TABLE OF CONTENTS



                                                                       Page

Letter to Stockholders                                                   1

Business of the Company and the Bank                                     2

Common Stock                                                             2

Selected Consolidated Financial Condition,
  Operating and Other Data                                              3-4

Management's Discussion and Analysis of Financial
  Condition and Results of Operations                                   5-14

Independent Auditors' Report                                             15

Consolidated Financial Statements:

        Consolidated Statements of Financial Condition
         as of June 30, 2001 and 2000                                    16

        Consolidated Statements of Income for the
         Years Ended June 30, 2001, 2000 and 1999                        17

        Consolidated Statements of Stockholders' Equity
         for the Years Ended June 30, 2001, 2000 and 1999                18

        Consolidated Statements of Cash Flows for the
         Years Ended June 30, 2001, 2000 and 1999                      19-20

Notes to Consolidated Financial Statements                             21-40

Directors and Officers                                                   41

Corporate Information                                                    42



                                        i

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[Logo of Southern Missouri Bancorp, Inc.]            531 Vine Street
                                                     P.O. Box 520
                                                     Poplar Bluff, MO 63902-0520
                                                     573-758-1421
                                                     Fax 573-686-2920


September 10, 2001

To Our Fellow Stockholders:

On behalf of the Board of  Directors,  Management,  and  Associates  of Southern
Missouri Bancorp,  Inc. and its wholly owned subsidiary,  Southern Missouri Bank
and Trust,  we are pleased to present the results of the  Company's  performance
for the year ended June 30, 2001 and  discuss  some of our  strategic  plans and
initiatives for a prosperous and exciting year ahead.

During the past year, our Company started to realize some of the rewards for our
efforts,  initiatives  and changes  undertaken over the last several years. As a
Company,  we  made  significant  strides  on  improving  customer  satisfaction,
enhancing  product lines,  expanding  market share and improving the quality and
expertise of our staff.  Our strategic focus for the year centered on overseeing
the successful  integration of two purchased  full-service  branches  located in
Kennett and Qulin,  Missouri,  the opening of a third  full-service  facility in
Poplar Bluff and the conversion to a new data processing system.

Financially,  fiscal  2001 was an  exciting  year for  Southern  Missouri  as we
completed two branch acquisitions and two branch sales. These transactions aided
our efforts in  expanding  market  share,  improving  operating  efficiency  and
increasing  deposits and  contributed  to the 22.8% increase in our earnings per
share.  As a result of asset  growth,  the  branch  transactions,  and  changing
interest  rates,  the  Company's  net interest  rate spread at June 30, 2001 had
expanded to its highest  level ever.  During  fiscal  2001,  we earned $1.25 per
diluted share as compared to the $1.04 per diluted share earned during the prior
year.

Southern  Missouri  Bancorp's total assets climbed to $240.5 million at June 30,
2001,  which reflected  growth of $56.1 million since the end of our last fiscal
year.  The 30.4%  increase  was the  result of our  acquisition  and  internally
generated  growth,  which was consistent with our strategic plan. We believe our
management  team and product lines will allow us the  opportunity to continue on
this path of growth,  which in turn will allow us to continue  to  leverage  our
capital  base  and  increase  our  financial  returns.  Even  though  we are not
satisfied  with  our  present  financial  returns,   we  are  pleased  with  the
improvements  over prior years and we believe that our  strategic  business plan
will continue to provide  consistent  improvement in our financial  performance.
Progress  has been made,  as  evidenced  by the 14.7%  increase in our return on
average equity to 6.86%.

As we turn our attention toward the future,  we intend to focus on continuing to
generate asset growth through  residential  and  commercial  loan  originations,
expanding our market  presence  through  strategic  acquisitions,  opening a new
full-service  facility in Doniphan,  Missouri,  attracting new deposits  through
enhanced product lines and prudently  managing our  stockholders'  equity. It is
our  pledge to remain  committed  to the  growth  and  performance  goals of the
Company,  which we believe will generate long-term value and opportunity for the
main groups that hold the keys to our success:  our  customers,  our staff,  our
stockholders and our communities.

Thank  you  for  your  investment  in  Southern  Missouri  Bancorp,  and for the
confidence you have placed in our team here at Southern Missouri as we strive to
provide a higher standard of service to both our customers and stockholders.  We
look forward to a prosperous and bright future together.


/s/ Greg A. Steffens

Greg A. Steffens
President
Southern Missouri Bancorp, Inc.


                                       1
<PAGE>



BUSINESS OF THE COMPANY AND THE BANK

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

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

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


COMMON STOCK

The common  stock of the Company is listed on the Nasdaq  Stock Market under the
symbol "SMBC".

The following  table sets forth per share market price and dividend  information
for the Company's common stock. As of August 1, 2001,  there were  approximately
313  stockholders  of  record.  This does not  reflect  the number of persons or
entities who hold stock in nominee or "street name."

      Fiscal 2001             High            Low            Dividend Paid
      -----------             ----            ---            -------------
      First Quarter        $  13.25       $  12.50              $ .125
      Second Quarter          13.625         12.25                .125
      Third Quarter           14.00          13.00                .125
      Fourth Quarter          14.15          13.00                .125

      Fiscal 2000            High            Low            Dividend Paid
      -----------            ----            ---            -------------
      First Quarter        $  14.25      $  12.00               $ .125
      Second Quarter          13.625        10.875                .125
      Third Quarter           13.125        10.875                .125
      Fourth Quarter          13.125        10.594                .125

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


                                        2

<PAGE>


SELECTED CONSOLIDATED FINANCIAL CONDITION,
OPERATING AND OTHER DATA

<TABLE>
<CAPTION>
                                                                           At June 30,
                                                                         (In thousands)

<S>                                     <C>            <C>            <C>             <C>            <C>
FINANCIAL CONDITION DATA:                    2001           2000           1999            1998           1997
------------------------                     ----           ----           ----            ----           ----

Total assets                             $ 240,494       $184,391       $164,972        $155,947       $160,393
Loans receivable, net                      180,857        138,425        118,249         119,083        107,783
Mortgage-backed securities                  26,224         12,957         16,900          14,154         26,236
Cash, interest-bearing deposits
 and investment securities                  19,607         26,425         25,048          18,324         21,638
Deposits                                   173,281        123,920        120,155         109,410        118,705
Borrowings                                  41,115         37,000         20,550          21,069         13,535
Stockholders' equity                        23,582         21,457         22,629          24,112         26,400

</TABLE>

<TABLE>
<CAPTION>


                                                                         Year Ending June 30,
                                                                           (In thousands)

<S>                                      <C>            <C>            <C>             <C>            <C>
OPERATING DATA:                              2001           2000           1999            1998           1997
--------------                               ----           ----           ----            ----           ----

Interest income                          $  16,161       $ 12,290       $ 11,414        $ 11,444       $ 11,408
Interest expense                             9,490          6,919          6,247           6,212          6,318
                                            ------         ------         ------          ------         ------

Net interest income                          6,671          5,371          5,167           5,232          5,090
Provision for loan losses                      510            215            235             783            241
                                            ------         ------         ------          ------         ------

Net interest income after
 provision for loan losses                   6,161          5,156          4,932           4,449          4,849

Noninterest income                           1,447            612          1,255             797            618
Noninterest expense                          5,219          3,758          3,682           3,660          3,972
                                            ------         ------         ------          ------         ------

Income before income taxes                   2,389          2,010          2,505           1,586          1,495
Income tax expense                             840            690            860             522            440
                                            ------         ------         ------          ------         ------

Net income                               $   1,549       $  1,320       $  1,645        $  1,064       $  1,055
                                            ======         ======         ======          ======         ======



Basic earnings per common share          $  1.26            1.03           1.23             .69            .68
Diluted earnings per common share           1.25            1.02           1.20             .67            .67
Dividends per share                          .50             .50            .50             .50            .50

</TABLE>


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<PAGE>



                                                   At June 30,
OTHER DATA:                          2001    2000   1999    1998    1997
----------                           ----    ----   ----    ----    ----

Number of:
  Real estate loans                 2,910   2,811   2,920   3,035   3,040
  Deposit accounts                 15,630  12,887  13,189  12,762  12,542
  Full service offices                  8       8       8       8       8


KEY OPERATING RATIOS:                  At or For the Year Ended June 30,
--------------------                 ------------------------------------
                                     2001    2000     1999    1998    1997
                                     ----    ----     ----    ----    ----
Return on assets (net income
 divided by average assets)           .71%    .77%    1.02%    .67%    .65%

Return on average equity (net
 income divided by average equity)   6.86    5.98     7.30    4.06    4.09

Average equity to average assets    10.29   12.84    14.01   16.40   16.01

Interest rate spread (spread
 between weighted average rateon
 all interest-earning assets and
 all interest- bearing liabilities)  2.92    2.69     2.76    2.67    2.51

Net interest margin (net interest
 income as a percentage of average
 interest-earning assets)            3.22    3.22     3.32    3.39    3.25

Noninterest expense to
 average assets                      2.38    2.16     2.29    2.29    2.46

Average interest-earning assets to
 interest-bearing liabilities      106.61  112.78   114.15  117.76  118.32

Allowance for loan losses to total
 loans at end of period               .79      .91     .99    1.07     .64

Allowance for loan losses to
 nonperforming loans               299.08   237.79  658.09  243.01   51.19

Net charge offs to average out-
 standing loans during the period     .35      .10     .29     .17     .16

Ratio of nonperforming assets
 to total assets                      .69       .59    .64     .98     .89

Dividend payout ratio               39.72     48.53  39.95   72.29   73.06




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<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

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

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

FORWARD-LOOKING STATEMENTS

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

FINANCIAL CONDITION

The Company's financial condition changed  significantly during fiscal 2001, due
to the acquisition of two full-service banking facilities located in Kennett and
Qulin,  Missouri,  internally generated loan growth, a change in the composition
and  amount of  deposits  and the  Company's  sale of two  full-service  banking
facilities located in Malden and Ellington,  Missouri.  In the acquisition,  the
Company  assumed  $44.7  million in deposits,  received  $14.0  million in cash,
acquired $25.3 million in loans,  assumed $1.6 million in premises and equipment
and recorded $3.8 million in goodwill. In addition,  the acquisition resulted in
the  consolidation  of the Company's former banking facility in Kennett into the
acquired  facility and the  repayment of $7.0 million in FHLB  advances.  In the
sale, the Company transferred $13.2 million in deposits along with loans of $8.5
million  and cash of $4.2  million,  resulting  in a pretax  gain on the sale of
$634,000.

Southern  Missouri's total assets  increased $56.1 million,  or 30.4%, to $240.5
million at June 30, 2001,  as compared to $184.4  million at June 30, 2000.  The
growth was primarily due to a $42.4  million  increase in loans,  of which $27.2
million was generated internally, a $6.2 million increase in cash balances and a
$6.1 million increase in goodwill and premises and equipment.  The growth in the
loan  portfolio  approximated  growth  targets and was  comprised  of  increased

                                       5
<PAGE>

balances  in  loans  secured  by  residential  real  estate  of  $15.2  million,
commercial  business  of $14.9  million  and  commercial  real  estate  of $13.3
million.

Allowance for loan losses increased $185,000,  to $1.5 million at June 30, 2001,
from $1.3 million at June 30, 2000.  The  allowance  for loan losses at June 30,
2001 represented 0.8% of loans receivable and 299.1% of nonperforming  loans, as
compared  to  respective  balances  of 0.9% and  237.8%  at June 30,  2000  (see
Provision for Loan Losses).

Premises and equipment increased $2.5 million, to $5.1 million at June 30, 2001,
from  $2.5  million  at  June  30,  2000  due  to  the   aforementioned   branch
acquisitions, the opening of another branch office in Poplar Bluff, and upgrades
in data processing and information technology systems capabilities.

Total deposits increased $49.4 million,  or 39.8%, to $173.3 million at June 30,
2001 as compared to $123.9  million at June 30, 2000. The increase was primarily
due to the branch  purchase and $17.8  million in internally  generated  deposit
growth, partially offset by the branch sales. These changes and the introduction
of a  high-yield  savings  account  contributed  to  significant  changes in the
composition of deposits,  as transaction and savings accounts increased to $92.7
million at June 30, 2001 as compared to $33.9 million at June 30, 2000. The cost
of interest bearing deposits  declined to 4.08% at June 30, 2001, as compared to
4.79% at June  30,  2000,  due in part to the  decline  in  interest  rates  and
increased balances in transaction and savings accounts.

In January  2001,  Southern  Missouri  introduced  a new  savings  account,  the
money-market  passbook  account  ("MMPA") in order to attract new  deposits  and
generate  a more  stable  source of funds  that was less  price  sensitive  than
certificates  of  deposit  ("CD").   The  MMPA  was  originally  offered  at  an
above-market  interest  rate that was  guaranteed  until  June 1, 2001 and has a
minimum  deposit  requirement  of  $10,000.  The MMPA was  designed  to give the
customer a yield  similar to those  available  from 6 to  12-month  CD's,  while
allowing the depositor  immediate  access to their funds.  At June 30, 2001, the
MMPA had attracted  $39.6 million in deposits and was priced similar to the cost
of a 1-year CD.

RESULTS OF OPERATIONS

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

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

COMPARISON OF THE YEARS ENDED JUNE 30, 2001 AND 2000

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

Net Interest Income.  Net interest income  increased $1.3 million,  or 24.2%, to
$6.7  million  for fiscal  2001 when  compared  to the prior  fiscal  year.  The
increase  was  primarily  due to the 23  basis  point  increase  in the  average
interest  rate  spread  between  interest-earning  assets  and  interest-bearing
liabilities,  and the $40.2 million increase in average interest-earning assets,
partially  offset  by a  $46.3  million  increase  in  average  interest-earning
liabilities and a 6% decline in the ratio of interest earning assets to interest
bearing  liabilities  from 113% to 107%. The decline was primarily the result of
the  acquisition,  which  included the  addition of  goodwill,  and premises and
equipment,  which are non-earning assets.

                                       6
<PAGE>

Interest  Income.  Interest  income for fiscal 2001 increased  $3.9 million,  up
31.5% to $16.2  million from the $12.3  million  earned  during the prior fiscal
year. The increase was mostly attributed to a $40.2 million or 24.1% increase in
average  interest-earning  assets as well as a 44 basis  point  increase  in the
average  yield earned on these  assets,  to 7.81% from 7.37%.  A general rise in
average  interest  rates  and an  increased  concentration  of  higher  yielding
commercial loans contributed to the increase.

Interest  Expense.  Interest  expense for fiscal 2001  increased $2.6 million or
37.2% to $9.5  million  from $6.9  million  during the prior  fiscal  year.  The
increase  was  largely  due to a $46.3  million,  or 31.3%  increase  in average
interest-bearing  liabilities  and a 21 basis point increase in the average cost
of these liabilities, to 4.89%, from 4.68%.

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

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

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  historical
charge-off history and an analysis of the allowance for loan losses.  Management
also  considered  the  continued  origination  of loans  secured  by  commercial
businesses  and  commercial  real estate.  Such loans bear an inherently  higher
level of credit risk than one- to  four-family  residential  real estate  loans.
While management  believes the allowance for losses at June 30, 2001 is adequate
to cover all losses  inherent in the portfolio,  there can be no assurance that,
in the future,  the Bank's  regulators will not require further increases in the
allowance or actual losses will not exceed the allowance.

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

Noninterest Expense. Noninterest expense for fiscal 2001 increased $1.5 million,
to $5.2 million,  as compared to $3.8 million  expended for the prior year.  The
increase was primarily due to increased  expenses for compensation and benefits,
occupancy, advertising,  amortization of goodwill and other expense of $413,000,
$224,000, $71,000, $214,000 and $352,000, respectively. In addition, fiscal 2001
expenses  included a $125,000  provision  for loss on impairment of premises and
equipment,  which  consisted of a $51,000  write down on the  carrying  value of
computer  equipment  and a  $75,000  expense  related  to an  adjustment  in the
carrying value of the Company's former office in Kennett. Increased compensation
expense was primarily due to increased  staffing levels due to the  acquisition,
the addition of several loan officers,  increased support staff and transitional
labor cost  related to the  acquisition  and opening of a new branch.  Increased
occupancy  expense was primarily due to an increase in depreciation  expense due

                                       7
<PAGE>

to increased investment in premises and equipment. Increased advertising expense
was due to promotions  related to the branch  acquisition,  a new branch opening
and the offering of the new MMPA. Other expense increased due to $85,000 in data
processing  conversion costs, $63,000 in check issuance charges for customers of
the  acquired  branches,  $128,000  in  expenses  related to  repossessions  and
foreclosures and overall growth of the Company.

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

COMPARISON OF THE YEARS ENDED JUNE 30, 2000 AND 1999

Net  Income.   Southern  Missouri's  net  income  totaled  $1.3  million,  which
approximated the results of the prior year, exclusive of a $526,000 pre-tax gain
realized on the sale of the Bank's insurance operations during fiscal 1999.

Net Interest Income. Net interest income increased by $204,000, or 4.0%, to $5.4
million for fiscal 2000 when compared to the prior fiscal year. The increase was
primarily due to the $11.2 million  increase in the average  balance of interest
earning  assets,  which was largely  offset by a $11.6  million  increase in the
average  balance of  interest  bearing  liabilities  as well as a 7 basis  point
decline  in  the  average   interest  rate  spread   between  these  assets  and
liabilities. The decline in average interest rate spread was primarily due to an
increased ratio of short-term  interest bearing  liabilities to interest earning
assets as well as the  lagging  nature of the  repricing  of the Bank's  cost of
funds loan portfolio versus its cost of deposits.

Interest Income.  Interest income increased $876,000,  or 7.7%, to $12.3 million
for fiscal 2000 as compared to the prior fiscal year. The increase was primarily
due to an $11.2  million  increase  in the average  balance of interest  earning
assets and a 3 basis point increase in the average yield on these assets.

Interest income on loans receivable increased $607,000, or 6.5%, to $9.9 million
for fiscal 2000 as  compared to $9.3  million  for the prior  fiscal  year.  The
increase  was  primarily  due  to a  $9.6  million  increase  in  average  loans
receivable, partially offset by a 12 basis point decline in the average yield on
these loans.  Interest  income on the  investment and  mortgage-backed  security
portfolio  increased  $382,000,  or 19.7%,  to $2.3  million  for fiscal 2000 as
compared to $1.9 million for the prior fiscal year.  The increase was  primarily
due to a $4.0  million  increase  in average  investments  and a 41 basis  point
increase  in the  average  yield on these  investments.  Other  interest  income
decreased  $114,000  in fiscal  2000 as  compared  to  fiscal  1999 due to lower
average balances and yields earned on these assets.

Interest Expense. Interest expense increased $672,000, or 10.8%, to $6.9 million
for fiscal 2000 as compared to the prior fiscal year. The increase was primarily
due to an $11.6  million  increase  in the average  balance of  interest-bearing
liabilities  and a 10 basis point  increase  in the  average  rate paid on these
liabilities, to 4.68% during fiscal 2000 from 4.58% during fiscal 1999.

Provision  for Loan  Losses.  Provision  for loan  losses  decreased  $20,000 to
$215,000  for the year ended June 30, 2000 as compared to $235,000  for the year
ended June 30, 1999.  The decline was primarily due to a reduction in classified
assets from $5.1 million at June 30, 1999 to $4.0 million at June 30, 2000.  The
largest  classified  commercial  real  estate  relationship  as of June 30, 2000
totaled $2.6 million and was current at that date and  performing  in accordance
with its terms.

Noninterest Income.  Noninterest income declined $643,000, or 48.7%, to $612,000
for fiscal 2000 as compared to the $1.3 million  earned during fiscal 1999.  The
decline was  primarily due to a $526,000  one-time  gain realized  during fiscal
1999  from the sale of the  Bank's  insurance  operations  which  resulted  in a
$292,000  reduction in  insurance  commissions,  partially  offset by a $107,000
increase in banking service charges.

Noninterest  Expense.  Noninterest  expense increased  $75,000,  or 2.0% to $3.8
million for fiscal 2000 as compared  to the prior  fiscal  year.  The change was
primarily  due to higher  occupancy  expense of  $73,000,  professional  fees of
$40,000  and  postage  and  office  supplies  of  $23,000,  partially  offset by
reductions in compensation  expense of $31,000,  advertising  expense of $36,000
and deposit  insurance  premiums of $37,000.

                                       8
<PAGE>

The reduction in compensation  and benefits was primarily due to the sale of the
Bank's  insurance  operations  in the fourth  quarter of fiscal  1999  partially
offset by hiring additional  personnel in the loan department during this fiscal
year.  Occupancy and equipment expense increased due to higher  depreciation and
maintenance.  SAIF deposit  insurance  premiums  decreased as a result of a full
year benefit of the Bank's supervisory risk classification being upgraded during
fiscal  1999.   Professional  fees  increased  primarily  due  to  outside  data
processing consulting and legal fees.

Provision for Income  Taxes.  Provision  for income taxes  declined  $170,000 to
$690,000 for fiscal 2000 as compared to $860,000 for the prior fiscal year.  The
decrease was due to a reduction in pre-tax income.

ASSET/LIABILITY MANAGEMENT

The goal of Southern Missouri'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  Bank's  Net  Portfolio  Value  (NPV)  to an  excessive  level  of
interest-rate  risk. The Bank has employed various strategies intended to manage
the  potential  effect that  changing  interest  rates have on future  operating
results.  Historically,  the primary asset/liability management strategy focused
on  matching   the   repricing   intervals   of   interest-earning   assets  and
interest-bearing liabilities. This strategy resulted in a manageable exposure to
interest-rate risk with modest loan growth.

The primary elements of Southern  Missouri's  current  asset/liability  strategy
include (i) increasing  loans  receivable  through the origination of both fixed
and  adjustable-rate   residential  loans,  (ii)  growth  in  loans  secured  by
commercial  business and commercial real estate,  which typically provide higher
yields and shorter repricing periods, but inherently increase credit risk, (iii)
expanding  the  consumer  loan  portfolio,  (iv)  active  solicitation  of  less
rate-sensitive  deposits, (v) offering competitively priced CD's with maturities
of up to 5 years,  and (vi) the use of FHLB advances with maturities of up to 10
years, subject to early redemption (See Note 10 of audited financial statements)
to help manage exposure to interest-rate  risk. The degree to which each segment
of  the  strategy  is  achieved   will  affect   Southern   Missouri's   overall
profitability and exposure to interest-rate risk.

During the last three years,  Southern  Missouri  expanded its loan  products to
include  fixed rate loans for  residential  financing  based on an  amortization
schedule of up to 30 years.  This,  as well as more  competitive  pricing and an
increase in customer preferences for fixed-rate  residential  financing,  led to
fixed rate originations of $24.6 million during fiscal 2001 and $12.2 million in
fiscal 2000.  At June 30, 2001,  fixed rate loans with  remaining  maturities in
excess of 10 years  totaled  $46.4  million,  or 29.7% of loans  receivable,  as
compared to $34.1 million,  or 24.7% of loans receivable at the end of the prior
year.

AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES

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

The table also presents  information  for the periods  indicated 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.

                                        9

<PAGE>
<TABLE>
<CAPTION>

                                                                           Year Ended June 30,
                                         ----------------------------------------------------------------------------------
                                                      2001                        2000                       1999
                                         --------------------------  --------------------------  --------------------------

                                                  Interest                    Interest                   Interest
                                         Average     and     Yield/  Average     and     Yield/  Average     and    Yield/
                                         Balance  Dividends   Cost   Balance  Dividends   Cost   Balance  Dividends  Cost
                                         -------  ---------  ------  -------  ---------  ------  -------  ---------  ------
                                                                       (Dollars in thousands)
<S>                                     <C>        <C>       <C>    <C>        <C>       <C>     <C>      <C>       <C>

Interest-earning assets:
 Mortgage loans (1)                     $140,690   $ 11,361   8.08% $114,109   $ 8,784    7.70%  $106,117  $ 8,315    7.84%
 Other loans (1)                          24,993      2,445   9.78    12,139     1,109    9.14     10,510      971    9.24
                                        --------   --------  -----  --------   -------   -----   --------  -------   -----
   Total net loans                       165,683     13,806   8.33   126,248     9,893    7.84    116,627    9,286    7.96

 Mortgage-backed securities               15,812      1,002   6.34    14,180       867    6.11     17,074      973    5.70
 Investment securities (2)                18,681      1,117   5.98    23,546     1,455    6.18     16,693      967    5.79
 Other interest-earning assets             6,875        236   3.43     2,869        75    2.61      5,200      188    3.62
                                        --------   --------  -----  --------   -------   -----   --------  -------   -----
   Total interest-earning assets (1)     207,051     16,161   7.81   166,843    12,290    7.37    155,594   11,414    7.34

 Other noninterest-earning assets         12,445          -            5,158         -              5,292        -
                                        --------   --------         --------   -------           --------  -------
   Total assets                         $219,496   $ 16,161         $172,001   $12,290           $160,886  $11,414
                                        ========   ========         ========   =======           ========  =======

Interest-bearing liabilities:
 Passbook accounts                      $ 19,757   $    794   4.02  $  6,920   $   175    2.53   $  7,190  $   182    2.53
 NOW accounts                             22,567        389   1.72    12,266       240    1.96     10,672      210    1.97
 Money market accounts                    19,298        777   4.03    15,703       606    3.86     11,265      414    3.68
 Certificates of deposit                  92,959      5,308   5.71    86,346     4,402    5.10     87,189    4,457    5.11
                                        --------   --------  -----  --------   -------   -----   --------  -------   -----
  Total interest-bearing deposits        154,581      7,268   4.70   121,235     5,423    4.47    116,316    5,263    4.52

Borrowings
 Securities sold under agreements to
   repurchase                              3,486         99   2.84         -         -       -          -        -       -
 FHLB advances                            36,139      2,123   5.87    26,705     1,496    5.60     19,990      984    4.92
                                        --------   --------  -----  --------   -------   -----   --------  -------   -----
   Total interest-bearing liabilities    194,206      9,490   4.89   147,940     6,919    4.68    136,306    6,247    4.58

   Other liabilities                       2,702          -            1,973         -              2,045        -
                                        --------   --------         --------   -------           --------  -------
   Total liabilities                     196,908      9,490          149,913     6,919            138,351    6,247

   Stockholders' equity                   22,588          -           22,088         -             22,535        -
                                        --------   --------         --------   -------           --------  -------
      Total liabilities and
      stockholders' equity              $219,496   $  9,490         $172,001   $ 6,919           $160,886  $ 6,247
                                        ========   ========         ========   =======           ========  =======

   Net interest income                         -   $  6,671      -         -   $ 5,371       -          -  $ 5,167       -
      Interest rate spread (3)                 -          -   2.92%        -         -    2.69%         -        -    2.76%



   Net interest margin (4)                     -          -   3.22%        -         -    3.22%        -         -    3.32%
      Ratio of average interest-
      earning assets to average
      interest-bearing liabilities        106.61%         -      -    112.78%        -       -    114.15%        -       -

<FN>

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

                                       10

<PAGE>


YIELDS EARNED AND RATES PAID:

The following table sets forth for the periods and at the dates  indicated,  the
weighted  average yields earned on the Company's  assets,  the weighted  average
interest rates paid on the Company's liabilities, together with the net yield on
interest-earning assets.
<TABLE>
<CAPTION>

                                                            At                       For
                                                          June 30,           Year Ended June 30,
                                                          -------    -------------------------------
                                                            2001       2001       2000        1999
                                                          -------    -------     -------     -------

<S>                                                         <C>        <C>         <C>         <C>
Weighted-average yield on loan portfolio                    8.09%      8.33%       7.84%       7.96%

Weighted-average yield on mortgage-backed
 securities                                                 5.87       6.34        6.11        5.70

Weighted-average yield on investment
 securities (1)                                             4.98       5.98        6.18        5.79

Weighted-average yield on other
 interest-earning assets                                    3.87       3.43        2.61        3.62

Weighted-average yield on all
 interest-earning assets                                    7.56       7.81        7.37        7.34

Weighted-average rate paid on deposits                      4.08       4.70        4.47        4.52

Weighted-average rate, paid on securities
 sold under agreements to repurchase                        3.25        2.84          -           -

Weighted-average rate paid on FHLB
 advances                                                   5.73       5.87        5.60        4.92

Weighted-average rate paid on all
 interest-bearing liabilities                               4.35       4.89        4.68        4.58

Interest rate spread (spread between weighted
 average rate on all interest-earning assets
 and all interest-bearing liabilities)                      3.21       2.92        2.69        2.76

Net interest margin (net interest income
 as a percentage of average interest-
 earning assets)                                               -       3.22        3.22        3.32

<FN>

(1) Includes Federal Home Loan Bank stock.

</FN>
</TABLE>



                                       11

<PAGE>



RATE/VOLUME ANALYSIS

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

<TABLE>
<CAPTION>

                                          Years Ended June 30,                   Years Ended June 30,
                                         2001 Compared to 2000                  2000 Compared to 1999
                             ---------------------------------------  ---------------------------------------
                             Increase (Decrease)                      Increase (Decrease)
                                   Due to                                   Due to
                             ------------------  Rate/                ------------------  Rate/
                                Rate    Volume   Volume       Net        Rate    Volume   Volume       Net
                             -------- --------- --------- ----------  -------- --------- --------- ----------
                                                                  (Dollars in Thousands)

<S>                          <C>      <C>       <C>       <C>          <C>     <C>       <C>       <C>
Interest-earning assets:
    Loans receivable (1)       $619     $3,092    $ 202      $3,913     $(140)    $ 759     $(12)     $ 607
    Mortgage-backed
     securities                  33        100        2         135        70      (164)     (12)      (106)
    Investment securities       (40)      (216)     (82)       (338)       65       396       27        488
    Other interest-
     earning deposits            24        104       33         161       (54)      (84)      24       (114)
                               ----     ------    -----      ------     -----     -----     ----      -----

Total net change in
 income on interest-
 earning assets                 636      3,080      155       3,871       (59)      907       27        875
                               ----     ------    -----      ------     -----     -----     ----      -----

Interest-bearing
 liabilities:
    Deposits                    629      1,001      216       1,846         9       142        8        159
    Securities sold under
     agreements to repurchase     0          0       99          99         0         0        0          0
    FHLB advances                72        528       26         626       136       330       46        512
                               ----     ------    -----      ------     -----     -----     ----      -----

Total net change in
 expense on interest-
 bearing liabilities            701      1,529      341       2,571       145       472       54        671
                               ----     ------    -----      ------     -----     -----     ----      -----

Net change in net
 interest income               $(65)    $1,551    $(186)     $1,300     $(204)    $ 435     $(27)     $ 204
                               =====    ======    =====      ======     =====     =====     ====      =====

<FN>

(1) Does not include interest on loans placed on nonaccrual status.
</FN>
</TABLE>



                                       12

<PAGE>




INTEREST RATE SENSITIVITY ANALYSIS

The following  table sets forth as of June 30, 2001,  management's  estimates of
the  projected  changes in net  portfolio  value and net interest  income in the
event of 1%, 2%, and 3%,  instantaneous,  permanent  increases  or  decreases in
market interest rates.

                                                     NPV as % of
     Change               Net Portfolio              PV of Assets
    in Rates    $ Amount  $ Change    % Change   NPV Ratio   Change
    --------    --------  --------    --------   ---------   ------
                     (Dollars in thousands)

    +300 bp      16,437    (6,803)       (29)         7.04    -256 bp
    +200 bp      19,178    (4,062)       (17)         8.11    -149 bp
    +100 bp      21,726    (1,514)        (7)         9.08     -52 bp
       0 bp      23,240         -          -          9.60       -
    -100 bp      23,446       206          9          9.59      -1 bp
    -200 bp      23,307        67         29          9.44     -16 bp
    -300 bp      22,143    (1,097)        (4)         8.92     -68 bp

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

The  Bank's  reduced  exposure  to  interest-rate  risk  over the last  year was
attributed to several  factors  including the general  decline in interest rates
from June 30, 2000 to June 30, 2001. Also, the Bank significantly  increased its
balances of transaction and savings accounts,  which have historically  provided
less  sensitivity  to  fluctuating  interest  rates than CDs.  The change in the
composition  of  deposits  was largely  due to the branch  acquisitions  and the
introduction  of the MMPA. In addition,  interest rate  sensitivity  was reduced
when the Bank replaced $19.0 million in short-term  FHLB advances with long-term
callable FHLB advances,  which was partially  offset by a $16.3 million increase
in the portfolio of fixed rate residential loans.

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

LIQUIDITY AND CAPITAL RESOURCES

Southern  Missouri's  primary potential sources of funds include deposit growth,
securities sold under agreements to repurchase, FHLB advances,  amortization and
prepayment  of loan  principal,  investment  maturities  and sales,  and ongoing
operating results.  While scheduled loan repayments and maturing investments are
relatively   predictable,   deposit   flows  and  loan   prepayment   rates  are
significantly  influenced by factors  outside of the Bank's  control,  including
general  economic  conditions and competition.  Southern  Missouri has relied on
FHLB advances as a source for funding cash or liquidity needs.

Southern  Missouri uses its liquid  assets as well as other  funding  sources to
meet  ongoing  commitments,   to  fund  loan  commitments,   to  repay  maturing
certificates of deposit and FHLB advances,  to make  investments,  to fund other
deposit withdrawals and to meet operating  expenses.  At June 30, 2001, the Bank
had  outstanding  commitments to extend credit of $8.8 million  (including  $1.7
million on lines of credit). Management anticipates that current funding sources
will be adequate to meet  foreseeable  liquidity  needs.

                                       13
<PAGE>

The primary  sources of funding for the Company are  deposits,  securities  sold
under  agreements to repurchase and FHLB  advances.  For the year ended June 30,
2001,  Southern Missouri increased deposits and securities sold under agreements
to repurchase by $49.4 million and $4.1 million, respectively. The level of FHLB
advances remained stable.  During the prior year,  Southern  Missouri  increased
deposits by $3.8 million,  while the level of FHLB  advances  increased by $16.4
million.  At June 30, 2001, the Bank had additional  borrowing capacity from the
FHLB of approximately $45.1 million.

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, 2001, the Bank had $68.1 million in certificates of deposit maturing
within  one  year and  $92.7  million  in other  deposits  without  a  specified
maturity.  Management believes that most maturing  interest-bearing  liabilities
will be retained or replaced by new interest-bearing  liabilities.  Also at June
30,  2001,  the  Bank  had  $18.0  million  in FHLB  advances  subject  to early
redemption within one year.

REGULATORY CAPITAL

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

At June 30, 2001, SMBT exceeded  regulatory  capital  requirements with core and
risk-based  capital of $18.8  million  and $20.3  million,  or 8.2% and 14.0% of
adjusted  total assets and  risk-weighted  assets,  respectively.  These capital
levels exceeded minimum  requirements of 4.0% and 8.0% for adjusted total assets
and  risk-weighted  assets,  by  approximately  $9.6  million and $8.7  million,
respectively.  Under regulatory guidelines, SMBT was considered well-capitalized
at June 30, 2001.

IMPACT OF INFLATION

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

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

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






                                       14

<PAGE>


                   [Letterhead of Kraft, Miles & Tatum, LLC]





                          INDEPENDENT AUDITORS' REPORT



Board of Directors
Southern Missouri Bancorp, Inc.
Poplar Bluff, Missouri


We have audited the accompanying  consolidated statements of financial condition
of Southern Missouri Bancorp,  Inc. and Subsidiary (Company) as of June 30, 2001
and 2000,  and the  related  consolidated  statements  of income,  stockholders'
equity, and cash flows for each of the years in the three year period ended June
30, 2001. These consolidated  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Southern Missouri
Bancorp,  Inc. and  Subsidiary as of June 30, 2001 and 2000,  and the results of
their  operations  and their  cash flows for each of the years in the three year
period ended June 30, 2001 in conformity  with accounting  principles  generally
accepted in the United States of America.


/s/ Kraft, Miles & Tatum, LLC

Poplar Bluff, Missouri
July 25, 2001


                                       15

<PAGE>



                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             JUNE 30, 2001 AND 2000

<TABLE>
<S>                                                     <C>                   <C>

                                                             2001                  2000
                                                        ------------          ------------
         ASSETS

Cash and cash equivalents                               $ 10,710,122          $  4,470,373
Investment and mortgage-backed
 securities: (Note 3)
  Available for sale - at estimated market
   value (amortized cost $34,728,747 and
   $35,910,780 at June 30, 2001 and 2000,
   respectively)                                          35,121,355            34,910,850
Stock in Federal Home Loan Bank of Des Moines              2,150,000             1,850,000
Loans receivable, net (Note 4)                           180,856,594           138,424,750
Accrued interest receivable (Note 5)                       1,601,830             1,151,557
Foreclosed real estate, net (Note 6)                       1,162,156               463,591
Premises and equipment (Note 7)                            5,068,808             2,549,357
Goodwill                                                   3,624,706                     -
Prepaid expenses and other assets                            198,462               570,690
                                                        ------------          ------------

         Total assets                                   $240,494,033          $184,391,168
                                                        ============          ============



         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits (Note 8)                                       $173,281,419          $123,920,293
Securities sold under agreements to repurchase (Note 9)    4,115,142                     -
Advances from FHLB of Des Moines (Note 10)                37,000,000            37,000,000
Advances from borrowers for taxes and insurance              280,112               334,841
Accounts payable and other liabilities                     1,095,738               723,061
Accrued interest payable                                   1,139,134               956,386
                                                        ------------          ------------
         Total liabilities                               216,911,545           162,934,581
                                                        ------------          ------------

Commitments and contingencies (Note 15)                            -                     -

Preferred stock, $.01 par value; 500,000 shares
 authorized; none issued and outstanding                           -                     -
Common stock, $.01 par value; 3,000,000 shares
 authorized; 1,803,201 shares issued                          18,032                18,032
Additional paid-in capital                                17,450,851            17,517,834
Retained earnings-substantially restricted                15,372,440            14,438,957
Treasury stock of  530,621  shares in 2001 and
 549,352 shares in 2000, at cost                          (9,164,892)           (9,451,693)
Unearned employee benefits                                  (341,287)             (436,587)
Accumulated other comprehensive income                       247,344              (629,956)
                                                        ------------          ------------
         Total stockholders' equity                       23,582,488            21,456,587
                                                        ------------          ------------

         Total liabilities and stockholders' equity     $240,494,033          $184,391,168
                                                        ============          ============

</TABLE>


See accompanying notes to consolidated financial statements.


                                       16

<PAGE>



                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

<TABLE>
<S>                                        <C>             <C>              <C>
                                                2001           2000             1999
                                           ------------    ------------     ------------

Interest income:
     Loans receivable                      $ 13,806,477       9,893,254        9,285,757
     Investment securities                    1,116,939       1,455,486          967,142
     Mortgage-backed securities               1,002,102         866,792          972,770
     Other interest-earning assets              235,556          74,631          188,834
                                           ------------    ------------     ------------
               Total interest income         16,161,074      12,290,163       11,414,503
                                           ------------    ------------     ------------

Interest expense:
     Deposits (Note 8)                        7,268,120       5,422,703        5,263,225
     Securities sold under agreements
      to repurchase                              99,087               -                -
     Advances from FHLB                       2,122,810       1,496,250          984,168
                                           ------------    ------------     ------------
               Total interest expense         9,490,017       6,918,953        6,247,393
                                           ------------    ------------     ------------
               Net interest income            6,671,057       5,371,210        5,167,110

Provision for loan losses (Note 4)              510,000         215,000          235,000
                                           ------------    ------------     ------------
               Net interest income after
                provision for loan losses     6,161,057       5,156,210        4,932,110
                                           ------------    ------------     ------------

Noninterest income:
     Gain (loss) on sale of investment
      securities, available for sale             11,121          14,500             (625)
     Loss on sale of mortgage-backed
      securities, available for sale                  -         (35,705)         (27,942)
     Insurance commissions                       22,359          31,780          323,603
     Banking service charges                    503,452         390,949          284,058
     Loan late charges                           92,328          72,726           82,574
     Gain on sale of insurance agency                 -               -          526,413
     Gain on sale of branches                   633,538               -                -
     Other                                      184,024         137,625           67,070
                                           ------------    ------------     ------------
               Total noninterest income       1,446,822         611,875        1,255,151
                                           ------------    ------------     ------------

Noninterest expense:
     General and administrative:
       Compensation and benefits              2,618,465       2,205,770        2,237,166
       Occupancy and equipment                  794,172         570,283          496,929
       SAIF deposit insurance premium            27,516          47,842           85,265
       Professional fees                        205,177         175,920          136,304
       Advertising                              169,302          97,887          133,925
       Postage and office supplies              218,252         165,350          142,608
       Amortization of goodwill                 214,519               -                -
       Provision for loss on impairment
        of premises and equipment               125,338               -                -
       Other                                    846,536         494,864          450,300
                                           ------------    ------------     ------------
               Total noninterest expense      5,219,277       3,757,916        3,682,497
                                           ------------    ------------     ------------

Income before income taxes                    2,388,602       2,010,169        2,504,764
                                           ------------    ------------     ------------

Income taxes (Note 12)
   Current                                      850,000         775,300          580,300
   Deferred                                     (10,000)        (85,300)         279,700
                                           ------------    ------------     ------------
                                                840,000         690,000          860,000
                                           ------------    ------------     ------------


Net income                                 $  1,548,602       1,320,169        1,644,764
                                           ============    ============     ============

Basic earnings per common share            $       1.26            1.03             1.23
Diluted earnings per common share          $       1.25            1.02             1.20

</TABLE>


See accompanying notes to consolidated financial statements.


                                       17

<PAGE>




                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999
<TABLE>
<CAPTION>

                                                                                                  Accumulated
                                                   Additional                          Unearned      Other        Total
                                         Common     Paid-in     Retained   Treasury    Employee  Comprehensive Stockholders'
                                          Stock     Capital     Earnings     Stock     Benefits      Income       Equity
                                        ---------- ----------- ---------- ----------- ----------- ------------ -------------
<S>                                     <C>        <C>         <C>        <C>         <C>         <C>          <C>

Balance at June 30, 1998                  $ 18,032  17,628,758 12,771,731  (5,613,008)   (665,824)     (27,804)   24,111,885
                                        ---------- ----------- ---------- ----------- ----------- ------------ -------------

   Net income                                                   1,644,764                                          1,644,764
   Change in unrealized gain (loss)
    on available for sale securities                                                                  (355,788)     (355,788)
   Cumulative effect of change in
    accounting principle, net of tax
    (Note 1)                                                                                           132,713       132,713
                                                                                                                 -----------
      Total comprehensive income                                                                                   1,421,689
                                                                                                                 -----------

   Purchase of treasury stock                                              (2,803,903)                            (2,803,903)
   Dividends paid ($.50 per share)                               (657,007)                                          (657,007)
   Release of ESOP awards                               52,250                             83,261                    135,511
   MRP expense, net                                     16,800                             66,309                     83,109
   MRP shares awarded                                   14,814                            (14,814)                         -
   Exercise of stock options                          (167,078)                           505,256                    338,178
                                        ---------- ----------- ---------- ----------- ----------- ------------ -------------
Balance at June 30, 1999                    18,032  17,545,544 13,759,488  (7,911,655)   (531,068)    (250,879)   22,629,462
                                        ---------- ----------- ---------- ----------- ----------- ------------ -------------

   Net income                                                   1,320,169                                          1,320,169
   Change in unrealized gain (loss)
    on available for sale securities                                                                  (379,077)     (379,077)
                                                                                                                ------------
      Total comprehensive income                                                                                     941,092
                                                                                                                ------------

   Purchase of treasury stock                                              (1,762,530) (1,762,530)
   Dividends paid ($.50 per share)                               (640,700)               (640,700)
   Release of ESOP awards                               23,023                             84,021                    107,044
   MRP expense, net                                                                        20,210                     20,210
   MRP shares awarded                                    9,750                             (9,750)                         -
   Exercise of stock options                           (60,483)              222,492                                 162,009
                                        ---------- ----------- ---------- ----------- ----------- ------------ -------------
Balance at June 30, 2000                    18,032  17,517,834 14,438,957  (9,451,693)   (436,587)    (629,956)   21,456,587
                                        ---------- ----------- ---------- ----------- ----------- ------------ -------------

   Net income                                                   1,548,602                                          1,548,602
   Change in unrealized gain (loss)
    on available for sale securities                                                                   877,300       877,300
                                                                                                               -------------
       Total comprehensive income                                                                                  2,425,902
                                                                                                               -------------


   Purchase of treasury stock                                                 (10,646)                               (10,646)
   Dividends paid ($.50 per share)                               (615,119)                                          (615,119)
   Release of ESOP awards                               25,128                             81,876                    107,004
   MRP expense, net                                                                        13,424                     13,424
   Exercise of stock options                           (92,111)               297,447                                205,336
                                        ---------- ----------- ---------- ----------- ----------- ------------ -------------
Balance at June 30, 2001                $   18,032  17,450,851 15,372,440  (9,164,892)   (341,287)     247,344    23,582,488
                                        ========== =========== ========== =========== =========== ============ =============

</TABLE>


See accompanying notes to consolidated financial statements.

                                       18

<PAGE>



                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

<TABLE>
<S>                                           <C>              <C>              <C>

                                                   2001            2000             1999
                                              ------------     ------------     -----------
Cash flows from operating activities:
   Net income                                 $  1,548,602        1,320,169       1,644,764
   Items not requiring (providing) cash:
     Depreciation and amortization                 413,087          263,726         265,769
     MRP expense and ESOP expense                  120,429          127,254         201,820
     (Gain) loss on sale of investment
      securities, available for sale               (11,121)         (14,500)            625
     Loss on sale of mortgage-backed
      securities, available for sale                     -           35,705          27,942
     Amortization of goodwill                      214,519                -               -
     Provision for loss on impairment of
        premises and equipment                     125,338                -               -
     Provision for loan losses                     510,000          215,000         235,000
     Gain on sale of insurance agency                    -                -        (526,413)
     Gain on sale of branches                     (633,538)               -               -
     Net amortization of deferred income,
      premiums, and discounts                       47,713           87,489         117,757
   Changes in:
     Accrued interest receivable                  (115,188)        (118,481)       (125,298)
     Prepaid expenses and other assets              85,903          (82,027)        189,333
     Accounts payable and other liabilities        227,847          131,533         132,409
     Accrued interest payable                        2,729          227,527         147,269
                                              ------------     ------------     -----------
        Net cash provided by
         operating activities                    2,536,320        2,193,395       2,310,977
                                              ------------     ------------     -----------

Cash flows from investing activities:
   Net (increase) decrease in loans            (27,157,886)     (20,522,582)        874,888
   Net cash received in acquisition
    of branches                                 14,021,579                -               -
   Net cash paid in sale of branches            (4,153,644)               -               -
   Proceeds from sales of investment
    securities, available for sale               7,102,357        1,034,500         999,375
   Proceeds from maturing investment
    securities, available for sale              10,195,000          415,000       5,440,000
   Proceeds from maturing investment
    securities, held to maturity                         -                -         875,000
   Purchase of investment securities,
    available for sale                          (3,558,681)      (2,759,750)    (14,581,010)
   Proceeds from sales of mortgage-backed
    securities, available for sale                       -        3,365,084       1,700,497
   Proceeds from maturing mortgage-backed
    securities, available for sale               2,343,854        2,202,514       5,659,654
   Purchase of mortgage-backed
    securities, available for sale             (14,937,089)      (1,976,250)    (10,330,331)
   Purchase of FHLB stock                         (300,000)        (759,000)        (37,500)
  Purchase of premises and equipment            (1,648,548)        (934,364)       (282,257)
  Proceeds from sale of foreclosed
    real estate                                    365,347          178,122          39,477
                                              ------------     ------------     -----------
        Net cash used in
         investing activities                 $(17,727,711)     (19,756,726)     (9,642,207)
                                              ============     ============     ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                       19

<PAGE>

                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999


<TABLE>
<S>                                           <C>              <C>              <C>
                                                  2001              2000            1999
                                              ------------     ------------     -----------
Cash flows from financing activities:
   Net increase in demand
    deposits and savings accounts             $ 38,489,609        1,894,048       6,331,517
   Net increase (decrease) in
    certificates of deposit                    (20,730,046)       1,871,705       4,412,587
   Net increase in securities sold under
    agreements to repurchase                     4,115,142                -               -
   Proceeds from Federal Home Loan
    Bank Advances                               77,000,000      143,550,000       6,250,000
   Repayments of Federal Home Loan
    Bank Advances                              (77,000,000)    (127,100,000)     (6,768,905)
   Net increase (decrease) in advances from
    borrowers for taxes and insurance              (16,460)          16,887           2,831
   Dividends on common stock                      (615,119)        (640,700)       (657,007)
   Exercise of stock options                       198,660          135,620         306,310
   Payments to acquire treasury stock              (10,646)      (1,762,530)     (2,803,903)
                                              ------------     ------------     -----------
      Net cash provided by
       financing activities                     21,431,140       17,965,030       7,073,430
                                              ------------     ------------     -----------
Increase (decrease) in cash
 and cash equivalents                            6,239,749          401,699        (257,800)

Cash and cash equivalents
 at beginning of year                            4,470,373        4,068,674       4,326,474
                                              ------------     ------------     -----------

Cash and cash equivalents
 at end of year                               $ 10,710,122        4,470,373       4,068,674
                                              ============     ============     ===========
</TABLE>

Supplemental disclosures of cash flow information:
<TABLE>
<S>                                           <C>               <C>             <C>

Noncash investing and
 financing activities
Conversion of loans to
 foreclosed real estate                       $  1,134,909          424,507         395,375

Conversion of foreclosed
 real estate to loans                         $    153,000          175,000         134,000

Transfer of investment securities from
 held to maturity to available for sale       $          -                -       3,766,292

Cash paid during the period for
Interest (net of interest credited)           $  3,718,786        2,677,920       1,577,100

Income taxes                                  $    797,254          706,051         468,514

</TABLE>

Noncash  investing  and  financing  transactions  relating  to  the  two  branch
acquisitions that are not reflected in the Consolidated  Statement of Cash Flows
for the year ended June 30, 2001 are listed below:

Fair value of assets acquired excluding cash and
 cash equivalents acquired                                $27,249,092
Liabilities assumed                                       (45,109,896)
Goodwill                                                    3,839,225
Net cash received in acquisition of branches               14,021,579

See accompanying notes to consolidated financial statements.

                                       20

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


NOTE 1:  Organization and Summary of Significant Accounting Policies

       Organization

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

       Basis of Financial Statement Presentation

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

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

       Principles of Consolidation

       The  consolidated  financial  statements  include  the  accounts  of  the
       Company,   its  wholly-owned   subsidiary,   the  Bank,  and  the  Bank's
       wholly-owned  subsidiary,  S.M.S. Financial Services,  Inc. The insurance
       agency of S.M.S.  Financial  Services,  Inc. was sold  effective  May 31,
       1999. The operations of the agency were not material to the  consolidated
       financial  condition  or  operations  of  the  Company.  All  significant
       intercompany accounts and transactions have been eliminated.

       Cash and Cash Equivalents

       For purposes of reporting cash flows,  cash and cash equivalents  include
       cash and 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
       $8,686,946 and $3,074,277 at June 30, 2001 and 2000, respectively.

       Investment and Mortgage-Backed Securities

       Effective  April 1, 1999,  the Company  adopted  Statement  of  Financial
       Accounting   Standards(SFAS)   No.  133,   "Accounting   for   Derivative
       Instruments and Hedging Activities".  SFAS No. 133 establishes accounting
       and reporting  standards for derivative  instruments,  including  certain
       derivative   instruments   embedded  in  other   contracts   and  hedging
       activities. The statement further requires that all derivatives should be
       recognized  as either  assets or  liabilities  and  measured  at the fair
       value. The accounting for changes in the fair value, or gains and losses,
       of a  derivative  depends  on the  use of the  derivative  and  resulting
       designation. Presently, management does not intend to purchase derivative
       instruments or enter into hedging activities.

                                       21
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999



       With the adoption of SFAS No. 133, the Company  transferred its remaining
       held to  maturity  investment  securities  into  the  available  for sale
       category.  All  investments  transferred  were  obligations  of state and
       political  subdivisions  with an amortized cost of $3,766,292 at the date
       of transfer.  The cumulative effect of the change in accounting principle
       of $132,713,  net of income taxes of $77,942,  is included as a credit in
       other  comprehensive  income  for the  year  ended  June  30,  1999.  The
       transition provisions of SFAS No. 133 provide that at the date of initial
       application,  any debt  security  categorized  as held to maturity may be
       transferred  into the available for sale  category  without  calling into
       question the Company's  intent to hold other debt  securities to maturity
       in the future.

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

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

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

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

       Loans Receivable, Net

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

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

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

       In accordance  with SFAS No. 114,  "Accounting by Creditor for Impairment
       of a Loan," as amended by SFAS No.  118,  the  Company  considers  a loan
       impaired when, based upon current  information and events, it is probable
       that it will be unable to collect all amounts  due,  both  principal  and
       interest,  according to the contractual terms of the loan agreement. SFAS
       No.  114 does not apply to large  groups of  smaller-balance  homogeneous

                                       22
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


       loans that are  collectively  evaluated for  impairment,  which,  for the
       Company,  include  residential  real  estate  loans and  consumer  loans.
       Valuation   allowances  are   established  for  impaired  loans  for  the
       difference  between  the loan  amount and fair value of  collateral  less
       estimated  selling costs.  Impaired loans are placed on nonaccrual status
       at the point they  become  contractually  delinquent  90 days or more and
       cash receipts are applied,  and interest income  recognized,  pursuant to
       the  discussion  above  for  nonaccrual  loans.   Impairment  losses  are
       recognized through an increase in the allowance for loan losses.

       Loan Origination Fees

       Loan fees and certain direct loan origination costs are deferred, and the
       net fee or cost is recognized  as an adjustment to interest  income using
       the interest method over the contractual life of the loans.

       Foreclosed Real Estate

       Real estate  acquired by foreclosure or by deed in lieu of foreclosure is
       initially  recorded  at the lower of cost or fair  value  less  estimated
       selling costs.  Costs for development and improvement of the property are
       capitalized.

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

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

       Income Taxes

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

       Premises and Equipment

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

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

       Earnings Per Share

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

       Goodwill

       Goodwill  represents  the excess of purchase price over the fair value of
       net assets,  acquired by the Company and is being  amortized over fifteen
       years using the  straight-line  method.  The Company reviews goodwill for
       impairment  whenever  events or changes  in  circumstances  indicate  the
       carrying value may not be recoverable  over the original  estimated life.
       As  adjustments  become  necessary,  they are reflected in the results of
       operations in which they become known.

                                       23
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999

       Segments

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

The following paragraph summarizes the impact of new accounting pronouncements:

       In July 2001, the Financial  Accounting  Standards  Board issued SFAS No.
       141,  "Business  Combinations",  and SFAS No.  142,  "Goodwill  and Other
       Intagible  Assets".  SFAS No.  141  requires  all  business  combinations
       initiated  after June 30,  2001 to be  accounted  for using the  purchase
       method.  SFAS No. 142 eliminates the amortization of goodwill relating to
       past  and  future  acquisitions  and  instead  subjects  goodwill  to  an
       impairment  assessment.  The  provisions  of SFAS No.  142 will  apply to
       existing goodwill and other intangible assets effective July 1, 2002. The
       adoption  of SFAS  No.  141 will not  have an  impact  on our  historical
       financial statements.

NOTE 2:  Acquisitions and Divestitures

       In August 2000, the Bank  purchased two full service  branches in Kennett
       and Qulin, Missouri,  from Commerce Bancshares,  Inc. for $4.9 million in
       cash. The transaction  resulted in the acquisition of approximately $25.3
       million  in  loans,  $1.6  million  in  premises  and  equipment  and the
       assumption of $44.7 million in deposits.  The excess of the cost over the
       fair  value of the net  assets  acquired  was $3.8  million  and is being
       amortized over 15 years.

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

       The  aforementioned  acquisition  was  accounted  for using the  purchase
       method  of  accounting  and  accordingly,   the  consolidated   financial
       statements  include the financial  position and results of operations for
       the period subsequent to the acquisition date.

NOTE 3:  Investment and Mortgage-Backed Securities

       Available for Sale - The amortized cost,  gross unrealized  gains,  gross
       unrealized losses and estimated market value of securities  available for
       sale consisted of the following:
<TABLE>
<CAPTION>
                                                     June 30, 2001
                                                    Gross     Gross      Estimated
                                      Amortized  Unrealized Unrealized     Market
                                        Cost        Gains     Losses       Value
                                     ----------    -------   --------   ----------
<S>                                <C>           <C>         <C>       <C>

Investment securities:
  U.S. government and federal
   agency obligations              $  4,955,106     10,514          -    4,965,620
  Obligations of states and
   political subdivisions             3,796,472    134,972          -    3,931,444
                                     ----------    -------   --------   ----------
   Total investment securities        8,751,578    145,486          -    8,897,064
                                     ----------    -------   --------   ----------

Mortgage-backed securities:
  FHLMC certificates                  1,823,691      7,381          -    1,831,072
  GNMA certificates                   1,436,790     15,702      2,554    1,449,938
  FNMA certificates                     479,853          -      3,813      476,040
  CMO's issued by
   government agencies               20,539,801    248,054     41,773   20,746,082
  CMO's issued by private issuer      1,697,034     24,125          -    1,721,159
                                     ----------    -------   --------   ----------
     Total mortgage-backed
      securities                     25,977,169    295,262     48,140   26,224,291
                                     ----------    -------   --------   ----------

   Total                           $ 34,728,747    440,748     48,140   35,121,355
                                     ==========    =======   ========   ==========
</TABLE>

                                       24

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999

<TABLE>
<CAPTION>
                                                        June 30, 2000
                                                      Gross      Gross      Estimated
                                       Amortized    Unrealized Unrealized     Market
                                         Cost         Gains      Losses       Value
                                       ----------    -------   ---------   ----------
<S>                                  <C>            <C>        <C>        <C>

Investment securities:
  U.S. government and federal
   agency obligations                $ 18,339,118         -      593,386   17,745,732
  Obligations of states and
   political subdivisions               4,146,903     62,348         789    4,208,462
                                       ----------    -------   ---------   ----------
     Total investment securities       22,486,021     62,348     594,175   21,954,194
                                       ----------    -------   ---------   ----------

Mortgage-backed securities:
  GNMA certificates                     1,977,258         -       39,860    1,937,398
  FNMA certificates                       603,330         -       17,450      585,880
  CMO's issued by
   government agencies                 10,844,171         -      410,793   10,433,378
                                       ----------    -------   ---------   ----------
     Total mortgage-backed
      securities                       13,424,759         -      468,103   12,956,656
                                       ----------    -------   ---------   ----------

     Total                           $ 35,910,780     62,348   1,062,278   34,910,850
                                       ==========    =======   =========   ==========

</TABLE>

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

                                                     June 30, 2001
                                                   Available for Sale
                                                                  Estimated
                                            Amortized               Market
                                              Cost                  Value
                                           ----------            ----------

       Due in one year or less           $  1,095,561             1,108,511
       Due after one year
        thru 5 years                        7,215,643             7,310,028
       Due after 5 years
        thru 10 years                         440,374               478,525
                                           ----------            ----------

            Total investment
             securities                     8,751,578             8,897,064
                                           ----------            ----------

       Mortgage-backed securities          25,977,169            26,224,291
                                           ----------            ----------

            Total                        $ 34,728,747            35,121,355
                                           ==========            ==========

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

                                                         June 30,
                                            2001           2000          1999
                                         ----------     ----------   ----------
       Proceeds from sales:
         Investment securities           $7,102,357      1,034,500      999,375

         Mortgage-backed securities               -      3,365,084    1,700,497

       Gross realized gains:
         Investment securities               15,680         14,500            -
         Mortgage-backed securities               -              -        4,879

       Gross realized losses:
         Investment securities               (4,559)             -         (625)
         Mortgage-backed securities               -        (35,705)     (32,821)

                                       25
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


       The carrying value of investment and  mortgage-backed  securities pledged
       as collateral  to secure  public  deposits  amounted to  $12,080,527  and
       $14,238,015 at June 30, 2001 and 2000, respectively.

       Adjustable rate mortgage loans included in mortgage-backed  securities at
       June  30,  2001  and  2000   amounted  to  $3,292,580   and   $3,801,832,
       respectively.

NOTE 4:  Loans Receivable, net

       Loans receivable, net are summarized as follows:

                                                        June 30,
                                               2001                  2000
                                           -----------           -----------
Real estate loans:
 Conventional                            $ 109,979,202            94,747,953
 Construction                                3,374,680             5,703,982
 Commercial                                 36,612,380            23,303,047
Loans secured by deposit accounts              871,319               824,899
Consumer loans                              10,949,930             8,829,338
Commercial                                  22,287,531             7,349,605
                                           -----------           -----------
                                           184,075,042           140,758,824
Loans in process                            (1,728,786)           (1,021,289)
Deferred loan fees, net                        (27,978)              (31,673)
Deferred gain on sale of real estate                 -                (4,159)
Allowance for loan losses                   (1,461,684)           (1,276,953)
                                           -----------           -----------
                                         $ 180,856,594           138,424,750
                                           ===========           ===========

       Adjustable-rate   loans  included  in  the  loan  portfolio  amounted  to
       $90,801,530 and $82,167,478 at June 30, 2001 and 2000, respectively.

       One-to four-family residential real estate loans amounted to $107,809,992
       and $91,290,092 at June 30, 2001 and 2000, respectively.

       Real  estate  construction  loans are secured  principally  by single and
       multi-family dwelling units.

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

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

                                                  June 30,
                                       2001        2000          1999
                                    ---------    ---------     ---------

 Balance, beginning of period     $ 1,276,953    1,191,147     1,295,222
                                    ---------    ---------     ---------
 Loans charged-off                   (628,289)    (240,036)     (429,998)
 Recoveries of loans previously
charged off                            53,020      110,842        90,923
                                    ---------    ---------     ---------
 Net charge-offs                     (575,269)    (129,194)     (339,075)
                                    ---------    ---------     ---------

 Provision charged to expense         510,000      215,000       235,000
 Acquired allowance for losses        250,000           -             -
                                    ---------    ---------     ---------
 Balance, end of period           $ 1,461,684    1,276,953     1,191,147
                                    =========    =========     =========

       The Company ceased  recognition  of interest  income on loans with a book
       value of $0,  $537,000  and  $181,000  at June 30,  2001,  2000 and 1999,
       respectively. The average balance of nonaccrual loans for the years ended
       June 30,  2001,  2000,  and  1999 was  $132,000,  $217,000  and  $321,000
       respectively.  Allowance for losses on nonaccrual  loans  amounted to $0,
       $146,000,  and $18,000 at June 30, 2001, 2000, and 1999.  Interest income
       of  approximately  $0,  $23,000 and $13,000 was recognized on these loans
       for the years ended June 30,  2001,  2000 and 1999,  respectively.  Gross
       interest income would have been approximately $0, $51,000 and $17,000 for
       the  years  ended  June 30,  2001,  2000 and 1999,  respectively,  if the
       interest  payments  had been  received in  accordance  with the  original
       terms.  The Bank is not committed to lend  additional  funds to customers
       whose loans have been placed on nonaccrual.

                                       26
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


       Of the above  nonaccrual  loans at June 30, 2001, 2000 and 1999 none were
       considered to be impaired.  The average balance of impaired loans for the
       years  ended  June 30,  2001,  2000 and 1999  was $0,  $0,  and  $26,000,
       respectively.

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

       Balance, June 30, 1999           $  434,570
        Additions                          604,294
        Repayments                        (234,986)
                                        ----------
       Balance, June 30, 2000              803,878
         Additions                         973,570
         Repayments                       (189,603)
                                        ----------
       Balance, June 30, 2001           $1,587,845
                                        ==========

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

NOTE 5:  Accrued Interest Receivable

       Accrued interest receivable is summarized as follows:

                                                      June 30,
                                             2001                 2000
                                          -----------          ---------
       Investment securities              $   205,051            408,314
       Mortgage-backed securities             139,443             72,279
       Loans receivable                     1,257,336            670,964
                                          -----------          ---------

                                          $ 1,601,830          1,151,557
                                          ===========          =========

NOTE 6:  Foreclosed Real Estate

       Foreclosed real estate consists of the following:

                                              June 30,
                                      2001               2000
                                    ---------          ---------
       Foreclosed real estate     $ 1,162,156            463,591
       Allowance for losses                 -                  -
                                    ---------          ---------
                                  $ 1,162,156            463,591
                                    =========          =========
NOTE 7:  Premises and Equipment

       Following is a summary of premises and equipment:

                                                          June 30,
                                                 2001              2000
                                               ---------         ----------
       Land                                  $ 1,095,080            650,941
       Buildings and improvements              3,536,414          2,418,814
       Furniture, fixtures, and equipment      2,296,987          1,630,995
       Automobiles                                29,797             51,696
       Construction in progress                  199,833                 -
                                               ---------          ---------
                                               7,158,111          4,752,446
       Less accumulated depreciation          (2,089,303)        (2,203,089)
                                               ---------         ----------

                                             $ 5,068,808          2,549,357
                                               =========         ==========

       Depreciation expense for the years ended June 30, 2001, 2000 and 1999 was
       $413,087, $263,726 and $265,769, respectively.

       Construction  in progress  consists of a new full  service  branch  being
       built in Doniphan, Missouri. Estimated completion date is October 2001 at
       an additional estimated cost of $500,000.

       During  2001,  an  impairment  loss of  $125,338  was  recognized  on the
       abandonment of certain  computer  equipment and as a result of a decrease
       in the market value of the Company's former office in Kennett, Missouri.

                                       27
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999

NOTE 8: Deposits

       Deposits are summarized as follows:
                                                             June 30,
                                                      2001            2000
                                                   -----------     -----------

       Non-interest bearing accounts             $   9,731,376       2,049,111
       NOW accounts                                 15,980,318      11,408,738
       Money market deposit accounts                20,695,313      13,572,245
       Savings accounts                             46,291,900       6,864,899
                                                   -----------     -----------
                 Total transaction accounts         92,698,907      33,894,993
                                                   -----------     -----------

       Certificates:
                 3.00 - 3.99%                        1,787,509              -
                 4.00 - 4.99%                       19,546,986      28,950,737
                 5.00 - 5.99%                       38,770,988      37,008,198
                 6.00 - 6.99%                       12,326,045      23,947,540
                 7.00 - 7.99%                        8,092,874          52,666
                 8.00 - 8.99%                           58,110          66,159
                                                   -----------      ----------
                 Total certificates,  5.53%
                  and 5.47%, respectively           80,582,512      90,025,300
                                                   -----------     -----------



        Total deposits                           $ 173,281,419     123,920,293
                                                   ===========     ===========

  Weighted-average rates - deposits                       4.08%           4.79%
                                                   ===========     ===========

           The  aggregate  amount  of  certificates  of  deposit  with a minimum
           denomination  of $100,000 was $12,864,088 and $20,507,645 at June 30,
           2001 and 2000, respectively.

           Certificate maturities at June 30, 2001 are summarized as follows:

           July 1, 2001 to June 30, 2002              $ 68,072,202
           July 1, 2002 to June 30, 2003                7,708,961
           July 1, 2003 to June 30, 2004                3,652,548
           July 1, 2004 to June 30, 2005                  544,579
           July 1, 2005 to June 30, 2006                  604,222
                                                       ----------
                                                     $ 80,582,512

           Interest expense on deposits is summarized as follows:

                                             Year Ended June 30,
                                    2001            2000           1999
                                 ----------      ----------     ----------

 NOW accounts                    $  388,792         239,815        210,180
 Money market deposit accounts      777,089         606,109        414,011
 Savings accounts                   793,810         174,494        181,567
 Certificates of deposit          5,308,429       4,402,285      4,457,467
                                 ----------      ----------     ----------

                                 $7,268,120       5,422,703      5,263,225
                                 ==========      ==========     ==========

NOTE 9:  Securities Sold Under Agreements to Repurchase

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

                                                           June 30
                                                             2001
                                                         -----------
                 Year end balance                        $ 4,115,142
                 Average balance during the year           3,486,000
                 Maximum month-end balance during
                  the year                                 5,169,096
                 Average interest during the year            2.84%
                 Year end interest rate                      3.25%

       The market value of the securities  underlying the agreements at June 30,
       2001 was $4,377,104.  The securities sold under  agreements to repurchase
       are under the Company's control.


                                       28

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


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

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


Call Date or
 Quarterly                    Interest
 Maturity      Thereafter       Rate         2001            2000
                                          ------------    ----------
 07-06-00        ----           6.60%     $         -      7,000,000
 01-10-01      07-10-00         6.67%               -      9,000,000
 02-15-01      07-17-00         6.64%               -      3,000,000
 02-06-08      08-06-01         5.17%        3,000,000     3,000,000
 10-26-09      12-01-01         5.50%       10,000,000    10,000,000
 01-20-10      07-20-01         5.77%        5,000,000     5,000,000
 10-27-10      10-27-03         5.86%        9,000,000            -
 12-09-10      12-09-05         5.93%       10,000,000            -
                                          ------------    ----------
                                          $ 37,000,000    37,000,000
                                          ============    ==========

 Weighted average rate                            5.73%         6.09%
                                          ============    ==========

       In  addition to the above  advances,  the Bank had an  available  line of
       credit  amounting to $45,170,000,  $33,672,000  and $39,785,000  with the
       FHLB at June 30, 2001, 2000 and 1999, respectively.

       Advances  from  Federal  Home Loan Bank of Des Moines are secured by FHLB
       stock  and  one-  to  four-family   mortgage  loans  of  $44,400,000  and
       $46,250,000 at June 30, 2001 and 2000, respectively.  Scheduled principal
       maturities of advances from Federal Home Loan Bank of Des Moines are over
       the next seven to ten years.

NOTE 11:  Employee Benefits

       The  Bank  has  adopted  a  401(k)   profit   sharing  plan  that  covers
       substantially  all eligible  employees.  Contributions to the plan are at
       the discretion of the Board of Directors of the Bank.  During 2001,  2000
       and 1999, there were no contributions made to the plan.

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

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

       Shares are released from collateral and allocated to  participants  based
       on  pro-rata  compensation  as the  loan  is  repaid  over  seven  years.
       Effective  July 1,  1998,  the loan  terms were  modified  and  principal
       payments were extended an additional four years. Benefits are vested over
       five  years.  Forfeitures  are  allocated  on the  same  basis  as  other
       contributions.  Benefits  are payable  upon a  participant's  retirement,
       death, disability or separation of service. The purchase of the shares of
       the ESOP has  been  recorded  in the  consolidated  financial  statements
       through a credit to common stock and  additional  paid-in  capital with a
       corresponding  charge  to a  contra  equity  account  for the  unreleased
       shares. As shares are committed to be released from collateral,  the Bank
       reports  compensation expense equal to the average fair value of the ESOP
       shares committed to be released. The ESOP expense for 2001, 2000 and 1999
       was $107,004, $107,044, and $135,511, respectively.

       The number of ESOP shares at June 30, 2001 and 2000 were as follows:

                                        2001              2000
                                        ----              ----
 Allocated shares                      55,730            66,976
 Unreleased shares                     26,096            34,283
                                      -------           -------
     Total ESOP shares                 81,826           101,259
                                      =======           =======

       The fair value of unreleased ESOP shares at June 30, 2001 was $365,344.

                                       29

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


       The Bank adopted a management  recognition  plan (MRP) for the benefit of
       non-employee  directors and two MRPs for officers and key employees  (who
       may also be directors) in April 1994.  Total shares in the MRP left to be
       issued are 4,158 at June 30, 2001.  During 2001, 2000, and 1999, the Bank
       granted 0, 2,700 and 1,500 shares, respectively, to employees. The shares
       granted are in the form of restricted stock payable at the rate of 20% of
       such  shares per year.  Compensation  expense,  in the amount of the fair
       market value of the common stock at the date of grant, will be recognized
       pro rata over the five years during which the shares are payable.

       The Board of Directors can terminate the MRPs at any time, and if it does
       so, any shares not allocated will revert to the Company.  The MRP expense
       for 2001, 2000 and 1999 was $13,425, $20,210 and $66,309, respectively.

       The  Company  sponsors a stock  option plan  adopted in April  1994.  The
       purpose  of the  plan  is to  provide  additional  incentive  to  certain
       directors,  officers and key employees of the Bank. In October 1999,  the
       stockholders  voted to increase the number of shares reserved for options
       by 67,932 shares.  The stock options are granted at the fair market value
       of the common stock on the date of the grant.  Through June 30, 1999, all
       options  granted were 100% vested at the grant date.  For shares  granted
       since June 30, 1999, the vesting period range from the grant date up to a
       five year  period.  All  options  expire  ten years  from the date of the
       grant. At June 30, 2001, there are 36,932 shares remaining  available for
       option grants. The weighted average remaining contractual life of options
       outstanding at June 30, 2001 is 6.1 years.

       Changes in options outstanding were as follows:

                                              Number of      Weighted Average
                                                Shares        Exercise Price
                                             ------------    -----------------
             Balance at June 30, 1998          118,325           $ 12.08
             Granted                            15,000             13.50
             Exercised                         (30,631)            10.00
                                               -------
             Balance at June 30, 1999          102,694             12.29
             Granted                            31,491             13.48
             Exercised                         (13,562)            10.00
                                               -------
             Balance at June 30, 2000          120,623             12.86
             Granted                            20,000             13.38
             Exercised                         (19,566)            10.00
             Forfeited                          (6,000)            13.00
                                               -------

             Balance at June 30,2001           115,057             13.40
                                               =======

       The  Company has  estimated  the fair value of awards  granted  under its
       stock option plan during 2001, 2000, and 1999 utilizing the Black-Scholes
       pricing model.

       For the options  granted in 2001,  2000 and 1999, the Company has applied
       Accounting  Principles Board Opinion No. 25, "Accounting for Stock Issued
       to Employees."  Accordingly,  no compensation expense has been recognized
       for its stock-based  compensation  plans. Had  compensation  cost for the
       Company's stock option plan been determined  based upon the fair value at
       the  grant  date  for  awards  under  these  plans  consistent  with  the
       methodology  prescribed  under SFAS No. 123,  "Accounting for Stock-Based
       Compensation,"  the Company's  net income and diluted  earnings per share
       would have been reduced by approximately $19,000, $62,000 and $38,000, or
       $.02, $.05 and $.03 per share in 2001, 2000 and 1999, respectively.


                                       30

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


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

                                          2001        2000        1999
                                          ----        ----        ----

  Fair value at grant date             $ 28,000    $ 93,000    $ 57,000

  Assumptions:
    Expected dividend yield               5.00%       5.00%       5.00%
    Expected volatility                  21.00%      22.00%      19.00%
    Risk-free interest rate               5.60%       6.20%       5.64%
    Weighted-average expected life      5 years     5 years     5 years

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

      Full Years of Service            Non-Employee Director's
          on the Board                    Vested Percentage

             Less than 5                          0%
               5 to 9                            50%
              10 to 14                           75%
             15 or more                         100%


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

       The  following  items are  components  of net pension  cost for the years
       ended June 30, 2001, 2000 and 1999.
                                          2001          2000           1999
                                          ----          ----           ----

Service cost - benefits earned
 during the year                      $   5,537         4,062          1,836
Interest cost on benefit obligation      12,258        11,998         11,401
Amortization of prior service cost
 and net obligation                           0             0              0
Amortization of unrecognized gains         (589)       (1,148)        (1,178)
                                        -------       -------        -------

         Net pension cost             $  17,206        14,912         12,059
                                        =======       =======        =======



                                       31

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


       The following  table sets forth the directors'  retirement  plan's funded
       status and amounts recognized in the consolidated financial statements at
       June 30, 2001 and 2000:

                                                        2001           2000
                                                        ----           ----
Actuarial present value of benefit obligations:
  Vested accumulated benefits                       $ 150,414        160,932
  Non-vested accumulated benefits                      13,781          8,648
                                                      -------        -------

  Total accumulated benefits                          164,195        169,580
Effect of projected future fee increases                   -              -
                                                      -------        -------
Projected benefit obligation for service
 rendered to date                                     164,195        169,580

Unrecognized net gain                                  23,862         21,671
                                                      -------        -------
  Accrued pension cost included in other
   liabilities                                      $ 188,057        191,251
                                                      =======        =======

       A reconciliation  of the projected  benefit  obligation and fair value of
       plan assets is summarized as follows:

                                          2001                    2000
                                  ----------------------  ----------------------
                                  Projected  Plan Assets  Projected  Plan Assets
                                   Benefit       at        Benefit       at
                                  Obligation  Fair Value  Obligation  Fair Value
                                  ---------- -----------  ---------- -----------

Balance, beginning of year         $169,580           -      167,337          -
  Service cost                        5,537           -        4,062          -
  Interest cost                      12,258           -       11,998          -
  Actual return                           -           -            -          -
  Actuarial gain                     (2,780)          -        1,183          -
  Contributions                           -      20,400            -     15,000
  Benefits paid                     (20,400)    (20,400)     (15,000)   (15,000)
                                   --------    --------     --------   --------
Balance, end of year               $164,195           -      169,580          -
                                   ========    ========     ========   ========


                                                      2001    2000     1999
                                                      ----    ----     ----
       Weighted average assumptions as of June 30:
         Discount rate                                  7%      7%       7%
         Rate of directors fees increase                0%      0%       0%

NOTE 12:  Income Taxes

       SFAS No. 109 requires the Bank to establish a deferred tax  liability for
       the tax bad debt  reserves  over the base year  amounts.  The Bank's base
       year tax bad debt reserves are  $1,798,626.  The  estimated  deferred tax
       liability on such amount is  approximately  $611,000,  which has not been
       recorded in the accompanying  consolidated financial statements. If these
       tax bad debt  reserves  are used for other than loan  losses,  the amount
       will be subject to Federal income taxes at the then prevailing  corporate
       rate.



                                       32

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


       The components of net deferred tax assets (liabilities) are summarized as
follows:

                                                          2001           2000
                                                        --------       --------
Deferred tax assets:
  Provision for losses on loans
   and foreclosed real estate                           $411,972        408,664
  Accrued compensation and benefits                      113,455        119,704
  Unrealized loss on available for sale
   securities                                                  -        369,974
                                                        --------       --------

  Gross deferred tax assets                              525,427        898,342
  Valuation allowance                                          -              -
                                                        --------       --------
      Total deferred tax assets                          525,427        898,342
                                                        --------       --------

Deferred tax liabilities:
  FHLB stock dividends                                   166,566        166,566
  Purchase accounting adjustments                         10,514         51,327
  Premises and equipment, tax vs book
   accumulated depreciation                              107,020         75,975
  Installment sale                                       166,513        181,977
  Unrealized gain on available for sale securities       145,265              -
                                                        --------       --------
    Total deferred tax liabilities                       595,878        475,845
                                                        --------       --------

Net deferred tax (liabilities) assets                   $(70,451)       422,497
                                                        ========       ========

       Income taxes are summarized as follows:

                                         Year Ended June 30,
                              2001               2000               1999
                            -------            -------            -------
      Current:
         Federal          $ 726,000            661,700            482,000
         State              124,000            113,600             98,300
                            -------            -------            -------
                            850,000            775,300            580,300
                            -------            -------            -------
      Deferred:
         Federal             (8,000)           (76,800)           258,700
         State               (2,000)            (8,500)            21,000
                            -------            -------            -------
                            (10,000)           (85,300)           279,700
                            -------            -------            -------
                          $ 840,000            690,000            860,000
                            =======            =======            =======

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

                                                    Year Ended June 30,
                                                2001        2000        1999
                                              -------     -------     -------

       Tax at statutory Federal rate        $ 812,124     683,457     851,620
       Increase (reduction) in taxes
        resulting from:
         Nontaxable municipal income          (76,635)    (66,493)    (94,951)
         State tax, net of Federal benefit     83,200      69,300      83,592
         Nondeductible ESOP expenses            9,474       7,827      15,894
         Other, net                            11,837      (4,091)      3,845
                                              -------     -------     -------

       Actual provision                     $ 840,000     690,000     860,000
                                              =======     =======     =======



                                       33

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


NOTE 13: Comprehensive Income

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

                                                 Year Ended June 30,
                                             2001        2000          1999
                                          ----------  ----------    ----------
Unrealized gains (losses) on available
  for sale securities:
   Unrealized holding gains (losses)
    arising during period                 $1,403,360    (612,555)     (593,309)
   Less:  reclassification
    adjustments for (gains) losses
    realized in net income                   (11,121)     21,205        28,567
                                          ----------  ----------    ----------
   Total unrealized gains (losses)
    on securities                          1,392,239    (591,350)     (564,742)
   Income tax expense (benefit)              514,939    (212,273)     (208,954)
                                          ----------  ----------    ----------
   Net unrealized gains (losses)
    on securities                            877,300    (379,077)     (355,788)
Cumulative effect of change in
    accounting principle, net of income
    taxes of $77,942 (See Note 1)                  -           -       132,713
                                          ----------  ----------    ----------

      Other comprehensive
           income (loss)                  $  877,300    (379,077)     (223,075)
                                          ==========  ==========    ==========

       At June 30, 2001 and 2000,  accumulated other comprehensive income in the
       statement of financial  condition  consisted entirely of unrealized gains
       (losses) on available for sale investment and mortgage-backed securities.



                                       34

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


NOTE 14:  Stockholders' Equity and Regulatory Capital

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

       Quantitative   measures  established  by  regulation  to  ensure  capital
       adequacy  require  the Bank to maintain  minimum  amounts and ratios (set
       forth in the table below) of total capital and Tier I risk-based  capital
       (as defined in the regulations) to risk-weighted assets (as defined), and
       of Tier I capital (as  defined)  to average  total  assets (as  defined).
       Management believes, as of June 30, 2001, that the Bank meets all capital
       adequacy requirements to which it is subject.

       As of June  30,  2001,  the most  recent  notification  from the  Federal
       Deposit  Insurance  Corporation  categorized the Bank as well capitalized
       under the  regulatory  framework  for  prompt  corrective  action.  To be
       categorized  as well  capitalized  the Bank must  maintain  minimum total
       risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in
       the table. There are no conditions or events since that notification that
       management believes have changed the Bank's category.

       The following table summarizes the Bank's actual and required  regulatory
       capital as of June 30, 2001 and 2000:
<TABLE>
<CAPTION>

                                                                               To Be Well
                                                                               Capitalized
                                                                               Under Prompt
                                                                                Corrective
                                                          For Capital             Action
                                       Actual          Adequacy Purposes        Provisions
                                ------------------   --------------------   --------------------
                                 Amount     Ratio      Amount     Ratio       Amount     Ratio
                                -------   --------   ---------  ---------   ---------  ---------
                                                    (Dollars in Thousands)
<S>                             <C>       <C>        <C>         <C>         <C>        <C>

  As of June 30, 2001:
      Total Capital (to
        Risk-Weighted Assets)   $20,290     14.0%      $11,554    >=8.0%      $14,442   >=10.0%
      Tier I Capital (to
        Risk-Weighted Assets)    18,828     13.0%        5,777    >=4.0%        8,665   >= 6.0%
      Tier I Capital (to
        Average Assets)          18,828      8.2%        9,238    >=4.0%       11,547   >= 5.0%
  As of June 30, 2000:
      Total Capital (to
        Risk-Weighted Assets)    22,759     21.2%        8,593    >=8.0%       10,741   >=10.0%
      Tier I Capital (to
        Risk-Weighted Assets)    21,482     20.0%        4,296    >=4.0%        6,445    >=6.0%
      Tier I Capital (to
        Average Assets)          21,482     11.9%        7,229    >=4.0%        9,037    >=5.0%

</TABLE>


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

NOTE 15:  Commitments and Contingencies

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

                                       35
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999

NOTE 16:  Off-Balance-Sheet and Credit Risk

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

                                        Contract or Notional Amount
                                                   June 30,
                                             2001           2000
                                             ----           ----

       Commitments to extend credit     $8,799,461      14,297,519

       Standby letters of credit        $  195,413         116,010

       At June 30, 2001,  total  commitments to originate  fixed rate loans with
       terms in excess of one year were $4.2 million at interest  rates  ranging
       from 7.2% to 9.5%.  Commitments  to extend credit and standby  letters of
       credit   include   exposure   to  some   credit  loss  in  the  event  of
       nonperformance  of  the  customer.  The  Company's  policies  for  credit
       commitments and financial  guarantees are the same as those for extension
       of credit that are recorded in the statements of financial condition. The
       commitments  extend over varying  periods of time with the majority being
       disbursed within a thirty-day period.

       The Company grants collateralized  commercial,  real estate, and consumer
       loans to  customers  in  Southeast  Missouri.  Although the Company has a
       diversified portfolio,  loans aggregating  $110,224,204 at June 30, 2001,
       are  secured by single and  multi-family  residential  real estate in the
       Company's primary lending area.

NOTE 17:  Earnings Per Share

       The  following  table sets forth the  computations  of basic and  diluted
       earnings per common share for the year ended June 30:

                                          2001          2000           1999
                                       ----------     ---------     ---------

Numerator - net income                 $1,548,602     1,320,169     1,644,764
                                       ==========     =========     =========
Denominators
  Denominator for basic earnings
   per share -
         Weighted average shares
          outstanding                   1,229,652     1,277,562     1,334,244
         Common equivalent shares due
          to stock options under
          treasury stock method            10,507        13,496        31,793
                                       ----------     ---------     ---------
  Denominator for diluted
   earnings per share                   1,240,159     1,291,058     1,366,037
                                       ==========     =========     =========
  Basic earnings per common
   share                               $     1.26          1.03          1.23
  Diluted earnings per common
   share                               $     1.25          1.02          1.20




                                       36

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


NOTE 18:  Fair Value of Financial Instruments

       The carrying amounts and estimated fair values of the Company's financial
       instruments at June 30, 2001 and 2000, are summarized as follows:
<TABLE>
<CAPTION>

                                         2001                     2000
                               -------------------------  -------------------------
                                 Carrying      Fair        Carrying        Fair
                                  Amount       Value        Amount         Value
                               ------------  -----------  -----------  ------------
<S>                            <C>           <C>          <C>          <C>

Non-trading instruments and
 nonderivatives:
  Cash and cash equivalents    $ 10,710,122   10,710,122    4,470,373     4,470,373
  Investment and mortgage-
   backed securities
   available for sale            35,121,355   35,121,335   34,910,850    34,910,850
  Stock in FHLB of Des Moines     2,150,000    2,150,000    1,850,000     1,850,000
  Loans receivable, net         180,856,594  182,200,836  138,424,750   136,002,792
  Accrued interest receivable     1,601,830    1,601,830    1,151,557     1,151,557
  Deposits                      173,281,419  174,189,325  123,920,293   123,794,141
  Securities sold under
   agreements to repurchase       4,115,142    4,115,142            -             -
  Advances from FHLB of
   Des Moines                    37,000,000   37,840,239   37,000,000    36,940,000
  Accrued interest payable        1,139,134    1,139,134      956,386       956,386
</TABLE>

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

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

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

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

       Fair value of loans is  estimated  by  discounting  the future cash flows
       using the current rates at which similar loans would be made to borrowers
       with similar credit ratings and for the same remaining maturities.  Loans
       with  similar   characteristics   are  aggregated  for  purposes  of  the
       calculations.

       The carrying amounts of accrued interest approximate their fair values.

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

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

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

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

                                       37
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999


NOTE 19:  Condensed Parent Company Only Financial Statements

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


                        STATEMENTS OF FINANCIAL CONDITION

                                                          At June 30,
Assets                                              2001               2000
                                                ----------          ----------

Cash                                          $    551,175             167,503
ESOP note receivable                               289,187             362,060
Other assets                                        79,393             111,420
Equity in net assets of the Bank                22,699,953          20,852,378
                                                ----------          ----------
                Total assets                  $ 23,619,708          21,493,361
                                                ==========          ==========

Liabilities and Stockholders' Equity

Accrued expenses and other liabilities        $     37,220              36,774
                                                ----------          ----------
                Total liabilities                   37,220              36,774
                                                ----------          ----------

Stockholders' equity                            23,582,488          21,456,587
                                                ----------          ----------

                Total liabilities and
                 stockholders' equity         $ 23,619,708          21,493,361
                                                ==========          ==========


                              STATEMENTS OF INCOME

                                                      Year Ended June 30,
                                                2001         2000        1999
                                              ---------   ---------   ---------

Interest income                              $   40,334      90,226     116,423
Dividend from Bank                              800,000     800,000   2,300,000
Other income                                      4,606      22,376          -
                                              ---------   ---------   ---------
                                                844,940     912,602   2,416,423
Operating expenses                              198,340     189,963     193,937
                                              ---------   ---------   ---------

   Income before income taxes and
    equity in undistributed income of
    the Bank                                    646,600     722,639   2,222,486

Income taxes                                     52,155)    (34,037)    (44,017)
                                              ---------   ---------   ---------

   Income before equity in undistributed
    income of the Bank                          698,755     756,676   2,266,503

Equity in undistributed income of
 the Bank                                       849,847     563,493    (621,739)
                                              ---------   ---------   ---------
                Net income                   $1,548,602   1,320,169   1,644,764
                                              =========   =========   =========

                                       38
<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999



                            STATEMENTS OF CASH FLOWS

                                                    Year Ended June 30,
                                                2001        2000        1999
                                             ---------- ----------- -----------
Cash flows from operating activities:
       Net income                            $1,548,602   1,320,169   1,644,764
       Adjustments to reconcile net income
        to net cash provided by operating
        activities:
       Equity in undistributed income
        of the Bank                            (849,847)   (563,493)    621,739
       Other adjustments, net                    18,068      60,171      57,835
                                             ---------- ----------- -----------
                      Net cash provided by
                       operating activities     716,823     816,847   2,324,338
                                             ---------- ----------- -----------

Cash flows from investing activities:
       Principal collected on loan to ESOP       72,873      75,181      72,873
       Purchase of investment security,
        available for sale                     (100,000)          -           -
       Proceeds from sales and maturities
        of investment securities, available
        for sale                                104,581   1,034,500     999,375
       Proceeds from sales of other assets       16,500           -           -
                                             ---------- ----------- -----------

                      Net cash provided by
                       investing activities      93,954   1,109,681   1,072,248
                                             ---------- ----------- -----------

Cash flows from financing activities:
       Dividends on common stock               (615,119)   (640,700)   (657,007)
       Exercise of stock options                198,660     135,620     306,310
       Payments to acquire treasury stock       (10,646) (1,762,530) (2,803,903)
                                             ---------- ----------- -----------

                      Net cash used in
                       financing activities    (427,105) (2,267,610) (3,154,600)
                                             ---------- ----------- -----------

Net increase (decrease) in cash and
 cash equivalents                               383,672    (341,082)    241,986
Cash and cash equivalents at beginning
 of period                                      167,503     508,585     266,599
                                             ---------- ----------- -----------

Cash and cash equivalents at end of period   $  551,175     167,503     508,585
                                             ========== =========== ===========


                                       39

<PAGE>


                 SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2001, 2000 AND 1999



NOTE 20:  Quarterly Financial Data (Unaudited)

       Quarterly  operating  data for the years ended June 30 is  summarized  as
       follows (in thousands):

                                          First    Second     Third    Fourth
   2001:                                 Quarter   Quarter   Quarter   Quarter

Interest income                          $ 3,714    4,082     4,111      4,254
Interest expense                           2,221    2,393     2,413      2,463
                                          ------   ------    ------     ------

Net interest income                        1,493    1,689     1,698      1,791
Provision for loan losses                    170       60       140        140
Noninterest income                           804      204       197        242
Noninterest expense                        1,409    1,274     1,225      1,311
                                          ------   ------    ------     ------

Income before income taxes                   718      559       530        582
Income taxes                                 267      178       188        207
                                          ------   ------    ------     ------

Net income                               $   451      381       342        375
                                          ======   ======    ======     ======


                                          First    Second     Third    Fourth
   2000:                                 Quarter   Quarter   Quarter   Quarter

Interest income                         $ 2,923      2,955    3,133     3,279
Interest expense                          1,570      1,621    1,785     1,943
                                         ------    -------   ------    ------

Net interest income                       1,353      1,334    1,348     1,336
Provision for loan losses                    20         15       15       165
Noninterest income                          109        138      140       225
Noninterest expense                         825        920      936     1,077
                                         ------    -------   ------    ------

Income before income taxes                  617        537      537       319
Income taxes                                216        177      185       112
                                         ------    -------   ------    ------

Net income                              $   401        360      352       207
                                         ======    =======   ======    ======





                                       40

<PAGE>


<TABLE>
<CAPTION>

                             DIRECTORS AND OFFICERS


<S>                                          <C>
SOUTHERN MISSOURI BANCORP, INC.              SOUTHERN MISSOURI BANK AND TRUST

DIRECTORS:                                   DIRECTORS:

Thadis R. Seifert                            Samuel H. Smith
Chairman of the Board                        Chairman of the Board
Retired former executive vice president      Engineer and majority owner of
 of Bank                                      S.H. Smith and Company, Inc.

Leonard M. Ehlers                            James W. Tatum
Vice-Chairman                                Vice-Chairman
Retired court reporter of the 36th           Retired certified public accountant
 Judicial Circuit
                                             Thadis R. Seifert
Samuel H. Smith                              Retired former executive vice president
Engineer and majority owner of                of Bank
 S.H. Smith and Company, Inc.

James W. Tatum                               Ronnie D. Black
Retired certified public accountant          Executive Director General Association
                                              of General Baptists
Ronnie D. Black
Executive Director General Association       L. Douglas Bagby
 of General Baptists                         General Manager Municipal Utilities of
                                              City of Poplar Bluff
L. Douglas Bagby
General Manager Municipal Utilities of       Sammy A. Schalk
 City of Poplar Bluff                        President of Gamblin Lumber Company

Sammy A. Schalk                              Greg A. Steffens
President of Gamblin Lumber Company          President
                                             Chief Executive Officer

EXECUTIVE OFFICERS:
                                             EXECUTIVE OFFICERS:
Greg A. Steffens
President                                    Greg A. Steffens
Chief Financial Officer                      President
                                             Chief Executive Officer
James W. Tatum
Vice President                               James W. Duncan
                                             Executive Vice President
                                             Chairman Loan Department


                                             Kimberly A. Capps
                                             Chief Financial Officer

</TABLE>

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<PAGE>



                              CORPORATE INFORMATION





CORPORATE HEADQUARTERS                       TRANSFER AGENT

531 Vine Street                              Registrar and Transfer Company
Poplar Bluff, Missouri 63901                 10 Commerce Drive
                                             Cranford, New Jersey 07016



INDEPENDENT AUDITORS                         COMMON STOCK

Kraft, Miles & Tatum, LLC                    Nasdaq Stock Market
Poplar Bluff, Missouri 63901                 Nasdaq Symbol: SMBC


SPECIAL COUNSEL

Silver, Freedman & Taff, L.L.P.
Washington, D.C.




ANNUAL MEETING

The Annual Meeting of  Stockholders  will be held Monday,  October 15 , 2001, at
9:00 a.m.,  Central Time,  at the Greater  Poplar Bluff Area Chamber of Commerce
Building, 1111 West Pine, Poplar Bluff, Missouri 63901.


ANNUAL REPORT ON FORM 10-KSB AND OTHER REPORTS

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






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