |   |         | 32,581,552 |   |   |   | 34,334,451 |   |
|                                           | TOTAL  |   | $            | 66,050,097 |   |   | $ | 66,965,413 |   |

| The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits and securities sold under agreements to repurchase amounted to $62,020,336 and $46,361,060 at June 30, 2010 and 2009, respectively.No gains or losses resulted from sales of available-for-sale securities in 2010 or 2009. Gross gains of $6,084, and no gross losses resulted from sales of available-for-sale securities in 2008.With the exception of U.S. government agencies and corporations, the Company did not hold any securities of a single issuer, payable from and secured by the same source of revenue or taxing authority, the book value of which exceeded 10% of stockholders’ equity at June 30, 2010.  |   | Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2010 was $4.9 million, which is approximately 7.3% of the Company’s available for sale investment portfolio, as compared to $5.6 million or approximately 9.3% of the Company’s available for sale investment portfolio at June 30, 2009. Except as discussed below, management believes the declines in fair value for these securities to be temporary.The tables below show our investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2010 and 2009.  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   | Less than 12 months |      |   | 12 months or more      |   |   | Total            |   |
|-------------------------------------------------|--------|---------------------|-----------|--------|------------------------|--------|--------|------------------|--------|
| Description of Securities                       |   | Fair Value          |      |   |  UnrealizedLosses |   |   |  Fair Value |   |   |  UnrealizedLosses |   |   |  Fair Value |   |   |  UnrealizedLosses |   |
| For the year ended June 30, 2010                |   |                |      |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities - GSE residential    |   | $                   | -         |   |                   | $      | -      |             |   | $ | 27,349 |   |   | $ | 148 |   |   | $ | 27,349 |   |   | $ | 148 |   |
| Other securities                                |   |                | -         |   |                   |   | -      |             |   |   | 191,218 |   |   |   | 1,333,737 |   |   |   | 191,218 |   |   |   | 1,333,737 |   |
| Obligations of state and political subdivisions |   |                | 4,677,991 |   |                   |   | 37,661 |             |   |   | - |   |   |   | - |   |   |   | 4,677,991 |   |   |   | 37,661 |   |
| Total temporarily impaired securities           |   | $                   | 4,677,991 |   |                   | $      | 37,661 |             |   | $ | 218,567 |   |   | $ | 1,333,885 |   |   | $ | 4,896,558 |   |   | $ | 1,371,546 |   |
|                                            |   |                |      |   |                   |   |   |             |   |
|                                            |   |                |      |   |                   |   |   |             |   |
|                                            |   | Less than 12 months |      |   | 12 months or more      |   |   | Total            |   |
| Description of Securities                       |   | Fair Value          |      |   | UnrealizedLosses       |   |   | Fair Value       |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
| For the year ended June 30, 2009                |   |                |      |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities - GSE residential    |   | $                   | 276,201   |   |                   | $      | 1,992  |             |   | $ | 291,621 |   |   | $ | 6,795 |   |   | $ | 567,822 |   |   | $ | 8,787 |   |
| Other securities                                |   |                | -         |   |                   |   | -      |             |   |   | 249,656 |   |   |   | 1,264,753 |   |   |   | 249,656 |   |   |   | 1,264,753 |   |
| Obligations of state and political subdivisions |   |                | 3,243,030 |   |                   |   | 82,933 |             |   |   | 1,547,675 |   |   |   | 19,469 |   |   |   | 4,790,705 |   |   |   | 102,402 |   |
| Total temporarily impaired securities           |   | $                   | 3,519,231 |   |                   | $      | 84,925 |             |   | $ | 2,088,952 |   |   | $ | 1,291,017 |   |   | $ | 5,608,183 |   |   | $ | 1,375,942 |   |

| Other Securities. At June 30, 2010, there were four pooled trust preferred securities with a fair value of $191,000 and unrealized losses of $1.3 million in a continuous unrealized loss position for twelve months or more.  These unrealized losses were primarily due to the long-term nature of the pooled trust preferred securities, a lack of demand or inactive market for these securities, and concerns regarding the financial institutions that have issued the underlying trust preferred securities. The June 30, 2010 cash flow analysis for three of these securities showed it is probable the Company will receive all contracted principal and related interest projected, though interest payments have been deferred on two of the three securities. The cash flow analysis used in making this determination was based on anticipated default and recovery rates, amounts of prepayments, and the resulting cash flows were discounted based on the yield anticipated at the time the securities were purchased.  Other inputs include the actual collateral attributes, which include credit ratings and other performance indicators of the underlying financial institutions, including profitability, capital ratios, and asset quality.  Assumptions for these securities included no prepayments, no recoveries on issuers currently in default, recoveries of 28% to 36% on currently deferred issuers in the next two years, no new deferrals for the next two years, and annual defaults of 36 basis points (with 10% recoveries, lagged two years) thereafter.   Because the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these securities prior to recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other than temporarily impaired at June 30, 2010.  At December 31, 2008, analysis of the fourth pooled trust preferred security indicated other-than-temporary impairment (OTTI) and the Company performed further analysis to determine the portion of the loss that was related to credit conditions of the underlying issuers. The credit loss was calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. The discounted cash flow was based on anticipated default and recovery rates, and resulting projected cash flows were discounted based on the yield anticipated at the time the security was purchased.  Based on this analysis, the Company recorded an impairment charge of $375,000 for the credit portion of the unrealized loss for this trust preferred security. This loss established a new, lower amortized cost basis of $125,000 for this security, and reduced non-interest income for the second quarter and the twelve months ended June 30, 2009. At June 30, 2010, cash flow analyses showed it is probable the Company will receive all of the remaining cost basis and related interest projected for the security. Because the Company does not intend to sell this security and it is not more-likely-than-not the Company will be required to sell this security before recovery of its new, lower amortized cost basis, which may be maturity, the Company does not consider the remainder of the investment in this security to be other-than-temporarily impaired at June 30, 2010.During the first quarter of fiscal 2009, the Company’s investments in Freddie Mac Preferred Stock was deemed other than temporarily impaired, based on quoted market prices which reflected market participants’ expectations regarding the likelihood of recovery of their investment following the placement of the firm into receivership by the U.S. Treasury Department.  Accordingly, the Company recorded an impairment charge for the full amortized cost of the security, $304,000.  The loss established a new, lower amortized cost basis of $0 for this security, and reduced non-interest income for the first quarter of fiscal 2009.  |                                                                                                                                                        | The Company does not believe any other individual unrealized loss as of June 30, 2010, represents OTTI. However, given the continued disruption in the financial markets, the Company may be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in the period the other-than-temporary impairment is identified. Credit Losses Recognized on Investments. As described above, some of the Company’s investments in trust preferred securities have experienced fair value deterioration due to credit losses, but are not otherwise other-than-temporarily impaired. During fiscal 2009, the Company adopted ASC 820, formerly FASB Staff Position 157-4, “Determining Fair Value when the Volume and Level of Activity For the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” The following table provides information about the trust preferred security for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income (loss) for the years ended June 30, 2010 and 2009.  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                        | Accumulated Credit Losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                        | Year Ended June 30                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                        | 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2009 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Credit losses on debt securities held                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Beginning of period                                                                                                                                         | $                   375,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $                     - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    Additions related to OTTI      losses not previously recognized                                             | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 375,000 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    Reductions due to sales                                                                                                                   | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    Reductions due to change in intent      or likelihood of sale                                               | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    Additions related to increases in      previously recognized OTTI      losses | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    Reductions due to increases in expected cash flows                                                                                        | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | End of period                                                                                                                                               | $                   375,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $            375,000 |

|                      |   | June 30                                                             |
|---------------------------|--------|---------------------------------------------------------------------|
|                      |   | 2010                                                                | 2009 |
| Real estate loans:        |   |                                                                |   |
| Residential               |   | $          158,494,230 | $          155,490,317 |
| Construction              |   | 27,951,418                                                          | 23,531,528 |
| Commercial                |   | 121,525,818                                                         | 97,160,828 |
| Consumer loans            |   | 26,323,936                                                          | 23,141,738 |
| Commercial                |   | 97,480,888                                                          | 89,065,652 |
|                      |   | 431,776,290                                                         | 388,390,063 |
| Loans in process          |   | (8,705,521 )                                                        | (15,511,237 ) |
| Deferred loan fees, net   |   | 120,769                                                             | 107,346 |
| Allowance for loan losses |   | (4,508,611 )                                                        | (3,992,961 ) |
|                      | TOTAL  | $          418,682,927 | $          368,993,211 |

|                                       | June 30                |
|--------------------------------------------|------------------------|
|                                       | 2010                   | 2009 | 2008 |
| Balance, beginning of period               | $  3,992,961 | $  3,198,969 | $  2,386,909 |
| Loans charged-off                          | (430,224)              | (382,542) | (93,755) |
| Recoveries of loans previously charged-off | 20,941                 | 25,549 | 183,299 |
| Net recoveries (charge-offs)               | (409,283)              | (356,993) | 89,544 |
| Provision charged to expense               | 924,933                | 1,150,985 | 722,516 |
| Balance, end of period                     | $  4,508,611 | $  3,992,961 | $  3,198,969 |

| Total loans past due 90 days or more and still accruing interest amounted to $94,000 and $137,000 at June 30, 2010 and 2009, respectively. The Company had ceased recognition of interest income on loans with a  book value of $238,000 and $659,000 at June 30, 2010 and 2009, respectively. The average balance of nonaccrual loans for the years ended June 30, 2010, 2009, and 2008 was $1.0 million, $66,000, and $28,000, respectively.  The allowance for losses allocated to nonaccrual loans at June 30, 2010 and 2009 was approximately $32,000 and $67,000, respectively.  Interest income recognized on these loans for the year ended June 30, 2010 and 2009 was $6,000 and $25,000, respectively, while interest income recognized on these loans for the year ended June 30, 2008, was immaterial.  Gross interest income would have been $60,000 and $52,000 for the years ended June 30, 2010 and 2009 respectively, and would have been immaterial for the year ended June 30, 2008,  if interest payments had been received in accordance with the original terms.  The Company is not committed to lend additional funds to customers whose loans have been placed on nonaccrual status.  |                         | Of the above nonaccrual loans at June 30, 2010, $33,000 was considered to be impaired, compared to $0 at June 30, 2009. Following is a summary of loans to directors, executive officers and loans to corporations in which executive officers and directors have a substantial interest: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                         |                                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                         | 2010                                                                                                                                                                                                                                                                                      | 2009 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Beginning balance            | $    8,463,714                                                                                                                                                                                                                                                        | $      8,460,333 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    Additions  | 2,653,939                                                                                                                                                                                                                                                                                 | 1,196,839 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    Repayments | (709,913)                                                                                                                                                                                                                                                                                 | (1,193,458) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Ending balance               | $  10,407,740                                                                                                                                                                                                                                                                   | $    8,463,714 |

|                              |   | June 30 |       |
|-----------------------------------|--------|---------|------------|
|                              |   | 2010    |       |   | 2009 |   |
| Land                              |   | $       | 1,488,697  |   |   | $ | 3,487,898 |   |
| Buildings and improvements        |   |    | 7,558,799  |   |   |   | 6,202,134 |   |
| Furniture, fixtures and equipment |   |    | 5,695,979  |   |   |   | 4,918,784 |   |
| Automobiles                       |   |    | 74,080     |   |   |   | 41,775 |   |
|                              |   |    | 14,817,555 |   |   |   | 14,650,591 |   |
| Less accumulated depreciation     |   |    | 7,167,310  |   |   |   | 6,515,499 |   |
| TOTAL                             |   | $       | 7,650,244  |   |   | $ | 8,135,092 |   |

|                          |   | June 30 |        |
|-------------------------------|--------|---------|-------------|
|                          |   | 2010    |        |   | 2009 |   |
| Noninterest-bearing accounts  |   | $       | 28,795,215  |   |   | $ | 21,303,646 |   |
| NOW accounts                  |   |    | 103,712,619 |   |   |   | 65,114,474 |   |
| Money market deposit accounts |   |    | 7,479,938   |   |   |   | 6,632,987 |   |
| Savings accounts              |   |    | 90,384,521  |   |   |   | 58,598,085 |   |
| TOTAL TRANSACTION ACCOUNTS    |   | $       | 230,372,293 |   |   | $ | 151,649,192 |   |

| Certificates:      |   |   |        |   |   |   |
|--------------------|--------|--------|-------------|--------|--------|--------|
|  0.00 - 0.99% |   | $      | 5,576,442   |   |   | $      | - |   |
|  1.00 - 1.99% |   |   | 82,606,152  |   |   |   | 45,305,667 |   |
|  2.00 - 2.99% |   |   | 57,960,992  |   |   |   | 51,985,401 |   |
|  3.00 - 3.99% |   |   | 33,905,369  |   |   |   | 47,719,837 |   |
|  4.00 - 4.99% |   |   | 10,736,794  |   |   |   | 13,898,373 |   |
|  5.00 - 5.99% |   |   | 1,734,865   |   |   |   | 1,396,998 |   |
| TOTAL CERTIFICATES |   |   | 192,520,614 |   |   |   | 160,306,276 |   |
| TOTAL DEPOSITS     |   | $      | 422,892,907 |   |   | $      | 311,955,468 |   |

| July 1, 2010 to June 30, 2011 |   | $      | 147,948,096 |   |
|-------------------------------|--------|--------|-------------|--------|
| July 1, 2011 to June 30, 2012 |   |   | 22,067,689  |   |
| July 1, 2012 to June 30, 2013 |   |   | 9,419,516   |   |
| July 1, 2013 to June 30, 2014 |   |   | 5,995,859   |   |
| July 1, 2014 to June 30, 2015 |   |   | 7,089,454   |   |
| Thereafter                    |   |   | -           |   |
| TOTAL                         |   | $      | 192,520,614 |   |

|                                      |   | June 30 |       |
|-------------------------------------------|--------|---------|------------|
|                                      |   | 2010    |       |   | 2009 |   |
| Year-end balance                          |   | $       | 30,368,748 |   |   | $ | 23,747,557 |   |
| Average balance during the year           |   |    | 27,673,908 |   |   |   | 24,344,511 |   |
| Maximum month-end balance during the year |   |    | 31,229,801 |   |   |   | 27,819,186 |   |
| Average interest during the year          |   |    | 0.84       | % |   |   | 0.94 | % |
| Year-end interest rate                    |   |    | 0.85       | % |   |   | 0.67 | % |

----

|                                                                 |                            |         | June 30                                                                                                        |
|----------------------------------------------------------------------|---------------------------------|--------------|----------------------------------------------------------------------------------------------------------------|
| Maturity                                                             | Call Date orQuarterlyThereafter | InterestRate | 2010                                                                                                           | 2009 |
|                                                                 |                            |         |                                                                                                           |   |
| Overnight borrowings and short-term  repurchase agreements | -                               | 0.96%        | $                  - | $    6,250,000 |
| 10-26-09                                                             | 09-01-03                        | 5.58%        | -                                                                                                              | 10,000,000 |
| 01-08-10                                                             | -                               | 1.43%        | -                                                                                                              | 5,000,000 |
| 01-20-10                                                             | 07-20-03                        | 5.85%        | -                                                                                                              | 5,000,000 |
| 10-27-10                                                             | 10-27-03                        | 5.94%        | -                                                                                                              | 9,000,000 |
| 12-09-10                                                             | 12-09-05                        | 6.01%        | 10,000,000                                                                                                     | 10,000,000 |
| 10-30-12                                                             | -                               | 4.87%        | 3,000,000                                                                                                      | 3,000,000 |
| 04-01-13                                                             | -                               | 3.65%        | 3,000,000                                                                                                      | 3,000,000 |
| 01-30-15                                                             | -                               | 3.75%        | 3,000,000                                                                                                      | 3,000,000 |
| 11-29-16                                                             | 11-29-07                        | 3.93%        | 5,000,000                                                                                                      | 5,000,000 |
| 11-29-16                                                             | 11-29-11                        | 4.42%        | 5,000,000                                                                                                      | 5,000,000 |
| 11-20-17                                                             | 11-22-10                        | 3.87%        | 3,000,000                                                                                                      | 3,000,000 |
| 11-29-17                                                             | 11-29-12                        | 4.07%        | 2,500,000                                                                                                      | 2,500,000 |
| 08-14-18                                                             | 08-15-11                        | 3.53%        | 4,000,000                                                                                                      | 4,000,000 |
| 08-14-18                                                             | 08-14-13                        | 4.04%        | 5,000,000                                                                                                      | 5,000,000 |
|                                                                 |                            | TOTAL        | $  43,500,000                                                                                             | $  78,750,000 |
| Weighted-average rate                                                |                            |         | 4.48%                                                                                                          | 4.31% |

| In addition to the above advances, the Bank had an available line of credit amounting to $103,318,000 and $52,515,000, with FHLB at June 30, 2010 and 2009, respectively.Advances from FHLB of Des Moines were secured by FHLB stock and commercial real estate and one- to four-family mortgage loans of $59,317,000 and $105,288,000 at June 30, 2010 and 2009, respectively. The principal maturities of FHLB advances at June 30, 2010, are at right:  |                          | FHLB Advance Maturities |        |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|-------------------------|-------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            | July 1, 2010 to June 30, 2011 |                    | $10,000,000 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            | July 1, 2011 to June 30, 2012 |                    | -           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            | July 1, 2012 to June 30, 2013 |                    | 6,000,000   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            | July 1, 2013 to June 30, 2014 |                    | -           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            | July 1, 2014 to June 30, 2015 |                    | 3,000,000   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            | July 1, 2015 and thereafter   |                    | 24,500,000  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                          | Total                   | $43,500,000 |

| NOTE 8:  Subordinated DebtSouthern Missouri Statutory Trust I issued $7.0 million of Floating Rate Capital Securities (the “Trust Preferred Securities”) with a liquidation value of $1,000 per share in March 2004. The securities are due in 30 years, redeemable after five years and bear interest at a floating rate based on LIBOR. At June 30, 2010, the current rate was 3.29%. The securities represent undivided beneficial interests in the trust, which was established by Southern Missouri for the purpose of issuing the securities. The Trust Preferred Securities were sold in a private transaction exempt from registration under the Securities Act of 1933, |   | as amended (the “Act”) and have not been registered under the Act.  The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.Southern Missouri Statutory Trust I used the proceeds from the sale of the Trust Preferred Securities to purchase Junior Subordinated Debentures of Southern Missouri Bancorp. Southern Missouri Bancorp, Inc. used its net proceeds for working capital and investment in its subsidiaries.  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 401(k). The Bank has a 401(k) profit sharing plan that covers substantially all eligible employees. Contributions to the plan are at the discretion of the Board of Directors of the Bank. During 2010, 2009, and 2008, there were no contributions made to the plan. Employee Stock Ownership Plan (ESOP). The Bank established a tax-qualified ESOP in April 1994. The plan covers substantially all employees who have attained the age of 21 and completed one year of service.Benefits are vested over five years. Forfeitures are allocated on the same basis as other contributions. Benefits are payable upon a participant’s retirement, death, disability or separation of service. The Bank makes discretionary contributions to the ESOP. The ESOP expense for 2010, 2009, and 2008 was $240,000, $210,000, and $200,000, respectively. The number of ESOP shares at June 30, 2010 and 2009 were as follows:  |   | The Board of Directors can terminate the MRPs at any time, and if it does so, any shares not allocated will revert to the Company. The MRP expense for 2010, 2009, and 2008, was $11,900, $12,809, and $19,777, respectively. Unvested compensation expense related to the MRP was immaterial. Stock Option Plan. The Company adopted a stock option plan in April 1994. The purpose of the plan was to provide additional incentive to certain directors, officers and key employees of the Bank. In October 1999, the stockholders voted to increase the number of shares reserved for options by 67,932 shares. The stock options were granted at the fair market value of the common stock on the date of the grant. For shares granted after June 30, 1999, the vesting period ranged from the grant date up to a five year period. All options expire ten years from the date of the grant. The 1994 stock option plan expired in April 2004, though 10,000 options awarded under that plan remain outstanding and exercisable. In October 2003, a new stock option and incentive plan was adopted (“2003 Plan”). Under the 2003 Plan, the Company has granted 95,500 options to employees and directors. Under both plans, exercised options may be issued from either authorized but unissued shares or treasury shares.As of June 30, 2010, there was $44,000 in remaining unrecognized compensation expense related to nonvested stock options, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of stock options outstanding at June 30, 2010, was $146,000.  The aggregate intrinsic value of stock options exercisable at June 30, 2010, was $88,000. No options were exercised or forfeited in fiscal 2010. The intrinsic value of options vested in fiscal 2010, 2009, and 2008 was $3,610, $0, and $4,000, respectively.  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2009 |   |
| Allocated shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 225,139                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 194,919 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
| Unreleased shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | - |   |
| TOTAL ESOP SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 225,139                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 194,919 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
| Management Recognition Plan (MRP). The Bank adopted an MRP for  the benefit of non-employee directors and two MRPs for officers and key employees (who may also be directors) in April 1994. During 2007, the Bank granted 1,000 MRP shares to employees; during 2008, an additional 2,500 shares were granted. The shares granted are in the form of restricted stock payable at the rate of 20% of such shares per year. During 2010, 700 MRP shares vested, which had been awarded in 2007 and 2008. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, will be recognized pro-rata over the five years during which the shares are payable.                                                                                                                                                                                                                             |   |

|                                               |   |  Year Ended June 30 |   |
|----------------------------------------------------|--------|--------------------------|--------|
|                                               |   | 2010                     |   |   | 2009 |   |   | 2008 |   |
|                                               |   | WeightedAveragePrice     |   |   | Number |   |   | WeightedAveragePrice |   |   | Number |   |   | WeightedAveragePrice |   |   | Number |   |
|    Outstanding at beginning of year |   | $                        | 14.01  |   |   |   | 85,500 |   |   | $ | 12.43 |   |   |   | 104,500 |   |   | $ | 10.73 |   |   |   | 176,500 |   |
|    Granted                          |   |                     | 12.75  |   |   |   | 20,000 |   |   |   | 12.15 |   |   |   | 5,000 |   |   |   | - |   |   |   | - |   |
|    Exercised                        |   |                     | -      |   |   |   | - |   |   |   | 6.71 |   |   |   | (24,000 | ) |   |   | 8.08 |   |   |   | (70,000 | ) |
|    Forfeited                        |   |                     | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 15.23 |   |   |   | (2,000 | ) |
|    Outstanding at year-end          |   | $                        | 13.77  |   |   |   | 105,500 |   |   | $ | 14.01 |   |   |   | 85,500 |   |   | $ | 12.43 |   |   |   | 104,500 |   |
| Options exercisable at year-end                    |   | $                        | 14.10  |   |   |   | 80,500 |   |   | $ | 14.08 |   |   |   | 75,500 |   |   | $ | 11.88 |   |   |   | 86,800 |   |

|                                                                |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                |   |   |   |   |   |   |   |   |   |
| Assumptions:                                                        |   |   |   |   |   |   |   |   |   |
|    Expected dividend yield                           |   |   | 3.76   | %      |   |   | 3.95   | %      |   |   | - |   |
|    Expected volatility                               |   |   | 18.08  | %      |   |   | 17.85  | %      |   |   | - |   |
|    Risk-free interest rate                           |   |   | 3.70   | %      |   |   | 3.68   | %      |   |   | - |   |
|    Weighted-average expected life                    |   |   | 10.0   |   |   |   | 10.0   |   |   |   | - |   |
|    Weighted-average fair value of                    |   |   |   |   |   |   |   |   |   |   |   |   |
|       options granted during the year |   | $      | 1.95   |   |   | $      | 1.73   |   |   |   | - |   |

|           |              | Options Outstanding                     | Options Exercisable          |
|----------------|-------------------|-----------------------------------------|------------------------------|
| Exercise Price | NumberOutstanding | WeightedAverageRemainingContractualLife | WeightedAverageExercisePrice | NumberExercisable | WeightedAverageExercise Price |
| $6.7500        | 10,000            | 6.6 mo.                                 | $6.7500                      | 10,000 | $6.7500 |
| 15.2300        | 50,500            | 46.6 mo.                                | 15.2300                      | 50,500 | 15.2300 |
| 15.3000        | 15,000            | 51.6 mo.                                | 15.3000                      | 15,000 | 15.3000 |
| 14.2600        | 5,000             | 62.5 mo.                                | 14.2600                      | 4,000 | 14.2600 |
| 12.1500        | 5,000             | 100.7 mo.                               | 12.1500                      | 1,000 | 12.1500 |
| 12.7500        | 20,000            | 114.6 mo.                               | 12.7500                      | - | - |

|                                                                |   | 2010        | 2009        |
|---------------------------------------------------------------------|--------|-------------|-------------|
| Deferred tax assets:                                                |   |        |        |
|    Provision for losses on loans                     |   | $ 2,139,472 | $ 1,671,156 |
|    Accrued compensation and benefits                 |   | 149,666     | 125,617     |
|    Other-than-temporary impairment on available      |   |        |        |
|         for sale securities |   | 261,405     | 261,405     |
|    NOL carry forwards acquired                       |   | 187,706     | -           |
|    Unrealized loss on other real estate              |   | 89,570      | -           |
|    Other                                             |   | 70,570      | -           |
| Total deferred tax assets                                           |   | 2,898,389   | 2,058,178   |
|                                                                |   |        |        |
|                                                                |   |        |        |
| Deferred tax liabilities:                                           |   |        |        |
|    FHLB stock dividends                              |   | 188,612     | 188,612     |
|    Purchase accounting adjustments                   |   | 49,045      | 55,664      |
|    Depreciation                                      |   | 375,894     | 271,362     |
|    Prepaid expenses                                  |   | 126,217     | 125,361     |
|    Unrealized gain on available for sale securities  |   | 338,678     | 62,770      |
|    Other                                             |   | -           | 36,209      |
| Total deferred tax liabilities                                      |   | 1,078,446   | 739,978     |
| NET DEFERRED TAX ASSET                                              |   | $ 1,819,943 | $ 1,318,200 |

|                                                                       |   | Year Ended June 30 |
|----------------------------------------------------------------------------|--------|--------------------|
|                                                                       |   | 2010               |   | 2009 |   | 2008 |
| Tax at statutory rate                                                      |   | $2,032,389         |   | $1,806,276 |   | $1,832,016 |
| Increase (reduction) in taxes                                              |   |               |   |   |   |   |
|    resulting from:                                          |   |               |   |   |   |   |
|       Nontaxable municipal income            |   | (327,299)          |   | (217,004) |   | (56,886) |
|       State tax, net of Federal benefit      |   | 104,354            |   | 181,500 |   | 74,951 |
|       Cash surrender value of bank           |   |               |   |   |   |   |
|          owned life insurance |   | (92,845)           |   | (93,172) |   | (99,026) |
|      Tax benefits realized on acquisition         |   | (258,000)          |   | - |   | - |
|      Federal tax credits                          |   | (239,703)          |   | - |   | - |
|      Acquisition costs                            |   | 51,594             |   | - |   | - |
|      Other, net                                   |   | 90,495             |   | 33,900 |   | 23,748 |
| ACTUAL PROVISION                                                           |   | $1,360,985         |   | $1,711,500 |   | $1,774,803 |

|                                                                                                                                                                                                                                             |   | Year Ended June 30 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|
|                                                                                                                                                                                                                                             |   | 2010               |   | 2009 |   | 2008 |
| Unrealized gains (losses) on available for sale securities:                                                                                                                                                                                      |   |               |   |   |   |   |
|     Unrealized holding gains (losses) arising during period                                                                                                                                                                  |   | $743,719           |   | $1,206,610 |   | $(434,981) |
|     Unrealized gains (losses) on available-for-sale securities for      which a portion of an other-than-temporary impairment      has been recognized in income |   | 1,896              |   | (42,162) |   | - |
|     Less: realized gains included in net income                                                                                                                                                                              |   | -                  |   | - |   | (6,084) |
|     Total unrealized gains (losses) on securities                                                                                                                                                                            |   | $745,615           |   | $1,164,448 |   | $(441,065) |
|     Defined benefit pension plan net (loss) gain                                                                                                                                                                             |   | 2,218              |   | (22,416) |   | 31,495 |
|     Income tax (expense) benefit                                                                                                                                                                                             |   | (275,878)          |   | (430,845) |   | 163,194 |
| Other comprehensive income (loss)                                                                                                                                                                                                                |   | $471,955           |   | $711,187 |   | $(246,376) |

|                                                                                                                                                                                                   |   | June 30    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|
|                                                                                                                                                                                                   |   | 2010       |   | 2009 |
|                                                                                                                                                                                                   |   |       |   |   |
| Net unrealized gain (loss) on securities available-for-sale                                                                                                                                            |   | $1,033,466 |   | $289,717 |
| Net unrealized gain (loss) on securities available-for-sale   securities for which a portion of an other-than-temporary    impairment has been recognized in income |   | (118,121)  |   | (120,017) |
| Unrealized gain from defined benefit pension plan                                                                                                                                                      |   | 11,297     |   | 9,079 |
|                                                                                                                                                                                                   |   | 926,642    |   |    178,779 |
| Tax effect                                                                                                                                                                                             |   | (338,678)  |   | (62,770) |
| Net of tax amount                                                                                                                                                                                      |   | $587,964   |   | $116,009 |

| NOTE 12:  Stockholders’ Equity and Regulatory CapitalThe Bank is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital and Tier I capital (as defined in the regulations) to |   | risk-weighted assets (as defined) and of Tier I capital (as defined) to average total assets (as defined). Management believes, as of June 30, 2010, that the Bank meets all capital adequacy requirements to which it is subject.As of June 30, 2010, the most recent notification from the Federal Reserve categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category. The Company’s only significant activity is ownership of the Bank, and, therefore, its capital, capital ratios, and minimum required levels of capital are materially the same as the Bank’s.The following table summarizes the Bank’s actual and required regulatory capital:  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| dollars in thousands)                           | Actual   | For CapitalAdequacy Purposes | To Be WellCapitalized UnderPrompt CorrectiveAction Provisions |
|------------------------------------------------------|----------|------------------------------|---------------------------------------------------------------|
| As of June 30, 2010                                  | Amount   | Ratio                        | Amount                                                        |  Ratio | Amount | Ratio |
|   Total Capital (to Risk-Weighted Assets)  | $ 50,474 | 12.50%                       | $ 32,305                                                      | >8.00% | $ 40,382 | >10.00% |
|   Tier I Capital (to Risk-Weighted Assets) | 45,423   | 11.25%                       | 16,153                                                        | >4.00% | 24,229 | >6.00% |
|   Tier I Capital (to Average Assets)       | 45,423   | 8.36%                        | 21,742                                                        | >4.00% | 27,178 | >5.00% |
|                                                 |     |                         |                                                          |   |   |   |
| As of June 30, 2009                                  |     |                         |                                                          |   |   |   |
|   Total Capital (to Risk-Weighted Assets)  | $ 44,699 | 12.98%                       | $ 27,557                                                      | >8.00% | $ 34,446 | >10.00% |
|   Tier I Capital (to Risk-Weighted Assets) | 40,388   | 11.72%                       | 13,779                                                        | >4.00% | 20,668 | >6.00% |
|   Tier I Capital (to Average Assets)       | 40,388   | 8.87%                        | 18,215                                                        | >4.00% | 22,769 | >5.00% |

| NOTE 13:  Capital Purchase Program Implemented by the U.S. TreasuryIn December 2008, the Company received $9.6 million from the U.S. Treasury through the sale of 9,550 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, as part of the Treasury’s Capital Purchase Program.  The Company also issued to the U.S. Treasury a warrant to purchase 114,326 shares of common stock at $12.53 per share.  The amount of preferred shares sold represented approximately 3% of the Company’s risk-weighted assets as of September 30, 2008.      The transaction was part of the Treasury’s program to infuse capital into the nation’s healthiest and strongest banks for the purpose of stabilizing the US financial system and promoting economic activity.  The Company elected to |   | participate in the program given the uncertain economic outlook, the relatively attractive cost of capital compared to the current market, and the strategic opportunities the Company foresees regarding potential uses of the capital.  The additional capital increased the Company’s already well-capitalized position.  The Company used the proceeds of the issue for working capital and investment in its banking subsidiary.The preferred shares pay a cumulative dividend of 5% per year for the first five years and 9% per year thereafter.  The preferred shares are callable at 100% of the issue price, subject to the approval of the Company’s federal regulator.    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| NOTE 14:  Commitments and Credit RiskStandby Letters of Credit. In the normal course of business, the Company issues various financial standby, performance standby, and commercial letters of credit for its customers. As consideration for the letters of credit, the institution charges letter of credit fees based on the face amount of the letters and the creditworthiness of the counterparties. These letters of credit are stand-alone agreements, and are unrelated to any obligation the depositor has to the Company.Standby letters of credit are irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers.The Company had total outstanding standby letters of credit amounting to $920,000 at June 30, 2010, and $1.1 million at June 30, 2009, with terms ranging from 12 to 24 months. At June 30, 2010, the Company’s deferred revenue under standby letters of credit agreements was nominal.Off-balance-sheet and Credit Risk. The Company’s Consolidated Financial Statements do not reflect various financial instruments to extend credit to meet the financing needs of its customers.These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. Lines of credit are agreements to lend to a customer as long as there is no violation |   | of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments.The Company had $68.6 million in commitments to extend credit at June 30, 2010 and $64.2 million at June 30, 2009.At June 30, 2010, total commitments to originate fixed-rate loans with terms in excess of one year were $3.9 million at rates ranging from 3.75% to 10.00%, with a weighted-average rate of 5.92%. Commitments to extend credit and standby letters of credit include exposure to some credit loss in the event of nonperformance of the customer. The Company’s policies for credit commitments and financial guarantees are the same as those for extension of credit that are recorded in the balance sheet. The commitments extend over varying periods of time with the majority being disbursed within a thirty-day period.The Company grants collateralized commercial, real estate, and consumer loans to customers in Southeast Missouri. Although the Company has a diversified portfolio, loans aggregating $158,494,000 at June 30, 2010, are secured by single and multi-family residential real estate in the Company’s primary lending area.  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                            | Year Ended June 30     |
|---------------------------------------------------------------------------------|------------------------|
|                                                                            | 2010                   | 2009 | 2008 |
|                                                                            |                   |   |   |
| Net income                                                                      | $  4,625,588 | $3,835,077 | $3,613,480 |
| Less: Effective dividend on preferred shares                                    | 510,006                | 288,841 | - |
| Net income available to common stockholders                                     | $  4,115,582      | $3,546,236 | $3,613,480 |
|                                                                            |                   |   |   |
|    Denominator for basic earnings per share -                    |                   |   |   |
|       Weighted-average shares outstanding         | 2,083,458              | 2,123,144 | 2,199,928 |
|       Effect of dilutive securities stock options | 21,834                 | 1,225 | 12,204 |
|    Denominator for diluted earnings per share                    | 2,105,292              | 2,124,369 | 2,212,132 |
|                                                                            |                   |   |   |
| Basic earnings per share available to common stockholders                       | $1.98                  | $1.67 | $1.64 |
| Diluted earnings per share available to common stockholders                     | $1.95                  | $1.67 | $1.63 |

----

| NOTE 16:  Fair Value MeasurementsASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The standard describes three levels of inputs that may be used to measure fair value:  Level 1.   Quoted prices in active markets for identical assets or liabilities Level 2.   Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3.   Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in |   | the accompanying balance sheet, as well as the general classification of such instruments pursuant to the valuation hierarchy. Available-for-sale Securities.  Available-for-sale securities are recorded at fair value on a recurring basis. Available-for-sale securities is the only balance sheet category our Company is required, in accordance with accounting principles generally accepted in the United States of America (US GAAP), to carry at fair value on a recurring basis. When quoted markets are available in an active market, securities are classified within Level 1.  Level 1 securities include exchange-traded equities.  If quoted market prices are not available, then fair values are estimated using pricing models or quoted prices of securities with similar characteristics. For these securities, our Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Level 2 securities include U.S. Government sponsored enterprises, state and political subdivisions, other securities and mortgage-backed GSE residential securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| :                                            | Fair Value Measurements at June 30, 2010, Using:                               |
|----------------------------------------------|--------------------------------------------------------------------------------|
|                                         | Fair Value                                                                     | Quoted Prices inActive Markets forIdentical Assets(Level 1) | Significant OtherObservable Inputs(Level 2) | SignificantUnobservable Inputs(Level 3) |
|                                    |                                                                      |    |    |    |
| U.S. government sponsored enterprises (GSEs) | $            12,413,977 | $               - | $               12,413,977 | $               - |
| State and political subdivisions             | 19,769,116                                                                     | - | 19,769,116 | - |
| Other securities                             | 441,868                                                                        | - | 441,868 | - |
| FHLMC preferred stock                        | 6,000                                                                          | 6,000 | - | - |
| Mortgage-backed GSE residential              | 34,334,451                                                                     | - | 34,334,451 | - |

|                                         | Fair Value Measurements at June 30, 2009, Using:      |
|----------------------------------------------|-------------------------------------------------------|
|                                         | Fair Value                                            | Quoted Prices inActive Markets forIdentical Assets(Level 1) | Significant OtherObservable Inputs(Level 2) | SignificantUnobservable Inputs(Level 3) |
|                                    |                                             |    |    |    |
| U.S. government sponsored enterprises (GSEs) | $        3,278,708 | $               - | $                3,278,708 | $               - |
| State and political subdivisions             | 13,622,695                                            | - | 13,622,695 | - |
| Other securities                             | 2,999,656                                             | - | 2,999,656 | - |
| FHLMC preferred stock                        | 7,920                                                 | 7,920 | - | - |
| Mortgage-backed GSE residential              | 40,269,013                                            | - | 40,269,013 | - |

| The following is a description of valuation methodologies used for financial assets measured at fair value on a nonrecurring basis at June 30, 2010.        Impaired Loans (Collateral Dependent).  A collateral dependent loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms.  Generally, when a collateral dependent loan is considered impaired, the amount of reserve required is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material collateral dependent loans deemed impaired using the fair value of the collateral for collateral dependent loans. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. In addition, management may apply selling and other discounts to the underlying collateral value to determine the fair value. If an appraised value is not available, the fair value of the collateral dependent impaired loan is determined by an adjusted appraised value including unobservable cash flows.  The Company records collateral dependent impaired loans as Nonrecur- |   | ring Level 3. If a collateral dependent loan’s fair value, as estimated by the Company, is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a specific reserve as part of the allowance for loan losses. Foreclosed and Repossessed Assets Held for Sale.  Foreclosed and repossessed assets held for sale are valued at the time the loan is foreclosed upon or collateral is repossessed and the asset is transferred to foreclosed or repossessed assets held for sale. The value of the asset is based on third party or internal appraisals, less estimated costs to sell and appropriate discounts, if any. The appraisals are generally discounted based on current and expected market conditions that may impact the sale or value of the asset and management’s knowledge and experience with similar assets. Such discounts typically may be significant and result in a Level 3 classification of the inputs for determining fair value of these assets. Foreclosed and repossessed assets held for sale are continually evaluated for additional impairment and are adjusted accordingly if impairment is identified. The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis during the period and the level within the ASC 820 fair value hierarchy in which the fair value measurements fell at June 30, 2010:  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            | Fair Value Measurements at June 30, 2010, Using:                        |
|-------------------------------------------------|-------------------------------------------------------------------------|
|                                            | Fair Value                                                              | Quoted Prices inActive Markets forIdentical Assets(Level 1) | Significant OtherObservable Inputs(Level 2) | SignificantUnobservable Inputs(Level 3) |
|                                       |                                                               |    |    |    |
| Impaired loans                                  | $           2,317,007 | $                          - | $                          - | $               2,317,007 |
| Foreclosed and repossessed assets held for sale | 1,501,182                                                               | - | - | 1,501,182 |

| ASC 825, formerly Statement of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments,” requires all entities to disclose the estimated fair value of their financial instrument assets and liabilities.  For the Company, as for most financial institutions, the majority of its assets and liabilities are considered financial instruments as defined in ASC 825.  Many of the Company’s financial instruments, however, lack an available trading market as characterized by a willing buyer and willing seller engaging in an exchange transaction.  It is also the Company’s general practice and intent to hold its financial instruments to maturity and to not engage in trading or sales activities except for loans held-for-sale and available-for-sale securities.  Therefore, significant estimations and assumptions, as well as present value calculations, were used by the Company for the purposes of this disclosure.  |   | Estimated fair values have been determined by the Company using the best available data and an estimation methodology suitable for each category of financial instruments.  For those loans and deposits with floating interest rates, it is presumed that estimated fair values generally approximate the recorded book balances. The estimated methodologies used, the estimated fair values, and the recorded book balances at June 30, 2010 and 2009, were as follows:  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                           |   | 2010           |    |   | 2009           |   |
|--------------------------------------------------------------------------------|--------|----------------|---------|--------|----------------|--------|
|                                                                           |   | CarryingAmount |    |   | FairValue      |   |   | CarryingAmount |   |   | FairValue |   |
|                                                                           |   | (in thousands) |    |   | (in thousands) |   |
| Financial Assets                                                               |   |           |    |   |           |   |   |   |   |   |   |   |
|       Cash and cash equivalents                  |   | $              | 33,383  |   |           | $      | 33,383 |   |   | $ | 8,074 |   |   | $ | 8,074 |   |
|       Interest-bearing time deposits             |   |           | 1,089   |   |           |   | 1,089 |   |   |   | - |   |   |   | - |   |
|       Investment and mortgage-                   |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|          backed securities        |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|          available for sale       |   |           | 66,965  |   |           |   | 66,965 |   |   |   | 60,178 |   |   |   | 60,178 |   |
|       Stock in FHLB                              |   |           | 2,622   |   |           |   | 2,622 |   |   |   | 4,592 |   |   |   | 4,592 |   |
|       Stock in Federal Reserve Bank              |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|          of St. Louis             |   |           | 583     |   |           |   | 583 |   |   |   | - |   |   |   | - |   |
|       Loans receivable, net                      |   |           | 418,683 |   |           |   | 419,917 |   |   |   | 368,556 |   |   |   | 374,328 |   |
|       Accrued interest receivable                |   |           | 3,043   |   |           |   | 3,043 |   |   |   | 2,650 |   |   |   | 2,650 |   |
| Financial Liabilities                                                          |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|       Deposits                                   |   |           | 422,893 |   |           |   | 426,738 |   |   |   | 311,955 |   |   |   | 313,059 |   |
|       Securities sold under                      |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|          agreements to repurchase |   |           | 30,369  |   |           |   | 30,369 |   |   |   | 23,748 |   |   |   | 23,748 |   |
|       Advances from FHLB                         |   |           | 43,500  |   |           |   | 47,010 |   |   |   | 78,750 |   |   |   | 82,510 |   |
|       Accrued interest payable                   |   |           | 857     |   |           |   | 857 |   |   |   | 989 |   |   |   | 989 |   |
|       Subordinated Debt                          |   |           | 7,217   |   |           |   | 3,001 |   |   |   | 7,217 |   |   |   | 7,217 |   |
| Unrecognized financial instruments                                             |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|    (net of contract amount)                                     |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|       Commitments to originate loans             |   |           | -       |   |           |   | - |   |   |   | - |   |   |   | - |   |
|       Letters of Credit                          |   |           | -       |   |           |   | - |   |   |   | - |   |   |   | - |   |
|       Lines of Credit                            |   |           | -       |   |           |   | - |   |   |   | - |   |   |   | - |   |

| The following methods and assumptions were used in estimating the fair values of financial instruments:Cash and cash equivalents and interest-bearing time deposits are valued at their carrying amounts which approximates fair value.Stock in FHLB and the Federal Reserve Bank of St. Louis is valued at cost which approximates fair value.Fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics are aggregated for purposes of the calculations.The carrying amounts of accrued interest approximate their fair values.Deposits with no defined maturities, such as NOW accounts, savings accounts and money market deposit accounts, are valued at their carrying amount which approximates fair value.The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.The carrying amounts of securities sold under agreements to repurchase approximate fair value.  |   | Fair value of advances from the FHLB is estimated by discounting maturities using an estimate of the current market for similar instruments.The fair value of subordinated debt is estimated using rates currently available to the Company for debt with similar terms and maturities.The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties.  For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and committed rates.  The fair value of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| NOTE 17:  Significant EstimatesAccounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for loan losses are described in Note 1. Current Economic Conditions.  The current economic environment presents financial institutions with unprecedented circumstances and challenges which in some cases have resulted in large declines in the fair values of investments and other assets, constraints on liquidity and significant credit   |   | quality problems, including severe volatility in the valuation of real estate and other collateral supporting loans. The financial statements have been prepared using values and information currently available to the Company.  Given the volatility of current economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the allowance for loan losses, and capital that could negatively impact the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity.   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | June 30 |       |
|-------------------------------------------------|--------|---------|------------|
| Condensed Balance Sheets                        |   | 2010    |       |   | 2009 |   |
|                                            |   |    |       |   |   |   |
| Assets                                          |   |    |       |   |   |   |
|                                            |   |    |       |   |   |   |
| Cash and cash equivalents                       |   | $       | 4,461,236  |   |   | $ | 1,606,209 |   |
| Premise and equipment                           |   |    | -          |   |   |   | 2,109,667 |   |
| Other assets                                    |   |    | 841,579    |   |   |   | 3,493,480 |   |
| Investment in common stock of Bank              |   |    | 47,614,605 |   |   |   | 42,086,832 |   |
| TOTAL ASSETS                                    |   | $       | 52,917,420 |   |   | $ | 49,296,188 |   |
|                                            |   |    |       |   |   |   |   |   |
| Liabilities and Stockholders’ Equity      |   |    |       |   |   |   |   |   |
|                                            |   |    |       |   |   |   |   |   |
| Accrued expenses and other liabilities          |   | $       | 51,222     |   |   | $ | 70,850 |   |
| Subordinated debt                               |   |    | 7,217,000  |   |   |   | 7,217,000 |   |
| TOTAL LIABILITIES                               |   |    | 7,268,222  |   |   |   | 7,287,850 |   |
|                                            |   |    |       |   |   |   |   |   |
| Stockholders’ equity                      |   |    | 45,649,198 |   |   |   | 42,008,338 |   |
| TOTAL LIABILITIES ANDSTOCKHOLDERS’ EQUITY |   | $       | 52,917,420 |   |   | $ | 49,296,188 |   |

|                                                                                                                                                              |   | Year Ended June 30 |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|
| Condensed Statements of Income                                                                                                                                    |   | 2010               |      |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                              |   |               |      |   |   |   |   |   |   |
| Interest income                                                                                                                                                   |   | $                  | 62,324    |   |   | $ | 37,908 |   |   | $ | 23,843 |   |
| Interest expense                                                                                                                                                  |   |               | 227,020   |   |   |   | 357,387 |   |   |   | 539,017 |   |
|   Net interest income (expense)                                                                                                                         |   |               | (164,696  | ) |   |   | (319,479 | ) |   |   | (515,174 | ) |
| Dividends from Bank                                                                                                                                               |   |               | 2,000,000 |   |   |   | 2,000,000 |   |   |   | 1,600,000 |   |
|                                                                                                                                                              |   |               |      |   |   |   |   |   |   |   |   |   |
| Operating expenses                                                                                                                                                |   |               | 467,661   |   |   |   | 464,801 |   |   |   | 316,897 |   |
|                                                                                                                                                              |   |               |      |   |   |   |   |   |   |   |   |   |
|    Income before income taxes and      equity in undistributed income      of the Bank |   |               | 1,367,643 |   |   |   | 1,215,720 |   |   |   | 767,929 |   |
|                                                                                                                                                              |   |               |      |   |   |   |   |   |   |   |   |   |
| Income tax benefit                                                                                                                                                |   |               | 225,100   |   |   |   | 293,500 |   |   |   | 311,000 |   |
|                                                                                                                                                              |   |               |      |   |   |   |   |   |   |   |   |   |
|    Income before equity in undistributed      income of the Bank                                                     |   |               | 1,592,743 |   |   |   | 1,509,220 |   |   |   | 1,078,929 |   |
|                                                                                                                                                              |   |               |      |   |   |   |   |   |   |   |   |   |
| Equity in undistributed income      of the Bank                                                                                     |   |               | 3,032,845 |   |   |   | 2,325,857 |   |   |   | 2,534,551 |   |
| NET INCOME                                                                                                                                                        |   | $                  | 4,625,588 |   |   | $ | 3,835,077 |   |   | $ | 3,613,480 |   |

|                                                                    |   | Year Ended June 30 |       |
|-------------------------------------------------------------------------|--------|--------------------|------------|
| Condensed Statements of Cash Flow                                       |   | 2010               |       |   | 2009 |   |   | 2008 |   |
| Cash flows from operating activities:                                   |   |               |       |   |   |   |   |   |   |
|    Net income                                            |   | $                  | 4,625,588  |   |   | $ | 3,835,077 |   |   | $ | 3,613,480 |   |
|    Changes in:                                           |   |               |       |   |   |   |   |   |   |   |   |   |
|       Equity in undistributed income      |   |               |       |   |   |   |   |   |   |   |   |   |
|           of the Bank |   |               | (3,032,845 | ) |   |   | (2,325,857 | ) |   |   | (2,534,551 | ) |
|       Other adjustments, net              |   |               | 258,960    |   |   |   | (459,564 | ) |   |   | (18,919 | ) |
| NET CASH PROVIDED BYOPERATING ACTIVITIES                                |   |               | 1,851,703  |   |   |   | 1,049,656 |   |   |   | 1,060,010 |   |
|                                                                    |   |               |       |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                   |   |               |       |   |   |   |   |   |   |   |   |   |
|    Investment in loan participations                     |   |               | (284,011   | ) |   |   | - |   |   |   | - |   |
|    Purchase of available for sale securities             |   |               | -          |   |   |   | (2,750,000 | ) |   |   | - |   |
|    Investment in real estate                             |   |               | -          |   |   |   | - |   |   |   | (30,009 | ) |
|    Proceeds from sale of real estate                     |   |               | 2,016,991  |   |   |   | - |   |   |   | - |   |
|    Proceeds from maturities of                           |   |               |       |   |   |   |   |   |   |   |   |   |
|       available-for-sale securities       |   |               | 2,750,000  |   |   |   | - |   |   |   | 161,025 |   |
|    Investment in Bank subsidiary                         |   |               | (2,000,000 | ) |   |   | (5,000,000 | ) |   |   | - |   |
| NET CASH PROVIDED BY OR (USED IN)INVESTING ACTIVITIES                   |   |               | 2,482,980  |   |   |   | (7,750,000 | ) |   |   | 131,016 |   |
|                                                                    |   |               |       |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                   |   |               |       |   |   |   |   |   |   |   |   |   |
|    Proceeds from issuance                                |   |               |       |   |   |   |   |   |   |   |   |   |
|       of preferred stock                  |   |               | -          |   |   |   | 9,511,129 |   |   |   | - |   |
|    Dividends on preferred stock                          |   |               | (477,500   | ) |   |   | (212,222 | ) |   |   | - |   |
|    Dividends on common stock                             |   |               | (1,002,156 | ) |   |   | (1,024,172 | ) |   |   | (884,115 | ) |
|    Exercise of stock options                             |   |               | -          |   |   |   | 161,069 |   |   |   | 565,625 |   |
|    Payments to acquire treasury stock                    |   |               | -          |   |   |   | (1,507,825 | ) |   |   | (1,364,279 | ) |
|                                                                    |   |               |       |   |   |   |   |   |   |   |   |   |
| NET CASH PROVIDED BY OR (USED IN)FINANCING ACTIVITIES                   |   |               | (1,479,656 | ) |   |   | 6,927,979 |   |   |   | (1,682,769 | ) |
|                                                                    |   |               |       |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and                                     |   |               |       |   |   |   |   |   |   |   |   |   |
|    cash equivalents                                      |   |               | 2,855,027  |   |   |   | 227,635 |   |   |   | (491,743 | ) |
| Cash and cash equivalents at beginning                                  |   |               |       |   |   |   |   |   |   |   |   |   |
|    of year                                               |   |               | 1,606,209  |   |   |   | 1,378,574 |   |   |   | 1,870,317 |   |
| CASH AND CASH EQUIVALENTSAT END OF YEAR                                 |   | $                  | 4,461,236  |   |   | $ | 1,606,209 |   |   | $ | 1,378,574 |   |
|                                                                    |   |               |       |   |   |   |   |   |   |   |   |   |

|                       |   | June 30, 2010 |   |
|----------------------------|--------|---------------|--------|
|                       |   | FirstQuarter  |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |
| Interest income            |   | $             | 6,896  |   |   | $ | 6,894 |   |   | $ | 6,805 |   |   | $ | 6,947 |   |
| Interest expense           |   |          | 2,824  |   |   |   | 2,849 |   |   |   | 2,797 |   |   |   | 2,755 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income        |   |          | 4,072  |   |   |   | 4,045 |   |   |   | 4,008 |   |   |   | 4,192 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses  |   |          | 210    |   |   |   | 310 |   |   |   | 160 |   |   |   | 245 |   |
| Noninterest income         |   |          | 704    |   |   |   | 791 |   |   |   | 713 |   |   |   | 886 |   |
| Noninterest expense        |   |          | 3,183  |   |   |   | 2,935 |   |   |   | 3,239 |   |   |   | 3,142 |   |
| Income before income taxes |   |          | 1,383  |   |   |   | 1,591 |   |   |   | 1,322 |   |   |   | 1,691 |   |
| Income tax expense         |   |          | 193    |   |   |   | 428 |   |   |   | 245 |   |   |   | 495 |   |
| NET INCOME                 |   | $             | 1,190  |   |   | $ | 1,163 |   |   | $ | 1,077 |   |   | $ | 1,196 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   | June 30, 2009 |   |
|                       |   | FirstQuarter  |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income            |   | $             | 6,342  |   |   | $ | 6,304 |   |   | $ | 6,290 |   |   | $ | 6,365 |   |
| Interest expense           |   |          | 2,889  |   |   |   | 2,846 |   |   |   | 2,714 |   |   |   | 2,755 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income        |   |          | 3,453  |   |   |   | 3,458 |   |   |   | 3,576 |   |   |   | 3,610 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses  |   |          | 400    |   |   |   | 200 |   |   |   | 410 |   |   |   | 141 |   |
| Noninterest income         |   |          | 336    |   |   |   | 240 |   |   |   | 582 |   |   |   | 662 |   |
| Noninterest expense        |   |          | 2,037  |   |   |   | 2,206 |   |   |   | 2,341 |   |   |   | 2,635 |   |
| Income before income taxes |   |          | 1,352  |   |   |   | 1,292 |   |   |   | 1,407 |   |   |   | 1,496 |   |
| Income tax expense         |   |          | 425    |   |   |   | 404 |   |   |   | 423 |   |   |   | 460 |   |
| NET INCOME                 |   | $             | 927    |   |   | $ | 888 |   |   | $ | 984 |   |   | $ | 1,036 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   | June 30, 2008 |   |
|                       |   | FirstQuarter  |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income            |   | $             | 6,333  |   |   | $ | 6,377 |   |   | $ | 6,386 |   |   | $ | 6,231 |   |
| Interest expense           |   |          | 3,701  |   |   |   | 3,606 |   |   |   | 3,310 |   |   |   | 2,930 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income        |   |          | 2,632  |   |   |   | 2,771 |   |   |   | 3,076 |   |   |   | 3,301 |   |
|                       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses  |   |          | 110    |   |   |   | 90 |   |   |   | 350 |   |   |   | 173 |   |
| Noninterest income         |   |          | 590    |   |   |   | 602 |   |   |   | 601 |   |   |   | 621 |   |
| Noninterest expense        |   |          | 1,899  |   |   |   | 1,978 |   |   |   | 1,987 |   |   |   | 2,220 |   |
| Income before income taxes |   |          | 1,213  |   |   |   | 1,305 |   |   |   | 1,340 |   |   |   | 1,529 |   |
| Income tax expense         |   |          | 400    |   |   |   | 432 |   |   |   | 442 |   |   |   | 500 |   |
| NET INCOME                 |   | $             | 813    |   |   | $ | 873 |   |   | $ | 898 |   |   | $ | 1,029 |   |

| CORPORATE HEADQUARTERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM |
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| 531 Vine Street                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | BKD, LLP                                     |
| Poplar Bluff, Missouri 63901                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | St. Louis, Missouri 63102                    |
| COMPANY WEBSITE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | COMMON STOCK                                 |
| www.bankwithsouthern.com                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Nasdaq Stock MarketNasdaq Symbol: SMBC       |
| SPECIAL COUNSEL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                         |
| Silver, Freedman & Taff, LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                         |
| Washington, D.C. 20007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                         |
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| TRANSFER AGENT Stockholders should report lost stock certificates or direct inquiries concerning dividend payments, change of name, address, or ownership, or consolidation of accounts, to the Company’s transfer agent:    Registrar and Transfer Company    10 Commerce Drive    Cranford, New Jersey 07016    (800) 368-5948  ANNUAL MEETING The Annual Meeting of Stockholders will be held Monday, October 18, 2010, at 9:00 a.m., Central Time, at the Greater Poplar Bluff Area Chamber of Commerce Building, 1111 West Pine, Poplar Bluff, Missouri 63901. ANNUAL REPORT ON FORM 10-K AND OTHER REPORTS A copy of the Company’s annual report on Form 10-K, including financial statement schedules and our quarterly reports as filed with the Securities and Exchange Commission, will be furnished without charge to stockholders as of the record date upon written request to the Secretary, Southern Missouri Bancorp, Inc., 531 Vine Street, Poplar Bluff, Missouri 63901. These documents also may be accessed through Southern Bank’s website at www.bankwithsouthern.com, under the Investor Relations tab.  |

|   |  | Standing:  Sammy Schalk, DennisRobison, Rebecca Brooks, CharlesMoffitt, Charles Love, Bonnie Black Seated:Douglas Bagby, Samuel Smith,Greg Steffens |
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| Directors Samuel H. SmithChairman of the Board,Engineer and Majority Owner,S.H. Smith and Company, Inc. L. Douglas BagbyVice-Chairman of the Board,City Manager, City of Poplar Bluff Ronnie D. BlackRetired Executive Director,General Association of General Baptists  |   Sammy A. SchalkPresident,Gamblin Lumber Company Greg A. SteffensPresident and Chief Executive Officer,Southern Missouri Bancorp, Inc. Rebecca M. BrooksFinancial Manager,McLane Transport Charles R. LoveCertified Public Accountant,Kraft, Miles and Tatum  |   Charles R. MoffittAgency Manager,Morse Harwell Jiles Insurance Agency Dennis C. RobisonPresident, Robison Farms, Inc. Leonard W. EhlersDirector Emeritus,Retired Court Reporter,36th Judicial Circuit James W. TatumDirector Emeritus,Retired Certified Public Accountant |
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| Directors L. Douglas BagbyVice-Chairman of the Board,City Manager, City of Poplar Bluff Sammy A. SchalkPresident,Gamblin Lumber Company Samuel H. SmithChairman of the Board,Engineer and Majority Owner,S.H. Smith and Company, Inc. Ronnie D. BlackRetired Executive Director,General Association of General Baptists  |   Greg A. SteffensPresident and Chief Executive Officer,Southern Missouri Bancorp, Inc. Rebecca M. BrooksFinancial Manager,McLane Transport Charles R. LoveCertified Public Accountant,Kraft, Miles and Tatum Charles R. MoffittAgency Manager,Morse Harwell Jiles Insurance Agency Dennis C. RobisonPresident,Robison Farms, Inc.  | Senior Officers Greg A. SteffensPresident andChief Executive Officer Kimberly A. Capps Chief Operations Officer William D. HribovsekChief Lending Officer Matthew T. FunkeChief Financial Officer Lora L. DavesChief of Credit Administration  |
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