SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             --------------------
                                    FORM 10-K
(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended       September 30, 1996
                          -------------------------------

                                     - OR -

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ______________________ to ______________________


SEC  File Number:  0-23620
                   -------

                         MID CONTINENT BANCSHARES, INC.
              ------------------------------------------------------
              (Exact name of Registrant as specified in its Charter)


            Kansas                               48-1146797
---------------------------------           ---------------------- 
 (State or other jurisdiction of               (I.R.S. Employer 
of incorporation or organization)           Identification Number)

124 W. Central,   El Dorado, Kansas                67042
-----------------------------------           ---------------
(Address of principal executive offices)        (Zip Code)

Registrants telephone number, including area code:            (316) 321-2700
                                                              --------------

Securities registered pursuant to Section 12(b) of the Act:        None
                                                              --------------

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.10 per share
                     ---------------------------------------
                                (Title of Class)

      Indicate by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such report(s), and (2) has been subject to such
filing requirements for the past 90 days.       Yes X No ____

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.           [ X ]

      The aggregate market value of the voting stock held by  non-affiliates  of
the  Registrant,  based upon the last sale price of such  stock on  December  5,
1996, was $39.1 million.

      As of December 5, 1996,  the  Registrant  had  2,016,750  shares of Common
Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

1.   Parts II and IV --  Portions  of the  Registrant's  1996  Annual  Report to
     Stockholders.

2.   Part III -- Portions of the Registrant's Proxy Statement for Annual Meeting
     of Stockholders to be held in January 1997.


<PAGE>



                                     PART I

Item 1. Business
(Dollars in Thousands)

General

      Mid Continent  Bancshares,  Inc.  ("Registrant" or "Company") is a unitary
savings and loan holding company that was incorporated in January 1994 under the
laws of the State of Kansas for the purpose of  acquiring  all of the issued and
outstanding common stock of Mid-Continent  Federal Savings Bank  ("Mid-Continent
Federal" or "Savings Bank"). This acquisition  occurred in June 1994 at the time
Mid-Continent  Federal changed its name from  Mid-Continent  Federal Savings and
Loan Association of El Dorado,  simultaneously  converted from a mutual to stock
institution,  and sold all of its  outstanding  capital stock to the Company and
the Company made its initial  public  offering of common stock.  As of September
30, 1996, the Company had total assets of $340,186,  total deposits of $214,493,
and  stockholders'  equity of $36,807 or 10.8% of total assets  under  generally
accepted accounting  principles ("GAAP").  The only subsidiary of the Company is
the Savings Bank. The Savings Bank has one subsidiary, Laredo Investment, Inc.

     Mid-Continent  Federal is a federally  chartered capital stock savings bank
located in El Dorado,  Kansas.  The Savings Bank was founded in 1925 as a Kansas
chartered savings and loan association under the name Mid-Continent  Savings and
Loan  Association.  In 1935,  the  Savings  Bank  adopted a federal  charter and
changed its name to  Mid-Continent  Federal  Savings and Loan  Association of El
Dorado (the  "Association").  In June 1994,  the  Association  converted  from a
federally  chartered  mutual savings and loan association to its current form, a
federally  chartered capital stock savings bank subsidiary of a savings and loan
holding  company.  The Savings  Bank's  deposits  are  federally  insured by the
Federal Deposit Insurance Corporation ("FDIC").

      The Company  directs and plans the  activities  of the Savings  Bank,  the
Company's  primary asset.  The Company's  business  activities to date have been
limited to its  investment in the Savings  Bank,  loans made to the Savings Bank
for  use  in the  normal  course  of  the  Savings  Bank's  business  and to the
Mid-Continent Federal Savings Bank Employee Stock Ownership Plan (the "ESOP") to
enable the ESOP to purchase shares of the Company's  common stock in the initial
public  offering and the  repurchase  of a portion of the  Company's  stock,  as
permitted by the Office of Thrift Supervision. References to the Company include
the Savings Bank, unless the context otherwise indicates.

      The Company is primarily  engaged in attracting  deposits from the general
public  and  using  those  funds to  originate  and sell  real  estate  loans on
one-to-four family residences and, to a lesser extent, to originate consumer and
construction  loans for its portfolio.  The Company also  purchases  one-to-four
family  residential  loans.  The  Company  has  offices  in El  Dorado,  Newton,
Winfield,  Augusta and Wichita,  Kansas, which are located in its primary market
area of Butler, Cowley, Sedgwick and Harvey Counties in the State of Kansas. The
Company  opened one full  service  branch in Wichita in 1996 and expects to open
another in 1997. A full service branch

                                       2
<PAGE>

was opened in October, 1996 in Winfield, Kansas, to compliment the existing full
service  branch in that city.  The new  branch is located in the local  Dillon's
supermarket  and will  maintain  extended  hours to serve its customer  base. In
addition,  the Company  invests in  mortgage-related  securities  and investment
securities.  The Company offers its customers  fixed-rate,  and  adjustable-rate
mortgage loans ("ARM"),  as well as FHA/VA loans and consumer  loans,  including
home  equity and  savings  account  loans.  Adjustable-rate  mortgage  loans and
short-term  fixed-rate  mortgage loans generally are originated for retention in
the Company's portfolio while long-term  fixed-rate mortgage loans are generally
sold into the secondary market. All consumer loans are retained in the Company's
portfolio.

      The principal  sources of funds for the Company's  lending  activities are
deposits and the amortization, repayment and maturity of loans, mortgage-related
securities,  and investment securities and borrowings from the Federal Home Loan
Bank.   Principal   sources   of  income  are   interest   and  fees  on  loans,
mortgage-related  securities,  investment securities, and deposits held in other
financial  institutions.  The  Company's  principal  expense is interest paid on
deposits.

      The Company is actively engaged in the purchase and sale of mortgage loans
through a correspondent  network.  These purchased loans and loans originated by
the Company are then sold, generally without recourse, into the secondary market
with the  Company  generally  retaining  the  servicing  rights.  The Company is
contingently  liable on certain loans sold with recourse.  The principal balance
of loans sold with recourse totalled approximately $127 and $ - 0 - at September
30, 1995 and September 30, 1996, respectively.

      The Company has striven to increase  its other  income by  increasing  its
portfolio  of loans  serviced  for others.  The  Company  expects to continue to
increase the size of its portfolio of loans serviced for others.  This portfolio
totalled  approximately  $1,229,153 as of September  30, 1996.  Income from loan
servicing fees, net of amortization and before operating expenses,  has provided
a substantial portion of net income in recent years and totalled $3,128,  before
income tax, for the fiscal year ended September 30, 1996.

      The  counties  of Butler,  Cowley,  Sedgwick  and  Harvey,  Kansas are the
Company's  primary  market area for  deposits  and are located in south  central
Kansas. This area was founded on agriculture and the oil and gas industry, which
continue  to play a major role in the  economy.  This area has also  attracted a
variety of industries  including  aircraft,  recreational and camping equipment,
balloon plant,  meat  processing,  refineries,  state and private  universities,
junior  colleges,  electronics  manufacturing,  and heating and air conditioning
equipment  manufacturing.  This area also  includes the health  care,  financial
service,  and other service related industries,  including the  wholesale/retail
trade industries.  Also, within Butler County are located two state prisons. The
largest employment sectors in the Company's market area are aircraft, industrial
manufacturing, and retail.

                                       3
<PAGE>



Asset and Liability Management

      Although  the  Company's  dependence  upon net  interest  income  has been
greatly  reduced  during the past  several  years as a result of the increase in
sources of other income  obtained  through its mortgage  banking  operation  and
purchases  of  mortgage  servicing  rights  ("MSR"),   the  income  from  retail
operations  and  assets  held in  portfolio  still  depends  primarily  upon net
interest  income.  The  ability  to  maximize  net  interest  income is  largely
dependent upon the  achievement  of a positive  interest rate spread that can be
sustained  during  fluctuations  in  prevailing  interest  rates.  Interest rate
sensitivity is a measure of the difference  between amounts of  interest-earning
assets and interest-bearing  liabilities which either reprice or mature within a
given period of time.  The  difference,  or the interest rate  repricing  "gap,"
provides an  indication  of the extent to which an  institution's  interest rate
spread will be affected  by changes in interest  rates over a period of time.  A
gap is considered  positive when the amount of  interest-rate  sensitive  assets
maturing  or  repricing  over a specified  period of time  exceeds the amount of
interest-rate sensitive liabilities maturing or repricing within that period and
is considered  negative when the amount of interest-rate  sensitive  liabilities
maturing  or  repricing  over a specified  period of time  exceeds the amount of
interest-rate  sensitive  assets  maturing  or  repricing  within  that  period.
Generally,  during a period of rising  interest  rates,  a negative gap within a
given  period of time  would  adversely  affect  net  interest  income,  while a
positive  gap within a given  period of time would  result in an increase in net
interest  income;  during a period of falling  interest  rates,  a negative  gap
within a given period of time would result in an increase in net interest income
while a  positive  gap within a given  period of time  would  have the  opposite
effect.  At September 30, 1996, the Company's one year and three year cumulative
interest  sensitivity  gap as a percentage of total assets was a negative 23.85%
and a negative 25.36%, respectively.

     In an effort to reduce  interest rate risk and protect it from the negative
effect of increases in interest rates, the Company has instituted  certain asset
and liability management measures.  This strategy includes the following primary
elements: (i originating and purchasing long-term fixed-rate loans only for sale
in the secondary  mortgage  market,  (ii) maintaining a high percentage of total
assets in  short-term  securities  and other  liquid  assets,  (iii)  increasing
sources of other income,  such as gain on sale of loans and loan servicing fees,
(iv)  increasing  its ARM and  short-term  fixed  rate  loan  portfolio  and (v)
building a loan servicing  portfolio whose market value floats  inversely to the
movement of interest rates. A loan servicing  portfolio becomes more valuable as
the "turnover" in the mortgage loans slows.  Mortgage loans traditionally become
more  seasoned  and  turnover  less as  interest  rates rise.  Therefore,  after
interest rates rise, the value of a loan servicing portfolio generally increases
(assuming  credit  quality is  maintained),  causing the opposite  effect to the
value of the Company's loans and investments.

      Certain risks are inherent in the business of mortgage banking. There is a
risk that the Company will not be able to sell all the loans that it  originates
or  purchases  or,  conversely,  that the Company  will be unable to fulfill its
contractual  commitment  to deliver  loans.  In  addition,  in periods of rising
interest  rates,  loans  originated  or  purchased by the Company may decline in
value.  Exposure to interest rate risk is significant  during the period between
the  time  the  interest  rate on a  customer's  mortgage  loan  application  is
established  and the time the mortgage  loan 

                                       4
<PAGE>

closes,  and also  during  the  period  between  the time the  interest  rate is
established and the time the Company commits to sell the loan. If interest rates
change in an unanticipated  fashion,  the actual  percentage of loans that close
may differ from projected percentages.  The resultant mismatching of commitments
to close loans and  commitments to deliver sold loans may have an adverse effect
on the  profitability of loan originations in any such period. A sudden increase
in  interest  rates  can  cause a higher  percentage  of  loans  to  close  than
projected.  To the degree that this was not  anticipated,  the Company  will not
have made commitments to sell these  additional loans and may incur  significant
mark to market losses,  adversely  affecting results of operations.  In order to
minimize  these  risks,  it is the policy of the Company to cover  approximately
70%-75% of the loans that it has  originated or purchased  with sales  contracts
with third parties.  A mortgage banker that is unable to fulfill its commitments
to deliver  mortgage  loans to third  parties  will be subject to the payment of
fees  and  monetary  penalties  as well  as the  loss  of  business  reputation.
Management  attempts to adequately  cover its delivery  commitments  by limiting
such  commitments  to 70%-75% of the aggregate  amount of loans held for sale or
committed for  origination  or purchase plus a percentage of the aggregate  loan
applications  received.  However,  the  risk  associated  with  failing  to meet
delivery  commitments  cannot be  eliminated  due to the  variables  created  by
changes in market  conditions and other  factors.  Commitments to sell loans are
considered when assessing the lower of cost or market valuation of the Company's
loans held for sale portfolio.

Gap Table

      The following table sets forth the amount of  interest-earning  assets and
interest-bearing  liabilities  outstanding  at  September  30,  1996,  which are
expected  to reprice  or mature in each of the future  time  period  shown.  The
amount  of  assets  or  liabilities  shown  which  reprice  or  mature  during a
particular  period  were  determined  by the  contractual  terms of the asset or
liability. The table assumes prepayments and scheduled principal amortization of
fixed-rate loans and  mortgage-related  securities,  and assumes that adjustable
rate  mortgage  loans  will  reprice  at  contractual  repricing  intervals.  No
consideration  has been provided for the impact of future  commitments and loans
in process.

                                       5

<PAGE>

<TABLE>
<CAPTION>

                                                 Within      Over 1-3     Over 3-5      Over
                                                One Year      Years         Years      5 Years      Total
                                                 Amount       Amount       Amount       Amont      Amount
                                                --------     ---------    ---------    -------     ------
                                                                (Dollars in Thousands)
Interest-earning assets:
<S>                                             <C>           <C>         <C>         <C>        <C>     
   Mortgage loans and MRS (1)                   $100,046      $61,843     $19,905     $31,256    $213,050
   Other loans                                     3,086        1,944         701         478       6,209
   Investment securities (2)                      12,765       11,377           -      70,344      94,486 
                                                --------     --------    --------     -------     ------- 
      Total interest-earning securities          115,897       75,164      20,606     102,078     313,745 
                                                --------     --------    --------     -------     ------- 
Interest-bearing liabilities:
   Non-interest-bearing deposits                  10,074        7,512       2,928       1,870      22,384
   Demand and NOW accounts                        10,524        1,760       1,163         954      14,401
   Savings accounts                                6,564          597         431       1,098       8,690
   Money market deposit accounts                   9,100        2,007         782         498      12,387
   Certificates of deposit                        97,575       49,930       3,335       5,791     156,631
   FHLB advances                                  63,200       18,500           -           -      81,700 
                                                --------     --------    --------     -------     ------- 
      Total interest-bearing liabilities         197,037       80,306       8,639      10,211     296,193 
                                                --------     --------    --------     -------     ------- 

Interest sensitivity gap                        ($81,140)     ($5,142)    $11,967     $91,867     $17,552 
                                                ========     ========    ========     =======     ======= 
Cumulative interest sensitivity gap             ($81,140)    ($86,282)   ($74,315)    $17,552     $17,552 
                                                ========     ========    ========     =======     ======= 

Ratio of interest-earning assets to
 interest-bearing liabilities                      58.82%       93.60%     238.52%     999.69%     105.93%
                                                ========     ========    ========     =======     ======= 

Ratio of cumulative gap to total assets           (23.85%)     (25.36%)    (21.85%)      5.16%       5.16%
                                                ========     ========    ========     =======     ======= 

</TABLE>

-------------------------------
(1)  Includes loans held for sale. Mortgage-related securities are identified as
     "MRS".
(2)  Includes investment securities, FHLB stock, FHLB stock and interest-earning
     deposits in banks.


      Certain  shortcomings are inherent in the method of analysis  presented in
the table above.  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 may lag behind  changes in market
rates.  Additionally,  certain assets,  such as adjustable-rate  mortgage loans,
have features  which restrict  changes in interest  rates on a short-term  basis
over the life of the asset. Further, in the event of a change in interest rates,
prepayment  levels  and  decay  rates  on core  deposits  would  likely  deviate
significantly from those assumed in calculating the table.

      The  Company's  analysis  of its  interest-rate  sensitivity  incorporates
certain   assumptions   concerning   the   amortization   of  loans   and  other
interest-earning  assets and the  repricing  characteristics  of  deposits.  The
Company  has made the  following  assumptions  in  calculating  the value on the
above-referenced  table:  adjustable-rate  mortgage loans have prepayments rates
ranging from 10 to 31%; fixed-rate mortgage loans have a prepayment rate that is
constant  through time but varies from 5% for lower  contractual  interest  rate
loans to 37% for higher  

                                       6

<PAGE>

contractual  interest rate loans;  consumer loans have prepayment  rates ranging
from 4 to 17%; core savings  deposits have a  decreasing decay rate through time
ranging  from 100%  almost  immediately  to 15% after  one  year;  NOW  checking
deposits  have a   decreasing  decay rate  through time ranging from 100% almost
immediately to 19% after one year; and money market  deposits have a  decreasing
decay rate through time  ranging from 100% almost  immediately  to 38% after one
year.  The  interest-rate  sensitivity of the Company's  assets and  liabilities
illustrated in the table could vary substantially if different  assumptions were
used or if actual experience differs from the assumptions used.

      As discussed above and as shown in the preceding gap table and the average
balance  sheet and  rate/volume  analysis  contained in the annual  report,  the
Bank's net interest  rate risk  consists of risks from the numerous time periods
for maturity or  repricing  of  particular  assets or  liabilities  and from the
numerous  interest  rates  that vary over time and  because of the  maturity  or
repricing  of the  underlying  assets or  liabilities.  These risks  necessarily
impact net interest  income.  One impact on net interest income results from the
interest rate margin (net yield on interest bearing assets).

Lending Activities

      General.  The Company's  loan  portfolio  consists of fixed-rate  mortgage
loans and adjustable-rate  mortgage loans ("ARMs") secured by one-to-four family
residences  and, to a much lesser extent,  commercial  real estate,  mobile home
loans,  and real estate  construction  loans.  As of  September  30,  1996,  the
Company's total  portfolio of loans (the "loan  portfolio") was $171,158 (net of
loans in process,  deferred fees and costs and  allowance  for loan losses),  of
which $176,882,  or 103.4%,  was secured by one-to-four  family residential real
estate, $890, or 0.5%, was secured by commercial real estate, and $305, or 0.2%,
was secured by mobile homes.  The following table sets forth  information  about
the company's loan portfolio at September 30 of each year presented.


                                       7

<PAGE>

<TABLE>
<CAPTION>


                                            1992              1993                 1994              1995                1996
                                    ------------------  ----------------   -----------------   ------------------ ------------------
                                       $          %         $       %           $       %         $         %         $        %
                                    -------     ------  -------   ------   --------   ------   -------    ------- --------   -------
TYPE OF LOANS:
Real Estate Loans
<S>                                 <C>        <C>      <C>       <C>      <C>       <C>      <C>        <C>      <C>       <C>    
   Residential                      $73,295     93.3%   $53,727    94.89%  $ 96,906   94.79%  $ 11,216    93.93%  $159,672   93.29 %
   Construction                       2,604     3.32%       569     1.00%     6,976    6.82%    10,351     8.29%    17,367   10.15 %
   Commercial                         2,215     2.82%     1,809     3.19%       922    0.90%     1,212     0.97%       964    0.56 %
   Lane                                 126     0.16%        67     0.12%        86    0.08%       599     0.45%        49    0.03 %
Consumer Loans
   Mobile home loans                  1,210     1.55%       931     1.6 %       716     0.7%       499     0.40%       305    0.18 %
   Savings account loans                482     0.61%       479     0.85%       699    0.68%       688     0.55%       769    0.45 %
   Home improvement loans             1,478     1.88%     1,031     1.82%       873    0.85%       414     0.33%     1,012    0.59 %
   Automobile loans                      96     0.12%        31     0.05%       682    0.67%     1,050     0.84%     1,115    0.65 %
   Other                                237     0.30%       182     0.32%       225    0.22%       507     0.41%       890    0.52 %
                                     ------   ------      ------  ------    -------  ------    -------   ------    -------  ------ 
      Total                          81,743   104.09%    58,826   103.89%   108,085  105.71%   132,536   106.20%   182,143  106.42 %

Less:
   Loans in process                  (1,890)   (2.41%)    (1,036)  (1.83%)   (4,581)  (4.49%)   (6,624)   (5.30%)  (10,407)  (6.08%)
   Deferred loan origination
    fees and costs                   (1,039)   (1.32%)      (821)  (1.53%)     (987)  (0.97%)     (693)   (0.56%)     (157)  (0.09%)
   Allowance for loan losses           (283)   (0.36%)      (346)  (0.61%)     (274)   0.27%      (423)   (0.34%)     (421)  (0.25%)
                                     ------   ------      ------  ------    -------  ------    -------   ------    -------  ------ 
Total loans, net                    $78,530   100.00%    $56,623  100.00%  $102,243  100.00%  $124,796   100.00%  $171,158  100.00%
                                     ======   ======      ======  ======     ======  ======     ======   ======     ======  ====== 
Total mortgage-related securities,
    net                             $60,804   100.00%    $42,856  100.00%  $ 45,030  100.00%   $40,004   100.00%  $ 34,383  100.00%
                                     ======   ======      ======  ======     ======  ======     ======   ======     ======  ====== 

TYPE OF SECURITY:
Residential real estate 
   1 to 4 family                     74,914    95.39%     53,900   95.19%   103,607  101.34%   127,567   102.22%   176,882  103.35%
   Other dwelling units                 985     1.26%        396    0.70%       275    0.27%       254     0.20%       231    0.13%
Commercial real estate                2,215     2.82%      1,809    3.19%       922    0.90%       958     0.77%       890    0.52%
Land                                    126     0.16%         67    0.12%        86    0.08%       599     0.48%        49    0.03%
Consumer loans
   Mobile homes                       1,210     1.55%        931    1.64%       716    0.70%       499     0.40%       305    0.18%
   Savings accounts                     482     0.61%        479    0.85%       699    0.68%       688     0.55%       769    0.45%
   Home improvement                   1,478     1.88%      1,031    1.82%       873    0.85%       414     0.33%     1,012    0.59%
   Automobiles                           96     0.12%         31    0.05%       682    0.67%     1,050     0.84%     1,115    0.65%
   Other                                237     0.30%        182    0.32%       225    0.22%       507     0.41%       890    0.52%
                                     ------   ------      ------  ------    -------  ------    -------   ------    -------  ------ 
      Total                          81,743   104.09%     58,826  103.89%   108,085  105.71%   132,536   106.20%   182,143  106.42%

Less:
Loans in process                     (1,890)   (2.41%)    (1,036)  (1.83%)   (4,581)  (4.49%)   (6,624)   (5.30%)  (10,407)  (6.08%)
Deferred loan origination fees
    and costs                        (1,039)   (1.32%)      (821)  (1.53%)     (987)  (0.97%)     (693)   (0.56%)     (157)  (0.09%)
Allowance for loan losses              (283)   (0.36%)      (346)  (0.61%)     (274)  (0.27%)     (423)   (0.34%)     (421)  (0.25%)
                                     ------   ------      ------  ------    -------  ------    -------   ------    -------  ------ 
Total loans, net                    $78,531   100.00%    $56,623  100.00 % $102,243  100.00%  $124,796   100.00%  $171,158  100.00%
                                     ======   ======      ======  ======    =======  ======    =======   ======    =======  ====== 
Total mortgage-related securities,
    net                             $60,804   100.00%    $42,856  100.00 % $ 45,030  100.00%  $ 40,004   100.00%  $ 34,383  100.00%
                                     ======   ======      ======  ======    =======  ======    =======   ======    =======  ====== 

</TABLE>


                                       8

<PAGE>


Loan Maturity. The following table sets forth the maturity of the Company's loan
portfolio  at  September  30, 1996.  The table does not include  prepayments  or
scheduled principal  repayments.  Prepayments and scheduled principal repayments
on loans  totalled  $18,580,  $30,688,  and  $44,858,  for the three years ended
September 30, 1994, 1995 and 1996, respectively.  Adjustable-rate mortgage loans
are shown as maturing based on contractual maturities.


<TABLE>
<CAPTION>
                                                          Multi-
                                        1-4 Family      Family and
                                        Real Estate     Commercial
                                         Mortgage       Real Estate    Construction    Consumer      Total 
                                        -----------     -----------    ------------    --------      -----
                                                                   (In thousands)
Amounts Due:
<S>                                     <C>              <C>              <C>          <C>         <C>     
Within 1 year                               $221            $29           $17,210      $  834      $ 18,294
                                        --------         ------           -------      ------      --------

After 1 year
   1 to 5 years                            1,139            334               157       3,272         4,902
  Over 5 years                           156,136            650                         2,161       158,947 
                                        --------         ------           -------      ------      --------
Total due after one year                 157,275            984               157       5,433       163,849 
                                        --------         ------           -------      ------      --------
Total amount due                        $157,496         $1,013           $17,367      $6,267      $182,143
                                        ========         ======           =======      ======  

Less
Allowance for loan loss                                                                                (421)
Loans in process                                                                                    (10,407)
Deferred loan origination fees
 and cost                                                                                              (157)
                                                                                                    -------
      Loans receivable, net                                                                         171,158 
                                                                                                    =======
</TABLE>


     The  following  table sets  forth the dollar  amount of all loans due after
September  30,  1997,  which have  predetermined  interest  rates and which have
floating or adjustable interest rates.



                                                   Floating or
                                       Fixed       Adjustable
                                       Rates          Rates          Total
                                       -----       -----------       -----
                                                  (In Thousands)
One-to-four family                    $49,213          $108,062    $157,275
Multi-family and Commercial
  real estate                             647               337         984
Construction                              157                           157
Consumer                                4,606               827       5,433 
                                      -------          --------    --------
      Total                           $54,623          $109,226    $163,849
                                      =======          ========    ========



                                       9

<PAGE>



      The following table sets forth the contractual maturities of the Company's
mortgage-backed securities portfolio as of September 30, 1996.

           Contractual Maturities Due In Year(s) Ended September 30,

                                   2000 to     2002 to       2007 and
  1997         1998      1999        2001        2006       Thereafter    Total
  ----         ----      ----      -------     -------      ----------    -----

 $2,430         $0      $1,510      $4,236       $176        $26,031     $34,383



      Residential  Loans. The Company's primary lending activity consists of the
origination of one-to-four family,  owner-occupied,  residential  mortgage loans
secured by property  located in the Company's  primary market area. At September
30,  1996,  the  Company  had  $176,882,  or 103.3%,  of its net loan  portfolio
invested in these  loans.  Management  believes  that this policy of focusing on
one-to-four  family lending has been effective in  contributing  to net interest
income while reducing credit risk by keeping loan  delinquencies and losses to a
minimum.

      The  Company  offers  ARMs that  adjust  every one to three years and have
terms from 10 to 30 years, as well as ARMs that adjust annually,  but only after
the third year. One year ARMs have  adjustments  that are limited to 2% per year
and 6% over the life of the loan,  and ARMs  that are fixed for the first  three
years and adjust annually thereafter have adjustments that are limited to 2% per
year and 5% over the life of the loan.  The  Company  also  offers  conventional
fixed-rate  mortgage  loans  with  terms  from 10 to 30  years.  Generally,  the
interest rates on ARMs are based on treasury bill indices. The Company considers
the market  factors  and  competitive  rates on loans as well as its own cost of
funds when  determining the rates on the loans that it offers.  The Company also
has a network of  correspondents  from whom the  Company  may be  referred  both
fixed- and  adjustable-rate  real estate mortgage loans.  The Company expects to
expand its purchases and sales of mortgage loans,  subject to market conditions.
Since  1989,  the Company has sold most of its  originated  fixed-rate  mortgage
loans into the secondary market. The Company does, however,  service most of the
loans sold since 1991.

      Generally, during periods of rising interest rates, the risk of default on
an ARM is considered to be greater than the risk of default on a fixed-rate loan
due to the upward  adjustment of interest costs to the borrower.  To help reduce
such risk, the Company qualifies the loan at the fully indexed interest rate, as
opposed to the original  interest  rate. ARM loans may be made at up to 95% loan
to value ratio. The Company does not originate ARMs with negative amortization.

      Regulations  limit  the  amount  which a savings  association  may lend in
relationship  to the  appraised  value of the real estate  securing the loan, as
determined  by an appraisal at the time of loan  origination.  Such  regulations
permit a maximum  loan-to-value  ratio of 100% for residential

                                       10
<PAGE>

property  and 90%  for all  other  real  estate  loans.  The  Company's  lending
policies, however, generally limit the maximum loan-to-value ratio to 80% of the
appraised  value of the property,  based on an independent  or staff  appraisal.
When  the  Company  makes a loan in  excess  of 80% of the  appraised  value  or
purchase price,  private mortgage  insurance is required for at least the amount
of the loan in excess of 80% of the appraised value. The Company  generally does
not make conventional mortgage loans in excess of 95% of the appraised value.

      The loan-to-value ratio, maturity, and other provisions of the residential
real  estate  loans  made by the  Company  reflect  the  policy of making  loans
generally below the maximum limits permitted under applicable  regulations.  The
Company  requires  an  independent  appraisal,  title  insurance,  flood  hazard
insurance (if  applicable),  and fire and casualty  insurance on all  properties
securing real estate loans made by the Company.  The Company  reserves the right
to approve  the  selection  of which title  insurance  companies'  policies  are
acceptable to insure the real estate in the loan transactions.

      While  one-to-four  family  residential  real  estate  loans are  normally
originated with 10-30 year terms,  such loans typically  remain  outstanding for
substantially  shorter  periods.  This is because  borrowers  often prepay their
loans in full upon sale of the property  pledged as security or upon refinancing
the original loan. In addition,  substantially  all of the  fixed-interest  rate
loans in the Company's loan portfolio contain due-on-sale clauses providing that
the Company may declare the unpaid  amount due and payable  upon the sale of the
property  securing the loan. The Company enforces these  due-on-sale  clauses to
the extent permitted by law. Thus, average loan maturity is a function of, among
other  factors,  the level of  purchase  and sale  activity  in the real  estate
market,  the  prevailing  interest  rates,  and the  interest  rates  payable on
outstanding loans.

      Multi-Family Loans. The Company does not presently originate  multi-family
loans.  The  existing  portfolio,  $231 at  September  30,  1996,  consisted  of
permanent  loans  secured  by  apartments.   Multi-family  loans  are  generally
considered  to have more credit risk than  traditional  single  family  mortgage
loans.

      Construction  Loans.  As of September 30, 1996, the Company had $17,367 of
construction  loans or 10.2% of the Company's total loan portfolio.  The Company
originates  construction loans within its market area for custom homes built for
specific  borrowers.  The Company also originates  construction  loans for homes
being built by professional  builders for which a final retail purchaser has not
yet been identified. Construction financing is generally considered to involve a
higher  degree of risk of loss than  long-term  financing on improved,  occupied
real estate.  Risk of loss on a construction  loan is dependent largely upon the
accuracy  of the initial  estimate  of the  property's  value at  completion  of
construction  or  development  and the estimated  cost  (including  interest) of
construction. During the construction phase, a number of factors could result in
delays and cost  overruns.  If the estimate of  construction  costs proves to be
inaccurate,  the  Company may be  required  to advance  funds  beyond the amount
originally committed to permit completion of the development. If the estimate of
value proves to be inaccurate, the Company may be confronted, at or prior to the
maturity of the loan,  with a project having a sales value which is insufficient
to assure  full  repayment.  Construction  loans  originated  for homes built by
professional  builders for which the ultimate  purchaser has not been identified

                                       11

<PAGE>


have the increased risk that the builder may be unable to locate a purchaser and
may be unable to continue funding the monthly interest and principal expense.

      Consumer  Loans.  Mid-Continent  views  consumer  lending as an  important
component of its business  operations  because  consumer  loans  generally  have
shorter terms and higher yields,  thus reducing  exposure to changes in interest
rates. In addition,  the Company believes that offering  consumer loans helps to
expand and create stronger ties to its customer base. Consequently,  the Company
intends to increase its consumer lending by marketing consumer loans to existing
and potential customers.  All branches are now able to originate consumer loans.
Regulations permit federally chartered savings  associations to make secured and
unsecured  consumer loans up to 35% of the Company's  assets.  In addition,  the
Company has lending  authority  above the 35% limit for certain  consumer loans,
such as home improvements loans and loans secured by savings accounts.

      Consumer  loans  consist of personal  unsecured  loans,  home  improvement
loans,  automobile loans, mobile home loans, and savings account loans, at fixed
rates. Of these consumer loans, as of September 30, 1996, approximately $305, or
0.2% of the Company's total loan portfolio consisted of mobile home loans. These
mobile home loans were obtained in 1986.  The Company does not originate  mobile
home loans and  expects  that the size of the mobile  home loan  portfolio  will
continue to decline as outstanding  loans are repaid.  As of September 30, 1996,
total consumer loans  aggregated  $4,091,  or 2.39% of the Company's  total loan
portfolio.

      The  underwriting  standards  employed by the Company for  consumer  loans
include a determination of the applicant's payment history on other debts and an
assessment  of  liability  to meet  existing  obligations  and  payments  on the
proposed loan. In addition, the stability of the applicant's monthly income from
primary   employment   is   considered   during   the   underwriting    process.
Creditworthiness  of the  applicant is of primary  consideration;  however,  the
underwriting  process also includes a comparison of the value of the security in
relation to the proposed loan amount.

      Consumer loans entail  greater  credit risk than do  residential  mortgage
loans, particularly in the case of consumer loans which are unsecured or secured
by assets that depreciate rapidly, such as automobiles, mobile homes, boats, and
recreational  vehicles.  In such cases,  repossessed  collateral for a defaulted
consumer  loan  may  not  provide  an  adequate  source  of  repayment  for  the
outstanding  loan and the remaining  deficiency  often does not warrant  further
substantial  collection  efforts  against the borrower.  In particular,  amounts
realizable on the sale of repossessed  automobiles may be significantly  reduced
based  upon the  condition  of the  automobiles  and the lack of demand for used
automobiles.  The Company adds a general  provision  to its  consumer  loan loss
allowance,  based on general  economic  conditions,  prior loss  experience  and
management's periodic evaluation.

      Commercial  Real Estate Loans.  The Company does not  presently  originate
commercial real estate loans. The existing portfolio,  $964, or 0.5% of the loan
portfolio as of  September  30, 1996,  consisted of permanent  loans  secured by
small office buildings, churches and other non-residential buildings. Commercial
real estate secured loans were, in the past,  originated in 

                                       12

<PAGE>



amounts up to 80% of the appraised  value of the property.  Such appraised value
was determined by an independent appraiser previously approved by the Company.

      Loans secured by commercial real estate generally involve a greater degree
of risk than  residential  mortgage loans and carry larger loan  balances.  This
increased   credit  risk  is  a  result  of  several   factors,   including  the
concentration  of  principal  in a limited  number of loans and  borrowers,  the
effects of general economic  conditions on income  producing  properties and the
increased  difficulty  of  evaluating  and  monitoring  these  types  of  loans.
Furthermore,  the  repayment  of loans  secured  by  commercial  real  estate is
typically  dependent  upon the  successful  operation of the related real estate
project. If the cash flow from the project is reduced, the borrower's ability to
repay the loan may be impaired. As of September 30, 1996, the largest commercial
real estate loan had a balance of $229 and was performing in accordance with its
terms.

      Loan Solicitation and Processing for Portfolio Loans. The Company's source
of mortgage loan applications is referrals from existing or past customers, real
estate  brokers,  call-in  and  walk-in  customers,  and also as the  result  of
advertising.  The Company has, in the past,  added to its portfolio  some of the
adjustable-rate loans and shorter term fixed-rate loans and, to a lesser extent,
some of the short term balloon  loans  obtained from the  correspondent  network
that the Company uses for its mortgage banking operations.

      All loans are underwritten and approved, or denied, by the loan committee,
including loans obtained through the  correspondent  network.  All single-family
loans approved by the loan committee are ratified by the Board of Directors.

      The Company uses  independent  fee  appraisers on all real estate  related
transactions  that are  originated  in the  branches of the Company and for each
purchased  loan.  Each fee  appraiser  used must be  licensed  and  approved  by
Mid-Continent's  Board  of  Directors.  Each  purchased  loan  is  reviewed  and
underwritten as if Mid-Continent  were originating the loan. It is the Company's
policy to obtain title and fire and casualty  insurance for all mortgage  loans.
If appropriate, flood insurance is also required.

      Loan  Solicitation  and Processing for Mortgage  Banking  Operations.  The
Company solicits fixed- and adjustable-rate  mortgage loans through a network of
approximately  110  correspondents  located  primarily in Kansas and to a lesser
extent in Oklahoma for sale in the secondary mortgage market.

      The Company regularly advises its  correspondents of the rates it will pay
to purchase mortgage loans. All loans are underwritten and approved,  or denied,
by the loan committee. All single family loans are reviewed and approved by both
the loan  committee and the Board of Directors.  The Company issues a commitment
letter by which the Company will extend the offer of a particular rate and terms
for a period of up to 60 days.  The Company's  correspondents,  typically  other
financial institutions, close the loan in the name of the correspondent and sell
the loan to the Company based on the terms previously established for the loan.

                                       13

<PAGE>


      The Company  generally retains the servicing rights to the loans it sells.
The Company also sells mortgage loans originated through referrals from existing
or past customers,  real estate brokers, call-in and walk-in customers, and also
as the result of advertising.

Origination, Purchase and Sale of Loans

      During the fiscal year ended September 30, 1996, the Registrant originated
$107,713  in loans,  purchased  $183,845  in loans (all  secured by  one-to-four
family  residences),  and sold  $205,290  in loans  (including  $88,413 of loans
securitized primarily through GNMA).

      Loan Sales.  The Company  currently sells most of its fixed-rate  mortgage
loan originations to FNMA, GNMA, FHLMC and private secondary market  purchasers.
The Company does not have  separate  underwriting  policies for loans to be sold
and loans to be retained.  Loans originated for sale are  underwritten  with the
same  standards  used to originate  loans to be retained in the  Company's  loan
portfolio.  The Company pools its FHA and VA loans into GNMA pools that are then
sold.  Mortgage loans are typically  sold with retention of servicing  rights by
the Company but generally without recourse.

      Loan  Commitments.  The Company  issues  written,  formal  commitments  to
prospective borrowers on all real estate approved loans. The commitment requires
acceptance within 60 days of the date of issuance. As of September 30, 1996, the
Company had $63,743 of commitments to originate  mortgage loans. The Company has
commitments to sell, with servicing rights retained,  $28,345 of these loans and
the intent to add $16,513 of these loans to its  investment in loans  receivable
to be held to maturity.

      Loan  Processing  and Servicing  Fees.  In addition to interest  earned on
loans, the Company  recognized fees and service charges which consist  primarily
of fees on loans serviced for others.  The Company recognized net loan servicing
fees of $1,790,  $3,102, and $3,128,  before operating  expenses,  for the years
ended  September 30, 1994,  1995,  and 1996,  respectively.  As of September 30,
1996, loans serviced for others totalled approximately  $1,229,153.  The Company
has a strategy in place to expand the amount of loans serviced for others.  This
strategy  requires the increase in both loans originated by the Company and sold
into the  secondary  market with  servicing  retained as well as the purchase of
loans  originated  out of Kansas for the purpose of resale with retention of the
servicing rights.

      Loans to One  Borrower.  Regulations  limit  loans to one  borrower  in an
amount  equal to (i) 15% of  unimpaired  capital  and  retained  earnings  on an
unsecured basis and an additional amount equal to 10% of unimpaired  capital and
retained  earnings  if the loan is  secured  by  readily  marketable  collateral
(generally,  financial instruments,  not real estate) or (ii) $500, whichever is
higher.  The Company's  maximum  loan-to-one  borrower  limit was  approximately
$4,774 as of September 30, 1996.

      As of September 30, 1996,  the Company's  largest  aggregation of loans to
one  borrower  was  two  loans  secured  by 62  one-to-four  family  residences,
originated  prior to August  1989 in the  amount of $3,039  having a balance  of
$3,666 as of September 30, 1996.  These loans are

                                       14

<PAGE>


secured by  non-owner  occupied  one-to-four  family  units  located in Wichita,
Kansas and were  performing in  accordance  with their terms as of September 30,
1996.  They were  restructured  during  October  1994. No provision for loss was
considered  necessary,  based  on the  restructured  terms  and the  cash  flows
expected to be generated by the underlying collateral.

      Loan Delinquencies.  The Company's collection procedures provide that when
a mortgage loan is 16 days past due, a computer  printed  delinquency  notice is
sent and borrowers are contacted by telephone to discuss the delinquency. If the
loan  continues  in a  delinquent  status  for 90 days or  more,  the  Board  of
Directors  of the Company  generally  approves  the  initiation  of  foreclosure
proceedings unless other repayment  arrangements are made. Collection procedures
for non-mortgage loans generally begin after a loan is ten days delinquent.

      Loans are  reviewed  on a  regular  basis  and are  generally  placed on a
non-accrual status when the loan becomes more than 90 days delinquent or, in the
opinion of  management,  the  collection  of  additional  interest is  doubtful.
Interest  accrued and unpaid at the time a loan is placed on non-accrual  status
is charged against interest income. Subsequent payments, if any, are recorded as
interest income.

      Real estate  acquired by the  Company as a result of  foreclosure  or by a
deed in lieu of foreclosure  is classified as foreclosed  real estate until such
time as it is sold. When  foreclosed real estate is acquired,  it is recorded at
fair value as of the date of  foreclosure  or transfer less  estimated  disposal
costs. It is  subsequently  carried at the lower of the new basis (fair value at
foreclosure  or transfer) or fair value.  As of September 30, 1996,  the Company
had no loans  that were  considered  troubled  debt  restructurings  within  the
meaning of SFAS No. 15.


                                       15

<PAGE>


Non-Performing Assets

<TABLE>
<CAPTION>
                                                                            At September 30,
                                                          1992        1993         1994        1995        1996
                                                          ----        ----         ----        ----        ----
                                                                          (Dollars In Thousands)
Loans accounted for on a non-accrual basis:
Mortgage loans:
   Permanent loans secured by one-to-four            
<S>                                                      <C>           <C>         <C>         <C>         <C>  
    family dwelling units                                  $945        $ 45        $ 125       $ 368       $ 445
   All other mortgage loans                                  24           0            0           0           0
Non-mortgage loans:
   Consumer                                                  32           0            0          24          39 
                                                         ------        ----        -----       -----       ----- 
Total                                                    $1,001        $ 45        $ 125       $ 392       $ 484 
                                                         ======        ====        =====       =====       ===== 

Accruing loans which are contractually past
 due 90 days or more                                         $0        $  0        $   0       $   0       $   0
Total non-accrual and accrual loans                       1,001          45          125         392         484
REO                                                       1,237         837           46         187          28
                                                         ------        ----        -----       -----       ----- 
Total non-performing assets                              $2,238        $882        $ 171       $ 579       $ 512 
                                                         ======        ====        =====       =====       ===== 
Total non-accrual loans to net loans                       1.27%       0.08%        0.12%       0.31%       0.28%
Total non-accrual loans to total assets                    0.53%       0.03%        0.06%       0.14%       0.14%
Total non-performing assets to total assets                1.18%       0.52%        0.08%       0.21%       0.15%
                                                         ======        ====        =====       =====       ===== 

</TABLE>

      Accrued interest on non-performing loans for the years ended September 30,
1995 and 1996 totalled approximately $31 and $45.

      Classified Assets. OTS regulations provide for a classification system for
problem assets of insured  institutions  that covers all problem  assets.  Under
this  classification   system,   problem  assets  of  insured  institutions  are
classified  as  "substandard,"  "doubtful,"  or "loss."  An asset is  considered
"substandard"  if it is  inadequately  protected  by the  current  net worth and
paying  capacity  of  the  obligor  or  of  the  collateral   pledged,  if  any.
"Substandard"  assets include those characterized by the "distinct  possibility"
that the insured  institution  will sustain "some loss" if the  deficiencies are
not  corrected.  Assets  classified  as  "doubtful"  have all of the  weaknesses
inherent in those classified  "substandard," with the added  characteristic that
the weaknesses present make "collection or liquidation in full," on the basis of
currently  existing  facts,  conditions  and values,  "highly  questionable  and
improbable."  Assets  classified as "loss" are those considered  "uncollectible"
and  of  such  little  value  that  their  continuance  as  assets  without  the
establishment  of a specific loss reserve is not  warranted.  Assets  designated
"special  mention" by management are assets  included on the Company's  internal
watchlist  because of  potential  weakness  but which do not  currently  warrant
classification in one of the aforementioned categories.

      When  an  insured   institution   classified   problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan losses in
an amount  deemed  prudent by  management.  General  allowances  represent  loss
allowances which have been established to recognize the 

                                       16

<PAGE>

inherent risk associated  with lending  activities,  but which,  unlike specific
allowances,  have not been  allocated  to  particular  problem  assets.  When an
insured  institution  classifies problem assets as "loss," it is required either
to  establish a specific  allowance  for losses equal to 100% of that portion of
the  asset  so  classified  or to  charge  off  such  amount.  An  institution's
determination  as to the  classification  of its  assets  and the  amount of its
valuation  allowances  is  subject  to  review  by the OTS,  which may order the
establishment of additional  general or specific loss  allowances.  A portion of
general loss  allowances  established to cover possible losses related to assets
classified  as  substandard  or  doubtful  may be  included  in  determining  an
institution's  regulatory capital,  while specific valuation allowances for loan
losses  generally do not qualify as  regulatory  capital.  At September 30, 1996
that Company had a general  loss  allowance  for loans and REO of $455.  

                                                At September 30,
                                                      1996
                                                -----------------
                                                 (In Thousands)
Special Mention                                         0
Substandard                                           389
Doubtful assets                                         0
Loss assets                                             0
General loss allowance                                455
Specific loss allowance                                 0
Charge-offs, net                                      112


     REO.  Real  estate  owned  or  acquired  by  the  Company  as a  result  of
foreclosure,  judgment or by a deed in lieu of foreclosure is classified as real
estate owed until it is sold.  When  property is acquired it is recorded at fair
value as of the date of foreclosure or transfer less estimated  disposal  costs.
It is  subsequently  carried  at the  lower  of the new  basis  (fair  value  at
foreclosure or transfer) or fair value.

     The  Company  held REO with a net balance of $28 as of  September  30, 1996
consisting of 2 one-to-four family dwellings with a carrying value totaling $62.
An allowance for loss of $34 is carried on real estate owned.  See Note 9 to the
Notes to Consolidated Financial Statements.

      Allowance for Loan and Real Estate Losses.  It is  management's  policy to
provide for losses on  unidentified  loans in its loan  portfolio and foreclosed
real  estate.  A  provision  for loan losses is charged to  operations  based on
management's  evaluation  of the  potential  losses  that may be incurred in the
Company's loan portfolio. Such evaluation,  which includes a review of all loans
of which full  collectibility  of interest and  principal  may not be reasonably
assured,  considers,  among other matters, the estimated net realizable value of
the underlying collateral.  During the years ended September 30, 1994, 1995, and
1996, the Company charged $6, $224, and $75, respectively,  to the provision for
loan losses and $59, $81, and $18, respectively,  to the provision for losses on
REO or in judgment and other repossessed assets.

                                       17

<PAGE>

      Management  will continue to review the entire loan portfolio to determine
the extent,  if any, to which further  additional  loss provisions may be deemed
necessary.  There can be no  assurance  that the  allowance  for losses  will be
adequate  to cover  losses  which may in fact be realized in the future and that
additional provisions for losses will not be required.





















                                       18

<PAGE>



The  distribution of the Company's  allowance for losses on loans is shown below
at the dates indicated:

<TABLE>
<CAPTION>


                                                                 At September 30,
                          ----------------------------------------------------------------------------------------------------------
                                 1992                1993                 1994                  1995                  1996
                          --------------------  -------------------  -------------------  --------------------  --------------------

                                   Percent of           Percent of           Percent of            Percent of            Percent of
                                    Loans in             Loans in             Loans in              Loans in              Loans in
                                      Each                 Each                 Each                  Each                  Each
                                   Category to          Category to          Category to           Category to           Category to
                          Amount   Total Loans  Amount  Total Loans  Amount  Total Loans  Amount   Total Loans  Amount   Total Loans
                          ------   -----------  ------  -----------  ------  -----------  ------   -----------  ------   -----------

<S>                        <C>      <C>         <C>       <C>        <C>      <C>         <C>        <C>         <C>       <C>   
Residential real estate    $231      92.72%     $307       92.13%    $226      95.98%     $369        96.49%     $351       97.06%
Commercial real estate       22       2.82%       18        3.19%      13       0.90%       10        0.98%        10        0.55%
Consumer                     30       4.46%       21        4.68%      36       3.12%       44        2.53%        60        2.39%
                           ----      -----      ----       -----     ----      -----      ----        -----      ----       ----- 

Total                      $283     100.00%     $346      100.00%    $275     100.00%     $423       100.00%     $421      100.00%
                           ====     ======      ====      ======     ====     ======      ====       ======      ====      ====== 


</TABLE>








                                       19

<PAGE>


Analysis of the Allowance for Loan Losses

      The following table sets forth  information  with respect to the Company's
allowance for loan losses at the dates indicated:

<TABLE>
<CAPTION>
                                                                             At September 30,
                                                         ------------------------------------------------------------
                                                           1992        1993         1994         1995         1996
                                                           ----        ----         ----         ----         ----
                                                                          (Dollars in Thousands)
<S>                                                      <C>         <C>          <C>          <C>          <C>      
Total loans outstanding, net                             $ 78,531    $ 56,623     $102,243     $124,796     $171,158 
                                                         ========    ========     ========     ========     ======== 
Average loans outstanding                                  95,453      65,959       63,751      119,247      134,013 
                                                         ========    ========     ========     ========     ======== 

Allowance balances (at beginning of period)                   274         283          346          275          423
Provision for loan losses                                      83         154            6          224           75
Net charge-offs:
   Residential                                                (59)        (62)         (65)         (56)         (58)
   Consumer                                                   (15)        (29)         (12)         (20)         (19)
                                                         --------    --------     --------     --------     --------
Allowance balance (at end of period)                     $    283    $    346     $    275     $    423     $    421 
                                                         ========    ========     ========     ========     ======== 
Allowance for loan losses as a percent of total
 outstanding loans                                           0.36%       0.61%        0.27%        0.34%        0.25%
Net loans charged off as a percent of average
 loans outstanding                                           0.08%       0.14%        0.12%        0.06%        0.06%

</TABLE>


Analysis of the Allowance for REO


<TABLE>
<CAPTION>

                                                                        At September 30,
                                                 ---------------------------------------------------------------
                                                      1995         1993       1994        1995         1996
                                                      ----         ----       ----        ----         ----
                                                                    (Dollars in Thousands)
<S>                                                <C>           <C>        <C>         <C>         <C>      
Total REO, net                                     $   1,237     $   837    $    46     $   187     $      28 
                                                   =========     =======    =======     =======     ========= 

Allowance balance (at beginning of period)                77          36         25          16            51
Provision for loss                                        62          29         59          81            18
Net charge-offs                                         (103)        (40)       (68)        (46)          (35)
                                                   ---------     -------    -------     -------     -------- 
Allowance balance (at end of period)               $      36     $    25    $    16     $    51     $      34 
                                                   =========     =======    =======     =======     ========= 
Allowance for loss on REO to net REO                    2.91%       2.99%     34.78%      27.27%       121.43%

</TABLE>




                                       20

<PAGE>


Loan Servicing

      General.  The Company's loan servicing portfolio  represents a substantial
asset which, in the opinion of management, is expected to generate a significant
source of fee income.  As of  September  30,  1996,  the  Company was  servicing
approximately  $1,229,153 of loans for others.  The portfolio of mortgage  loans
serviced for others at September  30, 1996  consisted  of  approximately  22,000
loans  with an  average  balance of  approximately  $55 and a  weighted  average
service fee of  approximately  0.387% per annum.  Since 1988, the loan servicing
portfolio has been  increasing and the Company  expects that it will continue to
increase.  In management's view, the loan servicing  portfolio also acts to some
degree  as a hedge  for the  lending  and  mortgage  banking  components  of the
Company's business.

      The Company receives fees from a variety of institutional  mortgage owners
in return for  performing  the  traditional  services of  collecting  individual
payments and managing the loan  portfolio.  Loan servicing  includes  processing
payments, accounting for loan funds and collecting and paying real estate taxes,
hazard  insurance  and  other   loan-related  items  such  as  private  mortgage
insurance.  When the Company receives the gross mortgage payment from individual
borrowers,  it remits to the investor in the mortgage a predetermined net amount
based on the yield on that mortgage.  The  difference  between the coupon on the
underlying mortgage and the predetermined net amount paid to the investor is the
gross loan servicing fee. In addition,  the Company  retains  certain amounts in
escrow for the  benefit of the lender for which the  Company  incurs no interest
expense but is able to lend. As of September 30, 1996,  the Company held $16,917
in borrower escrow and principal and interest payments related to loans serviced
for others.  These amounts are  categorized as deposits for financial  reporting
purposes.

      Loan Servicing Portfolio. The loan servicing portfolio as of September 30,
1996 was composed  primarily of GNMA mortgage loan (71.2%),  FNMA mortgage loans
(9.4%),  and FHLMC  mortgage  loans  (18.8%).  The balance of the loan servicing
portfolio as of September 30, 1996  consisted of loans serviced for a variety of
private  investors.  The loans serviced for others are predominantly  secured by
property  located in Kansas.  As of  September  30,  1996,  the  portfolio  also
included  loans secured by property  located  primarily in Oklahoma,  Louisiana,
Michigan and Illinois.

      As a result of the increase in the size of the portfolio of loans serviced
for others,  gross loan  servicing  fees have increased from $1,261 for the year
ended September 30, 1991 to $4,779 for the year ended September 30, 1996.

      As part of its  responsibilities for various investors in VA-guaranteed or
FHA-insured  mortgage  loans,  the Company is required to advance  interest  and
certain  other  costs on those  loans when the  mortgagor  is  delinquent.  This
requirement  continues until the Company pays the remaining  principal amount of
the loan to the investor and forecloses upon the loan. The Company  subsequently
files  with  either  the VA or FHA a claim  for the  amount  of loan  principal,
advanced interest and other costs incurred.

                                       21

<PAGE>

      When a claim is filed  with the VA,  the VA  either  (i) pays the claim in
full and takes title to the foreclosed  property (in which case the Company does
not suffer a loss) or (ii)  exercises  its option to pay to the Company only the
mortgage  guarantee  amount up to a maximum of 50% of the loan  amount (in which
case the Company must rely upon the sale of the  foreclosed  property to recover
the balance of its claim).  The VA typically  exercises  this latter option when
the value of the property plus the guarantee is less than the carrying amount of
the loan. To the extent that the guarantee, insurance, and the amounts generated
from foreclosure proceedings are insufficient to retire the indebtedness on such
loans, a loss will be incurred.

      When a claim is filed  with the FHA,  the  Company is  reimbursed  for its
advances of interest on the loan at the debenture interest rate in effect on the
date that the loan was originated; in addition, the interest starts to accrue on
the  61st  day  after  the  date of  default  at the  debenture  interest  rate.
Furthermore,  if an  originated  loan does not conform to the loan  underwriting
standards  of the  acquiror,  the acquiror has a right to require the Company to
repurchase such loans.

      Included in other assets as of September  30, 1996,  were $1,995 in claims
receivable from the FHA or VA for insured or guaranteed  mortgage  loans.  These
receivables are carried at the lower of cost or net realizable value.

      Mortgage  Servicing Rights ("MSRs").  The cost of MSRs are capitalized and
amortized in  proportion  to, and over the period of, the  estimated  future net
servicing  income.  As of September  30,  1996,  MSRs were carried at a value of
$12,496 by the Company.  MSRs  generally are  adversely  affected by current and
anticipated prepayments resulting from decreasing interest rates.

      The purchase of loan servicing  rights by the Company  involves a detailed
analysis of the mortgage  portfolio  being offered for sale.  When a request for
bids is received,  the Company  evaluates the pertinent  information,  including
types of loans,  escrow  balances,  delinquency  rate,  weighted average coupon,
weighted average maturity,  foreclosure  rates, and average principal balance on
the servicing,  to determine the appropriate  purchase price. A bid,  subject to
due diligence,  is then submitted.  After a bid is accepted, the Company reviews
all  aspects of the loans to assure that the  portfolio  is as  represented  and
reserves the right to withdraw the bid if the portfolio is found to be different
from  what  was  represented.   The  Company  receives  seller   warranties  and
representations  regarding the adequacy of prior loan servicing and  origination
procedures.

            Originated  Mortgage  Servicing  Rights.  In May 1995, the Financial
Accounting  Standards  Board ("FASB") issued  Statement of Financial  Accounting
Standards ("SFAS") No. 122, Accounting for Mortgage Servicing Rights,  effective
for  fiscal  years  beginning  after  December  15,  1995  with  early  adoption
encouraged in fiscal years for which financial  statements have not been issued.
This Statement  requires the recognition of mortgage servicing rights related to
mortgage loans acquired through origination  activities of the Savings Bank. The
originated  mortgage  servicing  rights  are  recorded  at cost  based  upon the
relative fair values of the loans and the servicing  rights.  Servicing  release
fees paid on comparable  loans and  discounted  

                                       22
<PAGE>

cash flows are used to  determine  estimates  of fair  values.  The Savings Bank
capitalized  originated mortgage servicing rights of $322 in 1995 related to the
early  adoption of SFAS No. 122 which  effect is included in the gain on sale of
loans, net, to the extent such originated loans were sold prior to September 30,
1995.  These  rights  are  amortized  in  proportion  to and over the  period of
expected net servicing income.

      Purchased Mortgage  Servicing Rights.  Purchased mortgage servicing rights
are acquired from  independent  third-party  originators and are recorded at the
lower of cost or fair value.  Prior to the  adoption of SFAS No. 122, the excess
of the sale  consideration  received for purchased loans over the recorded basis
of those  loans was offset  against  the cost of the  mortgage  servicing  right
instead of being  recorded  as income.  As the Savings  Bank has  elected  early
adoption of SFAS No. 122, no gains on the sale of loans were offset  against the
cost of the mortgage servicing rights in 1995. The offset was $714 in 1994. Such
rights  are  amortized  in  proportion  to and over the period of  expected  net
servicing income.

      Impairment  Evaluation.  The Savings Bank  evaluates the carrying value of
capitalized  mortgage  servicing  rights  on a  periodic  basis  based  on their
estimated  fair value.  For purposes of evaluating  and measuring  impairment of
capitalized  servicing rights, in accordance with SFAS No. 122, the Savings Bank
stratifies  the rights  based on their  predominant  risk  characteristics.  The
significant risk  characteristics  considered by the Savings Bank are loan type,
period or origination  and stated  interest  rate. If the fair value  estimated,
using a discounted cash flow  methodology,  is less than the carrying amount for
the  portfolio,  the  portfolio is written down to the amount of the  discounted
expected cash flows utilizing a valuation  allowance.  The Savings Bank utilizes
consensus  market  prepayment  assumptions  and  discount  rates to evaluate its
capitalized  servicing  rights as of September 30, 1996 which considers the risk
characteristics  of the underlying  servicing rights.  For the years ended 1994,
1995 and 1996, there were no write downs or valuation allowances established for
capitalized servicing.

      Sale of Mortgage  Servicing  Rights.  The Savings Bank recognizes gains on
sales of mortgage  servicing rights when a legal closing of the sale occurs with
title passing to the buyer. In addition,  all  significant  risks and rewards of
ownership  have  transferred  to the buyer,  including  risks related to default
prepayment  (including no uncapped risks related to defaults or prepayments) and
there are no significant unresolved  contingencies.  The Savings Bank defers the
gain on sale of servicing until these conditions are met.

      The following  table sets forth the loan  servicing fees of the Company as
well as such fees as a percentage of net interest  income of the Company  during
the periods indicated.

                                       23

<PAGE>

<TABLE>
<CAPTION>

                                                             Year Ended September 30,
                                             ------------------------------------------------------------
                                                 1992       1993        1994        1995         1996
                                                 ----       ----        ----        ----         ----
                                                              (Dollars in Thousands)
Loan servicing fees, net of MSR
<S>                                          <C>         <C>         <C>         <C>          <C>      
  amortization                               $     837   $   1,125   $   1,789   $   3,102    $   3,128
Net interest income                          $   4,526   $   5,509   $   5,605   $   7,221    $   7,905
Loan servicing fees as a percentage
  of net interest income                          18.5%       20.4%       31.9%       43.0%        39.6%

</TABLE>


      The following  tables sets forth the composition of the portfolio of loans
serviced for others as of September 30, 1996.

                                    Unpaid principal balance
                                    ------------------------
                                        (In Thousands)
                  GNMA                     $875,381
                  FNMA                      115,492
                  FHLMC                     231,515
                  Other(1)                    6,765
                                          ---------
                                         $1,229,153

--------------------
(1)  Includes   private    investors,    other   financial    institutions   and
     municipalities.

Interest Bearing Accounts Held at Other Financial Institutions

      As of  September  30, 1996,  the Company  held $3,924 in  interest-bearing
deposits in other financial  institutions,  principally with the FHLB of Topeka.
The Company maintains these accounts in order to maintain  liquidity and improve
the interest-rate sensitivity of its assets.

Investment Activities

      Mid-Continent is required under federal  regulations to maintain a minimum
amount of liquid assets which may be invested in specified short-term securities
and certain other investments.  The Company has generally maintained a liquidity
portfolio  well in excess of regulatory  requirements.  Liquidity  levels may be
increased or decreased depending upon the yields on investment  alternatives and
upon management's judgment as to the attractiveness of the yields then available
in relation to other  opportunities  and its expectation of future yield levels,
as well as management's  projections as to the short-term demand for funds to be
used in the Company's loan origination and other activities. As of September 30,
1996,  the  Company  had  an  investment  portfolio  of  approximately  $90,562,
consisting  primarily  of U.S.  Government  agency  obligations,  U.S.  Treasury
securities, and FHLB stock as permitted by the OTS regulations.  The Company has
found its level of  investment  securities  has  increased  in recent years as a
result  of   increased   interest   rates.   Mid-Continent   has   invested   in
mortgage-related securities to offset any excess liquidity;  principally in FNMA
ARMs and FHLMC ARMs. The Company  anticipates  having the ability to fund all of
its  investing  activities  from  funds  held on  

                                       24

<PAGE>



deposit at FHLB of Topeka.  Mid-Continent  will  continue  to seek high  quality
investments with short to intermediate  maturities and duration from one to five
years.

Investment Portfolio

      The  following  table sets  forth the  carrying  value of the  Company's
investment securities portfolio,  short-term  investments,  FHLB stock, at the
dates  indicated.  As of September 30, 1996, the market value of the Company's
total investment securities portfolio was $88,154.

<TABLE>
<CAPTION>
                                                       At September 30,
                                       ----------------------------------------------
                                          1993         1994        1995        1996
                                          ----         ----        ----        ---- 
                                                      (In Thousands)

Investment Securities:
<S>                                     <C>          <C>         <C>         <C>     
   U.S. Government Securities           $  1,126     $  1,222    $  1,326    $  1,438
   U.S. Agency Securities                 11,812       20,946      52,917      84,797
   FHLB Stock                              2,206        2,206       2,206       4,327 
                                          ------       ------      ------      ------
      Total Investment Securities       $ 15,144     $ 24,374    $ 56,449    $ 90,562 
                                        ========     ========    ========    ======== 

</TABLE>


      On June 1, 1989, the OTS issued a rule to clarify the  application of GAAP
to  securities  held for  investment,  sale  and/or  trading by insured  savings
associations.  The rule  requires  an  insured  savings  association's  board of
directors  to  document  and  monitor  its  investment  policy  and  strategies,
discusses the appropriate  documentation of investment  decisions of the insured
savings  association's  board  of  directors,   summarizes  GAAP  applicable  to
securities held for investment,  sale and/or trading, and offers guidance on the
application of GAAP by insured  savings  associations  in determining  whether a
security  should be  accounted  for as a security  held as an  investment,  as a
security held for sale or as a security held for trading.

      In May  1993,  the  FASB  issued  SFAS No.  115,  Accounting  for  Certain
Investments  in  Debt  and  Equity  Securities.  This  statement  addresses  the
accounting  and reporting  treatment for certain  investments in debt and equity
securities by requiring such  investments to be classified in  held-to-maturity,
available-for-sale    or   trading   categories.    Securities   classified   as
held-to-maturity   would  be  carried  at  amortized  cost,   available-for-sale
securities would be carried at market with unrealized gains (losses) included in
equity and trading  securities  would be carried at market with unrealized gains
(losses)  included in operations.  The Company  adopted this standard  effective
October 1, 1994.  The  adoption of this  Standard did not have any impact on the
Company's  financial  position or results of  operations  as it is  management's
intent to hold all investment securities to maturity.

                                       25
<PAGE>


Investment Portfolio Maturities

      The following table sets forth certain information  regarding the carrying
values,  weighted  average  yields and  maturities of the  Company's  investment
securities portfolio as of September 30, 1996.

<TABLE>
<CAPTION>


                                                                   As of September 30, 1996
                       ---------------------------------------------------------------------------------------------------------
                        One Year or Less One to Five Years  Five to Ten Years   More than Ten Years  Total Investment Securities
                       ----------------- -----------------  ------------------  --------------------  --------------------------
                       Carrying  Average Carrying  Average  Carrying   Average  Carrying     Average  Carrying  Average   Market
                        Value     Yield    Value    Yield     Value     Yield    Value        Yield     Value    Yield    Value
                       --------  ------- --------  -------  --------   -------  --------     -------  --------  -------   ------
                                                                              (Dollars in Thousands)
<S>                     <C>       <C>     <C>       <C>     <C>         <C>     <C>        <C>        <C>        <C>       <C>     
Investment Securities:
   U.S. Government 
    Obligations                          $ 1,341     8.56%                       $    97    11.47%     $ 1,438    8.76%      1,415
   U.S. Agency
    Obligations         $2,000    6.18%   11,991     5.01%  $17,500     7.05%     53,306     7.71%      84,797    7.16%     82,412
   FHLB Stock                                                                      4,327     6.50%       4,327    6.50%      4,327
                        ----------------------------------------------------------------------------------------------------------- 
      Total             $2,000    6.18%  %13,332     5.37%  $17,500     7.05%     57,730     7.71%     $90,562    7.18%   $ 88,154
                        ===========================================================================================================
</TABLE>







                                       26



<PAGE>


Mortgage-Related Securities

      The Company has a substantial  investment in residential  mortgage-related
securities.  Although such securities are held for investment, they can serve as
collateral for borrowings and, through repayments,  as a source of liquidity. As
of  September  30,  1996,  the  carrying  value of  mortgage-related  securities
totalled $34,383,  or 10.1% of total assets. The market value of such securities
totalled  approximately  $34,366 as of September  30, 1996.  As of September 30,
1996,  $14,296 in  mortgage-related  securities  were pledged as collateral  for
public funds.

      The  mortgage-related  securities  portfolio  as  of  September  30,  1996
consisted  primarily  of fixed and  adjustable  rate pass  through  certificates
issued by GNMA ($11,194),  fixed and adjustable pass through certificates issued
by FHLMC ($18,072), and fixed and adjustable pass through certificates issued by
FNMA ($2,981).  To a lesser extent, the  mortgage-related  securities  portfolio
also  contains  pass  through  certificates  issued  by the  Mortgage  Guarantee
Insurance Corporation ("MGIC").

      Mortgage-related  securities represent a participation  interest in a pool
of single-family or multi-family mortgages,  the principal and interest payments
on which  are  passed  from the  mortgage  originators,  through  intermediaries
(generally   quasi-governmental   agencies)   that   pool  and   repackage   the
participation  interests in the form of  securities,  to  investors  such as the
Company.  Such  quasi-governmental  agencies,  which  guarantee  the  payment of
principal and interest to investors, primarily include FHLMC, FNMA and GNMA.

      FHLMC is a  corporation  chartered by the United  States  Government  that
issues  participation  certificates backed principally by conventional  mortgage
loans.  FHLMC  guarantees the timely payment of interest and the ultimate return
of principal.  FHLMC  securities  are indirect  obligations of the United States
Government.  FNMA is a private corporation  chartered by Congress with a mandate
to establish a secondary market for conventional mortgage loans. FNMA guarantees
the timely payment of principal and interest,  and FNMA  securities are indirect
obligations of the United States  Government.  GNMA is a government  agency with
HUD which is intended to help finance government assisted housing programs. GNMA
guarantees the timely payment of principal and interest, and GNMA securities are
backed by the full  faith and  credit of the  United  States  Government.  Since
FHLMC,  FNMA  and  GNMA  were  established  to  provide  support  for  low-  and
middle-income  housing,  there are  limits  to the  maximum  size of loans  that
qualify for these programs.  To accommodate  larger-sized loans, and loans that,
for other reasons,  do not conform to the agency  programs,  a number of private
institutions have established their own home-loan origination and securitization
programs.

      Mortgage-related  securities  typically  are issued with stated  principal
amounts,  and the  securities  are backed by pools of mortgages  that have loans
with  interest  rates that are within a range and have varying  maturities.  The
underlying pool of mortgages can be composed of either  fixed-rate  mortgages or
ARMs.   Mortgage-related  securities  are  generally  referred  to  as  mortgage
participation  certificates  or  pass-through  certificates.  As a  result,  the
interest rate risk  characteristics  of the underlying pool of mortgages,  i.e.,
fixed-rate or adjustable-rate,  as well as prepayment risk, are passed on to the
certificate  holder.  The life of a  mortgage-related  pass-

                                       27

<PAGE>


through   security   is  equal  to  the  life  of  the   underlying   mortgages.
Mortgage-related securities issued by FHLMC, FNMA, and GNMA make up the majority
of the pass-through market.

      In a declining  interest  rate  environment,  the  Company may  experience
significant  prepayments  on both  fixed- and  adjustable-rate  mortgage-related
securities. In such an environment or in an environment where interest rates are
perceived  to be low, the Company may not be able to reinvest the cash flow from
these securities into comparable yielding investments.

      The  following  table  sets  forth  the  carrying  value of the  Company's
mortgage-related securities portfolio at the dates indicated.


<TABLE>
<CAPTION>

                                                         At September 30,
                                         ----------------------------------------------
                                            1993        1994         1995        1996
                                            ----        ----         ----        ----

Held for Investment:
<S>                                      <C>         <C>          <C>         <C>      
   FNMA-ARMs                             $   5,424   $   3,391    $   2,990   $   2,616
   FHLMC-ARMs                                8,268       8,293        6,786       6,219
   GNMA-ARMs                                     -       6,020        5,729       5,043
   FHLMC-fixed rate                         12,705      15,256       13,835      11,853
   FNMA-fixed rate                           1,279         585          459         365
   GNMA-fixed rate                          10,494       8,086        7,293       6,151
   MGIC                                      4,686       3,399        2,912       2,136 
                                          --------    --------     --------    --------
Total mortgage-related securities         $ 42,856    $ 45,030     $ 40,004    $ 34,383 
                                          ========    ========     ========    ======== 
</TABLE>


Subsidiary Activities

      Mid-Continent is permitted to invest up to 2% of its assets in the capital
stock of, or secured or unsecured  loans to,  subsidiary  corporations,  with an
additional  investment  of 1% of  assets  when  such  additional  investment  is
utilized primarily for community development purposes. As of September 30, 1996,
the net book value of the Company's total investment in its service  corporation
was $129.

      The  Bank  has  one  subsidiary,   Laredo   Investment,   Inc.  which  was
incorporated  in the State of Kansas and is engaged in the sale of tax  deferred
annuities through Mid-Continent's branch offices. Insurance commissions from the
sale of tax  deferred  annuities  amounted  to $57 and $3 for  the  years  ended
September 30, 1995 and 1996, respectively.

Sources of Funds

      General.  Deposits are the major source of the Company's funds for lending
and other investment purposes. Mid-Continent derives funds from amortization and
prepayment of loans and  mortgage-related  securities,  maturities of investment
securities and operations.  Scheduled loan principal repayments are a relatively
stable source of funds,  while deposit inflows and 

                                       28

<PAGE>



outflows and loan prepayments are  significantly  influenced by general interest
rates and market conditions.  Mid-Continent  utilizes FHLB advances. The Company
does not use brokered deposits.

      Deposits.  Consumer  deposits are  attracted  principally  from within the
Company's  primary  market area  through the  offering of a broad  selection  of
deposit instruments including checking,  statement savings, money market deposit
and term  certificate  accounts  (including  negotiated  jumbo  certificates  in
denominations of $100,000 or more) and retirement account funds. Deposit account
terms vary according to the minimum balance required,  the time period the funds
must remain on deposit, and the interest rate, among other factors.

      The Company intends to continue to aggressively seek new checking accounts
and other related products and services by utilizing  automated teller machines,
direct  mail,  gifts,  and  in-branch  promotions  in an effort to increase  fee
income.  In April 1993, the Company  introduced a totally-free  checking account
program which has been successful in attracting new checking accounts.

      NOW  accounts,  money  market  accounts,   regular  savings  accounts  and
custodial  accounts  constituted  $57,862,  or  26.9% of the  Company's  deposit
portfolio as of September 30, 1996. Certificates of deposit constituted $99,480,
or 46.4% of the deposit portfolio, excluding Jumbo certificates of deposit, with
principal  amounts of $100,000 or more, which constituted  $57,151,  or 26.6% of
the deposit portfolio, as of September 30, 1996.

Jumbo Certificates of Deposit

      The following table  indicates the amount of the Company's  certificates
of  deposit  of  $100,000  or more  by time  remaining  until  maturity  as of
September 30, 1996.

                  Certificates of Deposits
                  ------------------------
                                         September 30,
                                             1996
                                             ----
Maturity Period
Within three months                    $        40,636
Over three through six months                    3,601
Over six through twelve months                   4,168
Over twelve months                               8,746 
                                                ------
   Total                               $        57,151 
                                                ====== 


      To  supplement  lending  activities  in periods of deposit  growth  and/or
declining  loan  demand,   Mid-Continent   has  increased  its   investments  in
residential  mortgage-related  securities  during  recent  years.  Although such
securities are held for investment,  they can serve as collateral for borrowings
and,  through  repayments,  as a source of liquidity.  As of September 30, 1996,
$41,371 in investment mortgage-related securities were pledged as collateral for
public funds.

                                       29

<PAGE>


Borrowings

      Deposits  are the  primary  source of funds of the  Company's  lending and
investment  activities and for its general  business  purposes.  The Company has
obtained  advances from the FHLB of Topeka to supplement  its supply of lendable
funds.  Advances from the FHLB of Topeka have typically been secured by a pledge
of the  Company's  stock in the FHLB of Topeka  and a portion  of the  Company's
first mortgage loans and certain other assets. The Company,  if the need arises,
may also access the Federal  Reserve  Bank  discount  window to  supplement  its
supply of lendable  funds and to meet  deposit  withdrawal  requirements.  As of
September 30, 1996,  Mid-Continent had $81,700 in advances  outstanding from the
FHLB of Topeka.  The Savings  Bank has entered into a  line-of-credit  agreement
with the FHLB of Topeka  wherein  the  Savings  Bank can  borrow  up to  $54,400
subject to certain  limitations.  As of September  30,  1996,  there was $15,700
outstanding relative to this agreement. The agreement expires December 27, 1996.

Personnel

      As of September  30, 1996,  the Company had 140 full-time and 20 part-time
employees.  None of the  Company's  employees  are  represented  by a collective
bargaining group.

Competition

      The  Company  encounters  strong  competition  both in the  attraction  of
deposits and  origination  of loans.  Competition  comes  primarily from savings
institutions,  commercial banks and credit unions that operate in counties where
Mid-Continent's  offices are located.  The Company competes for savings accounts
by offering depositors  competitive  interest rates and a high level of personal
service. The Company competes for loans primarily through the interest rates and
loan fees it charges  and the  efficiency  and  quality of  services it provides
borrowers, real estate brokers, and contractors.

Regulation

      Set forth below is a brief description of certain laws which relate to the
regulation of the Company.  The description  does not purport to be complete and
is qualified in its entirety by reference to  applicable  laws and  regulations.
Unless otherwise indicated, this section discusses regulations that apply to the
Company indirectly through their direct application to the Savings Bank.

      General. As a federally chartered,  FDIC-insured savings association,  the
Savings Bank is subject to extensive regulation by the OTS and the FDIC. Lending
activities and other  investments must comply with various federal statutory and
regulatory  requirements.  The Savings Bank is also  subject to certain  reserve
requirements promulgated by the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board").

                                       30

<PAGE>

      The OTS, in conjunction with the FDIC, regularly examines the Savings Bank
and  prepares  reports  for the  consideration  of the Savings  Bank's  Board of
Directors on any deficiencies  that they find in the Savings Bank's  operations.
The Savings  Bank's  relationship  with its  depositors  and  borrowers  is also
regulated to a great extent by federal  law,  especially  in such matters as the
ownership  of savings  accounts  and the form and content of the Savings  Bank's
mortgage documents.

      The Savings Bank must file  reports  with the OTS and the FDIC  concerning
its  activities  and financial  condition,  in addition to obtaining  regulatory
approvals  prior to entering into certain  transactions  such as mergers with or
acquisitions  of other savings  institutions.  This  regulation and  supervision
establishes a comprehensive  framework of activities in which an institution can
engage and is intended  primarily for the protection of the FDIC and depositors.
The  regulatory  structure  also  gives  the  regulatory  authorities  extensive
discretion in connection with their  supervisory and enforcement  activities and
examination  policies,  including policies with respect to the classification of
assets and the  establishment  of adequate  loan loss  reserves  for  regulatory
purposes.  Any change in such  regulations,  whether by the OTS, the FDIC or the
Congress could have a material adverse impact on the Company and its operations.
The Company is also required to file certain reports with, and otherwise  comply
with the  rules  and  regulations  of the OTS and the  Securities  and  Exchange
Commission ("SEC").


                                       31

<PAGE>


Regulatory Capital Requirements

      OTS capital regulations require savings institutions to meet three capital
standards:  (1) tangible capital equal to 1.5% of total adjusted  assets,  (2) a
leverage  ratio  (core  capital)  equal to 3% of total  adjusted  assets and (3)
risk-based capital equal to 8.0% of total risk-weighted assets.

      The following  table sets forth the Savings Bank's  capital  position at
September   30,  1996,   as  compared  to  the  minimum   regulatory   capital
requirements imposed by the OTS at that date.

                                                 Percent
                                               of Adjusted
                                  Amount          Assets
                                  ------       ------------
                                 (Dollars in Thousands)
Tangible Capital:
Regulatory capital              $ 31,827            9.32%
Regulatory requirement             5,122            1.50%
                                --------           ----- 
     Excess                     $ 26,705            7.82%
                                ========           ===== 

Core Capital:
Regulatory capital              $ 31,827            9.32%
Regulatory requirement            10,244            3.00%
                                --------           ----- 
     Excess                     $ 21,583            6.32%
                                ========           ===== 

Risk-Based Capital:
Regulatory capital              $ 32,281           24.48%
Regulatory requirement            10,551            8.00%
                                --------           ----- 
     Excess                     $ 21,730           16.48%
                                ========           ===== 


Prompt Corrective Action

      Banking  regulators  are  required  to take  certain  supervisory  actions
against  undercapitalized  institutions,  the severity of which depends upon the
institution's  degree of  capitalization.  Under the OTS rules,  an  institution
shall be deemed to be (i) "well  capitalized" if it has total risk-based capital
of  10.0% or more,  has a Tier I  risk-based  capital  ratio  (core or  leverage
capital to  risk-weighted  assets) of 6.0% or more, has a leverage capital ratio
of 5.0% or more and is not subject to any order or final  capital  directive  to
meet and  maintain  a  specific  capital  level for any  capital  measure,  (ii)
"adequately  capitalized" if it has a total risk-based  capital ratio of 8.0% or
more, a Tier I risked-based  ratio of 4.0% or more and a leverage  capital ratio
of 4.0% or more  (3.0%  under  certain  circumstances)  and  does  not  meet the
definition of "well  capitalized",  (iii)  "undercapitalized"  if it has a total
risk-based  capital  ratio that is less than 6.0%, a Tier I  risk-based  capital
ratio that is less than 4.0% or a leverage  capital ratio that is less than 4.0%
(3.0% in certain circumstances), (iv) "significantly undercapitalized" if it has
a total  risk-based  capital  ratio that is less than 6.0%,  a Tier I risk-based
capital  ratio that is less than 3.0% or a leverage  capital  ratio that is less
than 3.0% and (v)  "critically  undercapitalized"  if it has a ratio of tangible
equity to total assets that is equal to or less than 2.0%.  In  addition,  under

                                       32

<PAGE>

certain   circumstances,   a  federal  banking  agency  may  reclassify  a  well
capitalized  institution as adequately capitalized and may require an adequately
capitalized  institution  or an  undercapitalized  institution  to  comply  with
supervisory  actions as if it were in the next lower  category  (except that the
FDIC  may  not  reclassify  a  significantly   undercapitalized  institution  as
critically undercapitalized).

      Immediately upon becoming undercapitalized, an institution becomes subject
to  restrictive  provisions.  The  appropriate  federal  banking  agency  for an
undercapitalized   institution   also  may  take  any  number  of  discretionary
supervisory  actions  if the  agency  determines  that any of these  actions  is
necessary to resolve the problems of the  institution at the least possible long
term cost to the deposit  insurance fund,  subject in certain cases to specified
procedures.

      The Company is currently a well capitalized institution.

Dividend and Other Capital Distribution Limitations

      OTS  regulations  require the Savings Bank to give the OTS 30 days advance
notice of any proposed  declaration  of dividends  and the OTS has the authority
under its supervisory powers to prohibit the payment of dividends.  In addition,
the Savings Bank may not declare or pay a cash  dividend on its capital stock if
the effect thereof would be to reduce the regulatory capital of the Savings Bank
below the amount required for the liquidation  account  established  pursuant to
the Savings Bank's Plan of Conversion.

      OTS  regulations  impose  limitations  upon all capital  distributions  by
savings  institutions,  such  as  cash  dividends,  payments  to  repurchase  or
otherwise acquire its shares, payments to shareholders of another institution in
a cash-out  merger and other  distributions  charged against  capital.  The rule
establishes  three tiers of  institutions,  based primarily on an  institution's
capital  level.  An  institution  that  exceeds  all  fully  phased-in   capital
requirements  before  and  after  a  proposed  capital   distribution  ("Tier  1
institution")  and has not  been  advised  by the OTS that it is in need of more
than the normal  supervision can, after prior notice but without the approval of
the OTS, make capital  distributions during a calendar year equal to the greater
of (i) 100% of its net income to date during the  calendar  year plus the amount
that would reduce by one-half its "surplus  capital  ratio" (the excess  capital
over its fully phased-in capital  requirements) at the beginning of the calendar
year,  or (ii) 75% of its net income over the most recent four  quarter  period.
Any additional capital  distributions  require prior regulatory approval.  As of
September 30, 1996, the Savings Bank was a Tier 1 institution.  In the event the
Company's capital fell below its fully phased-in requirement or the OTS notified
it that it was in need of more  than  normal  supervision,  the  Savings  Bank's
ability to make capital distributions could be restricted.  In addition, the OTS
could prohibit a proposed capital  distribution by any institution,  which would
otherwise  be  permitted  by the  regulation,  if the OTS  determines  that such
distribution would constitute an unsafe or unsound practice.

      Finally,  a  savings  association  is  prohibited  from  making a  capital
distribution if, after making the distribution, the savings association would be
"undercapitalized"   (not  meet  any  one  of  its  minimum  regulatory  capital
requirement).

                                       33

<PAGE>

Qualified Thrift Lender Test

      The  Home  Owners  Loan  Act  ("HOLA"),   as  amended,   requires  savings
institutions to meet a qualified thrift lender ("QTL") test. If the Savings Bank
maintains  at least 65% of its  portfolio  assets  (defined as all assets  minus
intangible  assets,  property used by the institution in conducting its business
and liquid assets equal to 20% of total assets) in Qualified Thrift  Investments
(primarily  residential  mortgages and related  investments,  including  certain
mortgage-backed  securities"  ("QTIs") and otherwise qualifies as a QTL, it will
continue to enjoy full  borrowing  privileges  from the FHLB of Topeka.  Certain
assets are subject to a percentage  limitation  of 20% of portfolio  assets.  In
addition,  savings  associations may include shares of stock of the Federal Home
Loan Banks,  FNMA and FHLMC as qualifying QTIs.  Compliance with the QTL test is
measured on a monthly basis in nine out of every 12 months.  As of September 30,
1996, the Savings Bank was in compliance with its QTL requirement  with 75.8% of
its total assets invested in Qualified Thrift Investments.

Federal Home Loan Bank System

      The  Savings  Bank is a member of the FHLB of  Topeka,  which is one of 12
regional FHLBs that  administers  the home financing  credit function of savings
associations.  Each FHLB  serves as a reserve  or central  bank for its  members
within its assigned  region.  It is funded  primarily from proceeds derived from
the sale of  consolidated  obligations  of the FHLB  System.  It makes  loans to
members (i.e.,  advances) in accordance with policies and procedures established
by the Board of Directors of the FHLB.

      As a member,  the Savings Bank is required to purchase and maintain  stock
in the FHLB of Topeka in an amount equal to at least 1% of its aggregate  unpaid
residential  mortgage loans, home purchase  contracts or similar  obligations at
the  beginning  of each year.  As of September  30,  1996,  the Savings Bank had
$4,327 in FHLB stock, which was in compliance with this requirement.

Federal Reserve System

      The Federal Reserve Board requires all depository institutions to maintain
non-interest  bearing  reserves at specified  levels  against their  transaction
accounts  (primarily  checking,   NOW  and  Super  NOW  checking  accounts)  and
non-personal  time  deposits.  The  balances  maintained  to  meet  the  reserve
requirements  imposed by the  Federal  Reserve  Board may be used to satisfy the
liquidity requirements that are imposed by the OTS.

      Savings  associations  have  authority to borrow from the Federal  Reserve
Bank "discount  window," but Federal Reserve policy  generally  requires savings
associations  to exhaust  all OTS  sources  before  borrowing  from the  Federal
Reserve  System.  The  Savings  Bank had no  discount  window  borrowings  as of
September 30, 1996.

                                       34

<PAGE>

Holding Company Regulation

      The  Company is a unitary  savings  and loan  holding  company  subject to
regulatory  oversight  by the OTS.  As such,  the  Company is  required  to file
reports with the OTS and is subject to regulation and examination by the OTS. In
addition, the OTS has enforcement authority over the Company and its non-savings
association  subsidiaries  which also  permits  the OTS to  restrict or prohibit
activities  that are determined to be a serious risk to the  subsidiary  savings
association.  This  regulation  and  oversight  is  intended  primarily  for the
protection  of the  depositors  of the Company and not for  stockholders  of the
Company.

      As a unitary savings and loan holding  company,  the Company  generally is
not subject to activity  restrictions,  provided the Company  satisfied  the QTL
test.  If the  Company  acquires  control of another  savings  association  as a
separate  subsidiary,  it  would  become a  multiple  savings  and loan  holding
company,  and the activities of the Company and any of its  subsidiaries  (other
than the Company or any other  FDIC-insured  savings  association)  would become
subject to such  restrictions  unless such other  associations each qualify as a
QTL and were acquired in a supervisory acquisition.

Executive Officers of the Registrant

      The following  individuals were executive officers of the Registrant as of
September 30, 1996:
<TABLE>
<CAPTION>

Name                    Age(1)      Positions Held With the Registrant
----                    ------      ----------------------------------

<S>                       <C>       <C>                              
Richard T. Pottorff       62        Chairman, President, and Chief
                                    Executive Officer

Larry R. Goddard          50        Executive Vice President,  Chief Operating Officer,
                                    and Chief Financial Officer

Harold G. Siemens         47        Senior Vice President - Lending

David L. Walter           48        Vice President
</TABLE>

---------------------
(1)   At September 30, 1996

      The following is a description of the principal  employment and occupation
during at least the past five years of the executive  officers of the Registrant
as of September 30, 1996.

Richard T. Pottorff has served as a Director and Officer of the Savings
Bank since 1978 and of The Company since its  incorporation in January 1994. Mr.
Pottorff  has  served as a  Director  of the FHLB of Topeka  and has served as a
member of the El Dorado  Chamber of Commerce,  the Wichita  Association  of Real
Estate  Brokers and the  Wichita  Homebuilders  Association.  In  addition,  Mr.
Pottorff is the Chairman of the Federal and State Legislative

                                       35

<PAGE>

Committee  of the  Heartland  Community  Bankers.  Mr.  Pottorff  is also a past
Chairman of the Heartland Community Bankers.

      Larry R.  Goddard has been with the Savings Bank since 1978 and has served
as a Director of the Savings Bank and the Company since 1994.  Mr.  Goddard is a
past President of the Mid-West Savings  Conference and has served as Chairman of
the Real Estate Mortgage  Committee of the Heartland  Community  Bankers.  He is
also a member of the  Lions  Club,  a member of the  Partners  in  Education,  a
director of El Dorado,  Inc., and a member of the Community  Action for Retail &
Revitalization Board.

      Harold G.  Siemens  has been with  Company  since  1983.  He is a founding
Director and past Presidnet of the Kansas  Mortgage  Banking  Association  and a
Director of the Mid-West Savings Conference. Mr. Siemens is also a member of the
Real Estate Mortgage Committee of the Heartland  Community Bankers,  the Wichita
Area Association of Realtors and the Wichita Area Builders Association.

      David L. Walter has been with the  Savings  Bank since 1988 and has served
as a Vice  President  of the Company  since  January  1995.  With respect to the
Savings Bank,  Mr. Walter became the Treasurer and the  Controller in 1988 and a
Vice President in 1989. Mr. Walter is a member of the Financial Managers Society
and the Treasurer of the El Dorado Kiwanis Club.

Item 2. Properties

      The Company  operates from its corporate office located at 124 W. Central,
El Dorado,  Kansas.  The Company owns this office  facility  which was opened in
1965.

Full service offices owned and leased by the Company are set forth below.

<TABLE>
<CAPTION>

Location
--------

<C>                              <C>                             <C>               
100 W. Twelfth                   405 N. Main                     2123 N. Maize Road
Newton, Kansas  67114            El Dorado, Kansas  67042        Wichita, Kansas 67212

1113 S. Main                     255 N. Main                     3055 N. Rock Road
Winfield, Kansas  67156          Wichita, Kansas  67201          Wichita, Kansas  67226

2310 S. Main                     1420 N. Ohio                    762 N.  West Street
Winfield, Kansas  67156          Augusta, Kansas  67010          Wichita, Kansas  67203

</TABLE>

      The Company  owns all of its  facilities  except 405 N. Main in El Dorado,
which is leased. This lease expires June 30, 1998. The Company owns land at 79th
St. and Rock Road,  Derby,  Kansas,  Kansas that the Company  expects to develop
into an additional full-service office.

      The Company also owns certain other  properties  that it leases to others.
The location of these properties is set forth below.

                                       36

<PAGE>

<TABLE>
<CAPTION>


<C>                              <C>                             <C>                  
409 N. Main                      100 W. Twelfth                  402 N. Rose Hill Road
El Dorado, Kansas  67042         Newton, Kansas  67114           Rose Hill, Kansas  67213

</TABLE>

Item 3. Legal Proceedings

      There are various claims and lawsuits in which the Company is periodically
involved,  such  as  claims  to  enforce  liens,   condemnation  proceedings  on
properties in which the Company holds security  interests,  claims involving the
making and  servicing of real  property  loans and other issues  incident to the
Company's business.  In the opinion of management,  no material loss is expected
from any of such pending claims or lawsuits.

      Supreme Court Ruling on Breach of Contract Regarding Supervisory Goodwill:
Mid-Continent Federal Savings Bank, the wholly-owned subsidiary of Mid Continent
Bancshares,  Inc.,  is pursuing  its claim  against the  federal  government  to
recover funds lost as a result of the  enactment of the  Financial  Institutions
Reform, Recovery, and Enforcement Act of 1989 ("FIRREA").  In 1986, the Bank was
encouraged by the federal  government to acquire an insolvent thrift institution
("Reserve Savings and Loan  Association").  The federal  government  allowed the
Bank to  count  the  insolvent  thrift's  losses  as  "goodwill"  assets  and to
double-count as "capital  credit" federal  government funds provided to help the
Bank take over the failing thrift. The Bank contends (among other things) in its
lawsuit that the federal  government  breached  its contract  with the Bank when
FIRREA was enacted  because FIRREA  prevented the Bank from counting such assets
toward minimum capital requirements.  As a result of FIRREA, the Bank was forced
to write off approximately  $7,500,000 in supervisory  goodwill.  This write off
reduced the Bank's regulatory capital.

      On July 1, 1996, the United States  Supreme Court Affirmed  decisions by a
federal  appellate court that the government had breached express contracts with
three  thrifts  (U.S.  v. Winstar  Corp,  et al.) and  therefore  was liable for
damages.  Those lawsuits stemmed from circumstances that are similar to those of
the Bank; in order to persuade those thrifts to acquire certain insolvent thrift
institutions,  the federal government promised  accounting  treatment similar to
that promised to the Bank.

      While the Supreme  Court's ruling in U.S. v. Winstar Corp, et al.,  serves
to support the Bank's  legal claims in its pending  lawsuit  against the federal
government,  it is not  possible at this time to predict what effect the Supreme
Court's ruling, and subsequent rulings of a lower court concerning damages, will
have on the outcome of the Bank's lawsuit.  Notwithstanding  the Supreme Court's
ruling,  there can be no  assurance  that the Bank will be able to  recover  any
funds arising out of its claim and, if any recovery is made,  the amount of such
recovery.

Item 4.  Submission of Matters to a Vote of Security Holders

      No matter was  submitted to a vote of security  holders  during the fourth
quarter of the fiscal year.

                                       37

<PAGE>


                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

      The information contained under the section captioned "Market and Dividend
Information" in the Company's  Annual Report to Stockholders for the fiscal year
ended  September  30, 1996 (the  "Annual  Report"),  is  incorporated  herein by
reference.

Item 6.  Selected Financial Data

      The information  contained in the table captioned  "Selected  Consolidated
Financial Highlights" in the Annual Report is incorporated herein by reference.

Item 7.  Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations

      The  information   contained  in  the  section   captioned   "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data

      The   Registrant's   financial   statements   listed  under  Item  14  are
incorporated herein by reference.

Item 9. Changes in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure

      There has been no change of  independent  auditor for the Company,  or its
subsidiaries, during the two year period ended September 30, 1996.



                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

      The  information  contained  under the  section  captioned  "Proposal I --
Election of Directors" in the  Registrant's  definitive  proxy statement for the
Registrant's 1996 Annual Meeting of Stockholders (the "Proxy Statement") is
incorporated herein by reference.

      Additional  information  concerning  executive  officers is included under
"Part I -- Executive Officers of the Registrant."

                                       38

<PAGE>

Item 11.  Executive Compensation

      The  information  contained  under the sections  captioned  "Proposal I --
Election  of  Directors  --  Executive  Compensation,"  "Compensation  Committee
Interlocks and Insider  Participation,"  "--Report of the Compensation Committee
on Executive Compensation," and "--Stock Performance Graph" in the
Proxy Statement are incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

      (a)   Security Ownership of Certain Beneficial Owners

            Information   required  by  this  item  is  incorporated  herein  by
reference to the section  captioned  "Voting  Securities  and Principal  Holders
Thereof" in the Proxy Statement.

      (b)   Security Ownership of Management

            Information   required  by  this  item  is  incorporated  herein  by
reference to the first chart in the section captioned "Proposal I -- Election of
Directors" in the Proxy Statement.

      (c) Management of the Registrant knows of no  arrangements,  including any
pledge by any person of securities of the Registrant, the operation of which may
at a subsequent date result in a change in control of the Registrant.

Item 13.  Certain Relationships and Related Transactions

      The information  required by this item is incorporated herein by reference
to the  section  captioned  "Proposal  I --  Election  of  Directors  -- Certain
Relationships and Related Transactions" in the Proxy
Statement.


                                       39

<PAGE>


                                     PART IV

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

      (a)   The following documents are filed as a part of this report:

            1. The following financial  statements and the report of independent
accountants of the Registrant included in the Registrant's 1996 Annual Report to
Stockholders are incorporated herein by reference and also in Item 8 hereof.

      Consolidated Balance Sheets as of September 30, 1995 and 1996.

      Consolidated  Statements of Income for the Years Ended September 30, 1994,
1995 and 1996.

      Consolidated  Statements  of  Stockholders'  Equity  for the  Years  Ended
September 30, 1994, 1995 and 1996.

      Consolidated  Statements  of Cash Flows for the Years Ended  September 30,
1994, 1995 and 1996.

      Notes to Consolidated Financial Statements.

            2. Financial Statement  Schedules,  except for Exhibit 11, for which
provision is made in the  applicable  accounting  regulations of the SEC are not
required under the related  instructions or are  inapplicable and therefore have
been omitted.

            3.    The  following  exhibits  are  included  in this  Report  or
incorporated herein by reference:

           (a)      List of Exhibits:

           3(i)     Certificate of  Incorporation  of Mid Continent  Bancshares,
                    Inc. *

           3(ii)    Bylaws of Mid Continent Bancshares, Inc. **

           10.1     Outside Director Consultation and Retirement Plan*

           10.2     Employment Agreement with Richard T. Pottorff **

           10.3     Employment Agreement with Larry R. Goddard **

           10.4     1994 Stock Option Plan **

           10.5     Management Stock Bonus Plan and Trust Agreement **

                                       40

<PAGE>

           10.6     Amendment to Employment Agreement with Richard T. Pottorff

           10.7     Amendment to Employment Agreement with Larry R. Goddard

           11       Statement Regarding Computation of Earnings Per Share

           13       Annual  Report to  Stockholders  for the  fiscal  year ended
                    September 30, 1996

           21       Subsidiaries of the Registrant **

           23       Consent from Deloitte & Touche, LLP

           99       Report on Financial Statement Schedule in Item 14

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

*    Incorporated by reference to the  registration  statement on Form S-1 (File
     No. 33-76010) declared effective by the Commission on May 3, 1994.

**   Incorporated  by  reference  to the Form 10-K  (File No.  0-23620)  for the
     fiscal year ended September 30, 1995.









Copies of above exhibits not contained  herein are available,  at a fee of $0.15
per page,  to any security  holder upon written  request to the  Secretary,  Mid
Continent Bancshares, Inc., 124 West Central, El Dorado, Kansas 67042.

                                       41





<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its  behalf,  on December  26,  1996,  by the  undersigned,  thereunto  duly
authorized.

                                          Mid Continent Bancshares, Inc.

                                          By:/s/Richard T. Pottorff
                                             ---------------------------------
                                             Richard T. Pottorff
                                             President, Chairman and Chief
                                              Executive Officer
                                             (Duly Authorized Representative)

      Pursuant to the  requirement of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated as of December 26, 1996.


/s/ Larry R. Goddard                          /s/ Richard T. Pottorff
-------------------------------               ---------------------------------
Larry R. Goddard                              Richard T. Pottorff
Executive Vice President, Chief               President,   Chairman, Chief
Operating Officer, Chief Financial              Executive Officer, and Director
  Officer and Director                        (Principal Executive Officer)
(Principal Financial and Accounting 
  Officer)



/s/ Donald Adlesperger                        /s/ Thomas C. Hand
-------------------------------               ---------------------------------
Donald Adlesperger                            Thomas C. Hand
Director                                      Director



/s/ Kenneth B. Dellett                        /s/ Ron J. McGraw
-------------------------------               ---------------------------------
Kenneth B. Dellett                            Ron J. McGraw
Director                                      Director