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                               1996 ANNUAL REPORT


<PAGE>

Mid Continent Bancshares, Inc.
================================================================================


                                    CONTENTS

A Letter to Our Shareholders                                           1-2

Business of the Bancorp and Savings Bank                               3-4

Selected Consolidated Financial Highlights                             5-6

Market and Dividend Information                                        7-8

Management's Discussion and Analysis                                  9-24

Consolidated Financial Statements                                    25-63

Directors and Officers and Other Information                         64-65




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Mid Continent Bancshares, Inc.
================================================================================


A Letter to Our Shareholders
----------------------------

Dear Stockholder:

Mid Continent  Bancshares,  Inc. and Mid-Continent  Federal Savings Bank has had
another exceptional year in 1996.

We  increased  our asset base from $271  million at  September  30, 1995 to $340
million  at  September  30,  1996,  or  25.5%,  and  improved  our  capital  and
shareholders' equity from $36.7 million to $36.8 million,  with a net income for
the year of $3.1 million after the SAIF assessment.  1996 earnings per share was
$1.59 after the SAIF  assessment.  The SAIF  assessment  reduced our earnings by
$0.33 per share after income tax. On a pre-SAIF  assessment  basis the company's
earnings  would  have been  $1.92 per  share.  When  viewed on this  basis,  and
considering  the 1995  earnings  of $1.97 per share,  1996 was truly a very good
year for the Company.

During the year we have continued to increase our mortgage  servicing  portfolio
to in excess of $1.2 billion, or approximately  25,000 loans.  Servicing income,
net of  amortization,  increased to $3.1 million.  The expansion of our mortgage
banking operation continues as we now have more than 100 correspondent  brokers.
We have two full  time  account  representatives  covering  Oklahoma,  Arkansas,
Missouri and Kansas.

Our checking account program  continues to grow in popularity.  At September 30,
1995,  we had  approximately  13,500  accounts and as of September  30, 1996 our
accounts had increased to over 16,000. We have increased our market share in our
total  market  since 1994 from 6% to 10%. In the Wichita  area only,  during the
same period of time, from 3% to 6%.

The Bank's service charges and other fees increased by 37.5%,  from $1.8 million
to $2.5  million.  The  primary  source of this  income is the High  Performance
Checking  Account  program and charges on loans serviced by the Bank,  including
loans serviced for others.

The Bank,  during the last quarter of the fiscal year,  has expensed the special
assessment on the SAIF fund in the amount of $1,053,000,  pre-tax.  The Bank has
been looking forward to the resolution of the SAIF fund and the reduction in the
Bank's deposit insurance premiums to be realized during the coming fiscal year.

On July 24, 1995,  the Savings Bank filed a claim in the United  States  Supreme
Court of Claims to recover funds lost as a result of the Financial Institutional
Reform and  Recovery  Enforcement  Act of 1989  (FIRREA).  The Savings  Bank was
forced to write-off  approximately $7.5 million in Supervisory  Goodwill.  While
the Savings Bank, along with many other financial  institutions,  has determined
to pursue a claim  against the United States  government,  there is no assurance
that the Savings Bank will be able to recover any funds  arising from the claim,
or if any recover is made, the

                                      - 1 -


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Mid Continent Bancshares, Inc.
================================================================================

amount of such recovery.

The Bank has completed  construction and opened its fourth office in Wichita. It
has also opened a branch in the Dillions store in Winfield, Kansas. The Bank now
has nine full service offices with the tenth office under construction in Derby,
Kansas.

The Bank has made much progress during the past year as we continued to increase
our  market  share  in  checking  account  services  and  our  mortgage  banking
operation.  The Bank is in the process of implementing a new sales and marketing
program for our retail  banking  operation.  The Bank  intends to  increase  its
market  penetration by expansion of the number of products and services  offered
and sales per customer.

The Board of Directors, management and staff is committed to maintain the Bank's
position as a premier financial provider to our customers and communities.

Thanks to you, the stockholders and our customers,  for having confidence in the
Bank over the past year.

Very truly yours,



/s/Richard T. Pottorff
Richard T. Pottorff
Chairman of the Board, CEO and President

                                      - 2 -


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Mid Continent Bancshares, Inc.
================================================================================

BUSINESS OF THE BANCORP
-----------------------

Mid Continent Bancshares,  Inc. ("Bancorp") is a Kansas corporation organized in
January,  1994. On June 27, 1994, the Bancorp  acquired all the capital stock of
Mid-Continent  Federal  Savings Bank  ("Savings  Bank") in the conversion of the
Savings Bank from a federal  mutual  savings and loan  association  to a federal
stock  savings bank.  Bancorp,  as a unitary  savings and loan holding  company,
under  existing  laws,  generally  is not  restricted  in the types of  business
activities  in which it may engage  provided  that the  Savings  Bank  retains a
specified amount of its assets in housing-related investments.

Management  believes that the holding company structure,  should it decide to do
so, would  facilitate  diversification  into other  non-banking  activities  and
possible  future  acquisitions  of other  financial  institutions  such as other
mutual or stock savings  institutions and commercial  banks, and thereby further
its  expansion  into  existing and new market  areas and also enable  Bancorp to
repurchase  its own  stock.  Except for the  repurchase  of a portion of Bancorp
stock, as permitted by Office of Thrift Supervision, there are no present plans,
arrangements, agreements, or understandings, written or oral, regarding any such
activities.

The Bancorp'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
its business  and to the  Mid-Continent  Federal  Savings  Bank  Employee  Stock
Ownership  Plan ("ESOP") to enable the ESOP to purchase  shares of the Bancorp's
common  stock in the  initial  public  offering  and the  repurchase  of limited
amounts  of Bancorp  stock.  The loans  bear  interest  rates and have terms and
conditions which prevailed in the market place at the time they were originated.
As of September 30, 1996 the Bancorp has reacquired 231,500 shares of its common
stock in the open market.

BUSINESS OF THE SAVINGS BANK
----------------------------

Mid-Continent  Federal Savings Bank is a federally  chartered stock savings bank
located in El Dorado,  Kansas in Butler  County,  Kansas.  The Savings  Bank was
founded in 1925 with a charter from Kansas 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.  Its present name,  Mid-Continent  Federal Savings Bank, was obtained in
1994 at the time it  obtained  a charter as a savings  bank.  The  Savings  Bank
completed its conversion  from mutual to stock form in June,  1994 at which time
all of its stock was acquired by Mid Continent Bancshares, Inc. The Savings Bank
has been a member of the  Federal  Home Loan Bank of Topeka  since  1937 and its
deposits  are  insured  up to  the  applicable  limits  by the  Federal  Deposit
Insurance Corporation ("FDIC").

Mid-Continent  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,

                                      - 3 -


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Mid Continent Bancshares, Inc.
================================================================================

to originate consumer and construction loans for its portfolio. The Savings Bank
purchases  one- to- four family  residential  loans  through  approximately  110
correspondents located primarily in Kansas and, to a lesser extent, in Oklahoma.
The Savings Bank also invests in  mortgage-related  securities,  U.S. government
and agency  obligations.  These  activities  are funded with  deposits  from the
general public and borrowings  from the Federal Home Loan Bank and Mid Continent
Bancshares,  Inc. The Savings Bank 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 Savings
Bank opened one full service  branch in Wichita,  Kansas during 1996 and expects
to open another in 1997 in Derby,  Kansas.  A full service  branch was opened in
October,  1996 in Winfield,  Kansas,  to  compliment  the existing  full service
branch in that city.  The new Winfield  branch is located in the local  Dillon's
supermarket  and will maintain  extended  hours to serve its customer  base. The
Savings Bank offers its customers fixed-rate and adjustable-rate mortgage loans,
as well as FHA/VA loans and consumer  loans,  including  home equity and savings
account  loans.  Adjustable-rate  mortgage  loans  generally are  originated for
retention in the Savings Bank's  portfolio while  fixed-rate  mortgage loans are
generally sold into the secondary market. All consumer loans are retained in the
Savings Bank's portfolio.

The  Savings  Bank is  actively  engaged  in the  purchase  and sale of  certain
mortgage loans through a correspondent  network. These purchased loans and loans
originated by the Savings Bank are sold,  generally without  recourse,  into the
secondary market with the Savings Bank generally retaining the servicing rights.
The sale of loans in the secondary market is the source of a significant  amount
of  income  in the  form of gain on the sale of loans  and fees  generated  from
servicing the loans.

The principal  sources of funds for the Savings  Bank's  lending  activities are
deposits and the amortization, repayment and maturity of loans, mortgage-related
securities and investment  securities.  Principal sources of income are interest
and fees on loans,  mortgage-related  securities and investment securities.  The
Savings Bank's principal expense is interest paid on deposits.

                                      - 4 -


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Mid Continent Bancshares, Inc.
================================================================================

Selected Consolidated Financial Highlights
------------------------------------------

The  following  table sets forth  certain  information  at the dates and for the
periods  indicated.  Average data presented  herein,  for the years 1992 through
1994, is primarily  calculated on the basis of month-end balances.  Average data
presented  herein for the 1995 and 1996 is primarily  calculated on the basis of
daily balances.  Management does not believe that the use of month-end  balances
instead of daily  average  balances has caused any material  differences  in the
information.  All  dollar  amounts  are in  thousands  except per share data and
selected ratios.

SUMMARY OF FINANCIAL CONDITION
<TABLE>
<CAPTION>

                                                                              At September 30,
                                                ---------------------------------------------------------------------------
                                                    1992            1993           1994           1995            1996
                                                -------------  -------------- -------------- --------------  --------------
                                                                          Dollars in Thousands
Total Amount of:

<S>                                                  <C>             <C>            <C>            <C>             <C>     
   Assets                                            $189,340        $170,012       $202,628       $270,923        $340,186
   Loans receivable                                    78,531          56,623        102,243        124,796         171,158
   Mortgage-backed securities                          60,804          42,856         45,030         40,004          34,383
   Loans held for sale                                 17,110          27,734          5,527         22,108          13,718
   Investments                                          7,244          15,144         24,374         56,449          90,562
   Mortgage servicing rights                            2,796           3,243          6,312         11,625          12,496
   Excess of cost over fair value of assets
   acquired (Goodwill)                                    353             252            161             83              22
   Cash and cash equivalents                           15,031          17,701         10,823          5,677           5,618
   Savings deposits                                   159,522         145,838        154,764        195,716         214,493
   Other borrowings                                    14,955           7,500          9,000         33,000          81,700
   Stockholders' equity                                 9,988          12,792         35,208         36,735          36,807

Number of:
   Real estate loans outstanding                        2,302           2,124          1,985          2,593           2,864
   Deposit accounts                                    18,142          17,557         21,743         27,192          29,609
   Full service offices                                     7               6              6              7               8
   Employees                                               91             100            117            119             150

Principal balance of loans serviced for
others                                               $377,639        $580,768       $908,112     $1,189,892      $1,229,153
</TABLE>

                                      -5-
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Mid Continent Bancshares, Inc.
================================================================================
<TABLE>
<CAPTION>

SUMMARY OF OPERATIONS                                                        Year Ended September 30,
                                                        -------------------------------------------------------------------
                                                                               Dollars in Thousands

                                                                1992         1993           1994        1995           1996
                                                        ------------ ------------  ------------- -----------  -------------
<S>                                                          <C>          <C>            <C>         <C>            <C>    
Interest Income                                              $16,398      $12,885        $11,549     $16,225        $20,173
Interest Expense                                              11,872        7,376          5,944       9,004         12,268
                                                        ------------ ------------  ------------- -----------  -------------
      Net interest income                                      4,526        5,509          5,605       7,221          7,905
Provision for loan losses                                         83          154              6         224             75
                                                        ------------ ------------  ------------- -----------  -------------
     Net interest income after provision  for loan  losses     4,443        5,355          5,599       6,997          7,830
                                                        ------------ ------------  ------------- -----------  -------------
Non-interest income:
   Loan servicing fees                                         1,513        1,804          2,689       4,407          4,779
   Amortization of  mortgage servicing rights                  (676)        (679)          (899)     (1,305)        (1,651)
   Gain on sale of mortgage servicing rights                                                           1,961
   Service fees and other charges to customers                   607          618          1,032       1,846          2,539
   Gain on sale of loans held for sale, net                    1,168        2,596            896         706          1,367
   Other income                                                  310          358             83         139            138
                                                        ------------ ------------  ------------- -----------  -------------
      Total non-interest income                                2,922        4,697          3,801       7,754          7,172
                                                        ------------ ------------  ------------- -----------  -------------
Total non-interest expense (1)                                 5,195        5,632          6,340       8,202          9,983
                                                        ------------ ------------  ------------- -----------  -------------
Income before income tax expense and cumulative effect of
change in accounting principle                                 2,170        4,420          3,060       6,549          5,019
Income tax expense                                               893        1,616          1,195       2,443          1,893
                                                        ------------ ------------  ------------- -----------  -------------
Income before cumulative effect of  change in accounting
principle                                                      1,277        2,804          1,865       4,106          3,126
Cumulative effect of change in  accounting principle (2)                                     136
                                                        ------------ ------------  ------------- -----------  -------------
Net income                                                    $1,277       $2,804         $2,001      $4,106         $3,126
                                                        ============ ============  ============= ===========  =============
Earnings per share (3)                                                                     $0.30       $1.97          $1.59
                                                                                           -----       =====          =====
Cash dividends per share                                                                               $0.40          $0.40
                                                                                                       =====          =====

Selected Financial Ratios                                                    Year Ended September 30,
                                                                1992         1993          1994          1995          1996

Return on average assets                                        0.64%        1.61%         1.14%         1.75%         1.07%
Return on average equity                                       13.66%       24.12%        10.54%        11.86%         8.54%
Dividend payout ratio                                             --           --            --         20.30%        25.16%
Average total equity to average assets                          4.67%        6.67%        10.81%        14.74%        12.56%
Net interest rate spread                                        2.40%        3.23%         3.11%         2.87%         2.55%
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  For 1996,  includes a $1,053 one time assessment to  recapitalize  the SAIF
     insurance fund.
(2)  The cumulative  effect of accounting  change  reflects the adoption of SFAS
     No. 109 for fiscal year 1994.
(3)  Earnings per share is based on net income  subsequent to the  Conversion on
     June 27, 1994.

                                      - 6 -


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Mid Continent Bancshares, Inc.
================================================================================

MARKET AND DIVIDEND INFORMATION
-------------------------------

Mid  Continent  Bancshares,  Inc.'s  common stock trades on the Nasdaq  National
Market system under the symbol "MCBS":

The following  table sets forth the  quarterly  high and low sale prices for the
common stock throughout the fiscal years ended September 30, 1995 and 1996:
<TABLE>
<CAPTION>

                  Quarter Ended                                  High              Low
<S>                                                            <C>               <C>
                  September 30, 1994                           $13               $11 1/4
                  December 31, 1994                             11 1/2             9 5/8
                  March 31, 1995                                13 3/8            10 1/8
                  June 30, 1995                                 16 1/4            13
                  September 30, 1995                            19 1/8            15 1/2
                  December 31, 1995                             18 1/2            17
                  March 31, 1996                                18 1/2            17 3/8
                  June 30, 1996                                 19 1/4            17 7/8
                  September 30, 1996                            19 3/8            17 1/2
</TABLE>

During the years ended  September  30, 1995 and 1996,  the Bancorp  declared and
paid cash dividends to shareholders as follows:
<TABLE>
<CAPTION>

Declaration Date              Shareholder Record Date         Payment Date                  Amount Per Share
----------------           --------------------------         ------------                  ----------------
<S>                           <C>                             <C>                                 <C>  
December 19, 1994             December 31, 1994               January 20, 1995                    $0.10
March 23, 1995                April 5, 1995                   April 19, 1995                       0.10
June 29, 1995                 July 13, 1995                   July 27, 1995                        0.10
September 27, 1995            October 11, 1995                October 25, 1995                     0.10
December 21, 1995             January 4, 1996                 January 18, 1996                     0.10
March 28, 1996                April 11, 1996                  April 25, 1996                       0.10
June 27, 1996                 July 11, 1996                   July 25, 1996                        0.10
September 26, 1996            October 10, 1996                October 24, 1996                     0.10
</TABLE>

According  to the  records  of the  Bancorp's  transfer  agent,  there  were 386
registered  stockholders  of record at  December  5, 1996.  This number does not
include any persons or entities who hold their stock in nominee or "street" name
through various brokerage firms.

The  Bancorp's  ability  to  pay  dividends  to  stockholders  is  substantially
dependent  upon the dividends it receives  from the Savings Bank.  Under current
regulations,  the  Savings  Bank  is  not  permitted  to  pay  dividends  if its
regulatory  capital  would thereby be reduced below (1) the amount then required
for the  liquidation  account  established in connection with the Savings Bank's
conversion from mutual to stock form, or (2) the regulatory capital requirements
imposed by the Office of Thrift

                                      - 7 -


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Mid Continent Bancshares, Inc.
================================================================================

Supervision. Capital distributions are also subject to certain limitations based
on the Savings Bank's net income. See Note 1 of notes to consolidated  financial
statements. The Savings Bank's total capital at September 30, 1996, exceeded the
amounts of its liquidation account and regulatory capital requirements.

                                      - 8 -


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Mid Continent Bancshares, Inc.
================================================================================

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars in thousands)

GENERAL
-------
On June 27, 1994,  Mid-Continent  Federal  Savings Bank completed its conversion
(the  "Conversion")   from  a  federally   chartered  mutual  savings  and  loan
association to a federally  chartered stock savings bank and was  simultaneously
acquired by Mid  Continent  Bancshares,  Inc., a Kansas  corporation,  which was
formed  to act as the  holding  company  of the  Savings  Bank.  At the  date of
conversion,  the Bancorp completed the sale of 2,248,250 shares of common stock,
$.10 par value,  through  concurrent  Subscription  and  Community  Offerings at
$10.00 per share. Net proceeds from the Conversion, after recognizing Conversion
expenses and  underwriting  costs of $754, were $21,729.  From the net proceeds,
the Bancorp  used  $11,200 to purchase  all of the capital  stock of the Savings
Bank and $1,360 to fund the purchase of 136,000  shares of the Bancorp  stock by
the Employee Stock Ownership Plan.

Mid Continent Bancshares, Inc. was formed to purchase all of the common stock of
Mid-Continent  Federal  Savings  Bank in  connection  with  the  Savings  Bank's
conversion  from the mutual to the stock form of ownership in 1994. In addition,
the Bancorp  made loans to the Savings Bank and to the Savings  Bank's  employee
stock  ownership plan, from which it receives  interest  income.  The loans bear
interest rates and have terms and conditions which prevailed in the market place
at the time they were originated.

The Bancorp's  consolidated results of operations are primarily dependent on the
Savings  Bank's net  interest  income,  or the  difference  between the interest
income earned on its loan,  mortgage-backed securities and investment securities
portfolios,  and the interest expense paid on its deposits and other borrowings.
Net interest  income is affected not only by the  difference  between the yields
earned on  interest-earning  assets and the costs  incurred on  interest-bearing
liabilities,  but also by the relative amounts of such  interest-earning  assets
and interest-bearing liabilities.

Other  components  of net  income  include:  provisions  for  losses  on  loans;
non-interest  income  (primarily,  loan origination and servicing fees;  service
fees and other charges to customers; gains on the sale of loans and gain on sale
of servicing rights); non-interest expense (primarily, compensation and employee
benefits;  federal  insurance  premiums;  office occupancy  expense;  and gains,
losses and expenses associated with foreclosed real estate); and income taxes.

Earnings  of the  Savings  Bank  are  significantly  affected  by  economic  and
competitive  conditions,  particularly  changes in  interest  rates,  government
policies and regulations of regulatory authorities.

MANAGEMENT STRATEGY
-------------------

The Savings Bank's lending strategy has focused  historically on the origination
of mortgage loans

                                      - 9 -


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Mid Continent Bancshares, Inc.
================================================================================

on one-to-four family residences pursuant to underwriting standards. The Savings
Bank  generally  retains  ownership  of  the   adjustable-rate   and  short-term
fixed-rate  loans it  originates  and sells  long-term  fixed-rate  loans in the
secondary  market;  accordingly,  its lending strategy is designed to reduce the
risk of  losses  on its  loan  portfolio.  However,  the high  concentration  of
residential  mortgage loans in its portfolio  subjects the Savings Bank to risks
associated  with  potential  declines in real estate values in its lending area.
This risk has been mitigated to some extent, however, through diversification in
its investment and mortgage-backed securities portfolios.

In an effort to reduce  interest  rate  risk and  protect  it from the  negative
effect of increases in interest rates,  the Savings Bank has instituted  certain
asset and liability  management  measures.  This strategy includes the following
primary  elements:  (i) originating and purchasing  long-term  fixed-rate  loans
primarily 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 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.  Loan  portfolios  traditionally  become
more seasoned and experience less turnover after 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 Savings Bank's loans and investments.

CHANGES IN FINANCIAL CONDITION FROM SEPTEMBER 30, 1995
------------------------------------------------------
TO SEPTEMBER 30, 1996
---------------------

Total assets increased $69,263, or 25.6%, from $270,923 at September 30, 1995 to
$340,186 at September  30, 1996.  The increase is  attributable  to increases of
$34,113 in  investment  securities  and  Federal  Home Loan Bank  (FHLB)  stock,
$46,362  in  loans   receivable,   and  $871  in  mortgage   servicing   rights.
Mortgage-related  securities  decreased $5,621 and loans held for sale decreased
$8,390.

Investment  securities  and FHLB stock  increased  from $56,449 at September 30,
1995 to  $90,562 at  September  30,  1996.  The  increase  is  primarily  due to
favorable  interest  rates  offered on these  securities  during the fiscal year
ending September 30, 1996. Included in the securities held at September 30, 1996
are $1,000 of "step-up" securities with an interest rate of 8.04% and a maturity
of 1996. If the securities  are not called at any of the  respective  call dates
the  interest  rate will  increase.  Also  included  at  September  30, 1996 are
callable  securities  with a carrying  value of  approximately  $76,801  bearing
interest at various rates ranging from 4.98% to 8.50% with stated maturity dates
ranging from 1996 to 2011. The Savings Bank intends to hold these  securities to
maturity, but the securities are subject to call at the option of the issuer.

Loans  receivable  increased  from $124,796 at September 30, 1995 to $171,158 at
September 30,

                                      - 10 -


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Mid Continent Bancshares, Inc.
================================================================================

1996. This increase is due primarily to increases in  adjustable-rate  mortgages
and  short-term  fixed-rate  mortgage  loans being held for  investment and to a
lesser extent to increases in the construction  and consumer lending  portfolio.
First mortgage loans increased $48,440 and consumer loans increased $1,167.  The
Bank expects to increase its  residential  (one-to-four  unit),  first mortgage,
loans in fiscial 1997,  but not to the extent that these loans were increased in
fiscal 1996.

Mortgage  servicing rights increased $871 during fiscal 1996.  During the fiscal
year the  Savings  Bank  increased  its  servicing  portfolio  for  others  from
$1,189,892 to $1,229,153.

Deposit accounts increased $18,777 primarily from savings  certificate  accounts
which increased $13,635. Demand and NOW account deposit accounts decreased $712.
Demand and NOW accounts  which  totaled  $36,785 at September 30, 1996 provide a
significant amount of low interest-rate funds and a source of service fee income
to the Savings Bank.

Advances  from the Federal  Home Loan Bank  increased  $48,700  from  $33,000 at
September 30, 1995 to $81,700 at September  30, 1996.  The Savings Bank utilizes
advances  from the Federal  Home Loan Bank to meet its cash needs as they arise.
The Savings  Bank has a $54,400  line of credit with the Federal Home Loan Bank,
subject  to  certain  limitations,  for  the  purpose  of  providing  short-term
financing.  At September 30, 1996, $15,700 was outstanding relative to this line
of credit.

Stockholders' equity increased $72, or 0.2%, from $36,735 to $36,807. Net income
for the year was $3,126.

Other  significant  transactions  during the year  included the  acquisition  of
151,500  shares of the  Bancorp's  common stock for treasury at a cost of $2,730
and cash  dividends  paid or payable  to common  stockholders  of $769.  See the
accompanying Consolidated Statements of Stockholders' Equity for more detail.

                                     - 11 -


<PAGE>

Mid Continent Bancshares, Inc.
================================================================================

COMPARISON OF OPERATING RESULTS FOR YEARS
-----------------------------------------
ENDED SEPTEMBER 30, 1994 AND 1995
---------------------------------

GENERAL
-------
Net income before cumulative effect of change in accounting  principle increased
from  $1,865 in 1994 to $4,106 in 1995.  Net  income  increased  by  $2,105,  or
105.2%, from $2,001 for the year ended September 30, 1994 to $4,106 for the year
ended September 30, 1995.

TOTAL INTEREST INCOME
---------------------
Total interest  income  increased  $4,676,  or 40.5%, to $16,225 during the year
ended  September  30, 1995 from $11,549 for the year ended  September  30, 1994.
Interest  income on loans  receivable  and on  investment  securities  increased
$3,448 and $1,513, respectively.  The average yield on loans declined from 8.08%
in 1994 to 7.95% in 1995,  but  increases in the loan  portfolio  resulted in an
increase in loan  interest in 1995 over 1994.  The average  yield of  investment
securities  increased from 5.66% in 1994 to 6.92% in 1995. The increase in rates
prompted more investment in securities and increased  revenue resulted from both
volume and rate increases.  Interest on mortgage-related securities decreased $9
as  mortgage-related  securities  were allowed to repay in the amount of $4,985.
The average yield on mortgage-related securities increased from 6.84% in 1994 to
6.92% in 1995,  but as  rates  increased,  increased  repayments  took  place in
amounts   sufficient  to  result  in  an  overall   decrease  in  interest  from
mortgage-related securities. Other interest income decreased $276 due to reduced
average cash balances.  The average rate of interest earned on  interest-bearing
cash accounts increased from 1994 to 1995, but the demand for cash to fund loans
and  investment  securities,  which paid  higher  yields,  reduced  the  overall
interest yield from cash accounts.

NET INTEREST INCOME
-------------------
Net interest  income  increased  $1,616,  or 28.8%,  from $5,605 during the year
ended  September 30, 1994 to $7,221 for the year ended  September 30, 1995.  The
average interest-earnings assets increased $52,316 from 1994 to 1995. Components
of the  interest-earning  assets are discussed above.  Overall the average yield
increased  from 6.99% in 1994 to 7.46% in 1995.  The major  increase in interest
income was due to the increase in interest-earning  assets with a lesser benefit
from rate increases.

Average  interest-bearing  liabilities increased $42,678 from 1994 to 1995. Both
deposit accounts and borrowed money increased in 1995. Average rates on deposits
increased  from 3.65% in 1994 to 4.35% in 1995.  The  average  interest  rate on
borrowed money,  however,  declined from 9.47% in 1994 to 6.33% in 1995. Overall
rates on interest-bearing  liabilities  increased from 3.88% in 1994 to 4.59% in
1995.

The ratio of average  interest-bearing  assets to  interest-bearing  liabilities
increased from 107.7% at September 30, 1994 to 110.9% at September 30, 1995.

                                     - 12 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

PROVISION FOR LOSSES ON LOANS
-----------------------------
The Savings Bank  currently  maintains  an allowance  for loan losses based upon
management's  periodic  evaluation  of  known  and  inherent  risks  in the loan
portfolio, the Savings Bank's past loss experience,  adverse situations that may
affect the borrowers' ability to repay loans,  estimated value of the underlying
collateral and current and expected  market  conditions.  The allowance for loan
losses  was $275 and $423 at  September  30,  1994 and 1995,  respectively.  The
provision for losses on loans  increased  $218 for the year ended  September 30,
1995. The increase in the provision resulted from management's evaluation of the
adequacy of the allowance for loan losses.  While the Savings Bank maintains its
allowance for losses at a level which it considers to be adequate to provide for
potential  losses,  there can be no assurance that further additions will not be
made to the loss  allowances  and that such losses will not exceed the estimated
amounts.

OTHER INCOME
------------
Other income  increased  $3,953,  or 104%,  during the year ended  September 30,
1995,  as compared to the year ended  September  30,  1994.  This  increase  was
primarily  attributable to increased loan servicing fees (net of  amortization),
service fees and other  charges to customers  and a gain on the sale of mortgage
servicing rights.

Loan servicing fees (net of amortization)  increased by $1,312,  or 73.3%,  from
$1,790  to  $3,102  during  the  years  ended   September  30,  1994  and  1995,
respectively.  Servicing  fees  result  primarily  from  service  fees  paid  by
investors and correlate  closely with the size of the loan servicing  portfolio.
The  increase in servicing  fees during the year ended  September  30, 1995,  is
reflective of the increase in the amount of loans serviced by Mid-Continent  for
others from  $908,112 at September 30, 1994 to $1,189,892 at September 30, 1995.
Amortization of mortgage  servicing rights increased by $406, or 45.2%,  because
of the effects of the increased  servicing  portfolio,  scheduled  amortization,
prepayments and anticipated prepayments of loans.

Service fees and other charges to customers  increased by $814,  or 78.9%,  from
$1,032  to  $1,846  during  the  years  ended   September  30,  1994  and  1995,
respectively.  This  source of income is  primarily  a function of the amount of
deposits and the fees for deposit-related  services charged by the Savings Bank.
A primary source of this income is the Bank's high performance  checking account
programs.  The Bank also receives late charges related to loans serviced for the
Bank, as well as loans serviced for others.

During the fiscal year ended  September 30, 1995,  gains on the sale of mortgage
servicing  rights  were  realized  in the amount of  $1,961.  The  Savings  Bank
periodically  evaluates  its servicing  portfolio.  In the latter half of fiscal
1994  interest  rates rose and the value of the Savings  Bank's  loan  servicing
rights increased. The rise in value afforded the Savings Bank the opportunity in
1995 to restructure a portion of its servicing portfolio by selling a portion of
its loan servicing for FNMA and FHLMC. Sales of rights to approximately $304,400
of loans resulted in a pre-tax gain of approximately  $1,961. The funds provided
by the sales were reinvested in servicing product for GNMA. A service

                                     - 13 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

fee  enhancement  resulted  in that GNMA  service  fees  yield 44 basis  points,
whereas  FNMA and FHLMC  servicing  yields 25 basis  points.  The  Savings  Bank
intends to continuously  monitor the value of its mortgage loan  servicing.  The
gains recognized should not be viewed as indicative of future servicing revenue.

At September 30, 1995, the Savings Bank was servicing  approximately  $1,189,892
of mortgage  loans for others.  At  September  30,  1994,  the Savings  Bank was
servicing  approximately  $908,112 of mortgage  loans for others.  The growth in
gross servicing fees was 63.9% and net servicing fees was 73.3%.

Net gains on sale of loans decreased by $190, or 21.2%, from $896 to $706 during
the years  ended  September  30,  1994 and 1995,  respectively.  The gains  were
attributable to the Savings Bank's secondary market activities and result from a
combination of interest rates and management strategies.

Gains  on the  sale of  loans  were  enhanced  in 1995  upon  implementation  of
Financial  Accounting  Standards Board Statement of Accounting Standards No. 122
(SFAS No. 122),  Accounting for Mortgage Servicing Rights,  effective October 1,
1994. Implementation of this standard increased the gain on the sale of loans in
1995 in the amount of $426 ($267 after income tax). Prior to  implementation  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 any
mortgage  servicing rights  attributable to the loans being sold. This offset is
no longer  required  under SFAS No.  122.  Further,  SFAS No. 122  requires  the
recognition of mortgage  servicing  rights related to Savings Bank's  originated
loans which are sold with servicing rights retained. These two provision of SFAS
No.  122  enhanced  gain on the sale of loans in the  amounts  of $185 and $241,
respectively.  The effect of SFAS No. 122 on  quarterly  net income and earnings
per share is discussed in footnote 20 of the notes to the consolidated financial
statements.

Gains from the sale of loans are  dependent  on market and  economic  conditions
and,  accordingly,  there can be no assurance that the gains reported in current
periods  can be  achieved  in the future or that  there will not be  significant
variations in the results from such activities.

OTHER EXPENSE
-------------
Other expense  increased by $1,862,  or 29.4%,  from $6,340 to $8,202 during the
years  ended  September  30,  1994 and  1995,  respectively.  This  increase  is
primarily attributable to increases in salaries and related expenses, occupancy,
professional  fees,  office  supplies  and  related  expense,   advertising  and
promotion and other expense.

Compensation  and employee  benefits  increased  $1,037,  or 32.3%, in 1995 over
1994. The increase is due to normal annual salary  adjustments and employment of
personnel  necessary to carry out the business  activities  of the Savings Bank.
Additionally, the Savings Bank recognized $171 related to

                                     - 14 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

the Employee Stock Ownership  Plan,  $141 for the Directors  Retirement Plan and
$249 for the Management Stock Bonus Plan in the 1995 year.

Occupancy and office supplies  expense  increased $88 and $119,  respectively in
1995 over 1994.  During 1995 the Savings Bank opened one new full service branch
in Wichita, Kansas.

Professional  fees increased $153 in 1995 over 1994.  Additional legal fees were
incurred in 1995 in the amount of $103.  Added legal  expense was  incurred as a
result of  becoming a publicly  held  company,  the legal fees  incurred  in the
design, approval from applicable parties and implementation of various director,
officer  and  employee  benefit  programs  and the filing of a claim in the U.S.
Court of Claims  related to  supervisory  goodwill (see Other Matters  section).
Professional  consultants  were also  retained  to assist in the  management  of
corporate assets and liabilities and strategic planning.

Advertising increased $85 in the fiscal year 1995 over fiscal 1994.  Advertising
was increased  primarily to promote the Savings Bank's checking account programs
and promote the new full service branch in Wichita, Kansas.

Deposit account  expense,  related  primarily to operation of the Savings Bank's
checking  account  programs,  increased  from $139 in 1994 to $227 in 1995.  The
Savings Bank intends to expand its checking account and deposit account programs
in the future.

Miscellaneous  loan  servicing  expense  increased $73 in 1995 over 1994.  These
expenses are directly  related to the servicing of loans for others,  as well as
for the Savings Bank,  and can be expected to rise as the Savings Bank grows and
expands its servicing  portfolio for others. See footnote 18 to the consolidated
financial statements,  Segment Information, for more information relative to the
operation of the mortgage  banking  segment  (which  includes loan servicing for
others) of the Savings Bank.

Operating  expenses  have  increased in recent  years due to the Savings  Bank's
increased  mortgage banking  operations.  For the year ended September 30, 1995,
operating  expenses  totaled 3.5% of average assets, a decrease from the 3.6% of
average  assets  recorded for the year ended  September 30, 1994.  The operating
expense ratios are attributable to loan production and loan servicing activities
(which incur  operating  expenses),  and general  inflationary  pressures on the
Savings  Bank's  operations.  Although  operating  expenses could be expected to
decline  somewhat if loan  production  levels decline,  certain  expenses should
increase as a result of being a public company.

INCOME TAX EXPENSE
------------------
Income tax expense increased $1,248 from $1,195 for the year ended September 30,
1994 to $2,443 for the year ended September 30, 1995. The primary reason for the
increase was a $3,489  increase in pre-tax  income.  The effective  rate for the
year ended September 30, 1994 was 39.1% as compared to 37.3% for 1995.

                                     - 15 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

COMPARISON OF OPERATING RESULTS FOR YEARS
-----------------------------------------
ENDED SEPTEMBER 30, 1995 AND 1996
---------------------------------

GENERAL
-------
Net income decreased by $980, or 23.9%, from $4,106 for the year ended September
30, 1995 to $3,126 for the year ended September 30, 1996.

TOTAL INTEREST INCOME
---------------------
Total interest  income  increased  $3,948,  or 24.3%, to $20,173 during the year
ended  September  30, 1996 from $16,225 for the year ended  September  30, 1995.
Interest  income on loans  receivable  and on  investment  securities  increased
$1,413 and $2,669, respectively.  The average yield on loans declined from 7.95%
in 1995 to 7.76% in 1996,  but  increases in the loan  portfolio  resulted in an
increase in loan  interest in 1996 over 1995.  The average  yield of  investment
securities  increased from 6.92% in 1995 to 7.15% in 1996. The increase in rates
prompted more investment in securities and increased  revenue resulted from both
volume and rate increases. Interest on mortgage-related securities decreased $84
as  mortgage-related  securities  were allowed to repay in the amount of $6,746.
The average yield on mortgage-related securities increased from 6.92% in 1995 to
7.36% in 1996,  but as  rates  increased,  increased  repayments  took  place in
amounts   sufficient  to  result  in  an  overall   decrease  in  interest  from
mortgage-related  securities. Other interest income decreased $50 due to reduced
average cash balances.  The average rate of interest earned on  interest-bearing
cash  accounts  decreased  from 1995 to 1996,  plus the  demand for cash to fund
loans and investment  securities,  which paid higher yields, reduced the overall
interest yield from cash accounts.

NET INTEREST INCOME
-------------------
Net interest  income  increased $684, or 9.5%, from $7,221 during the year ended
September  30,  1995 to $7,905  for the year ended  September  30,  1996.  Total
average  interest-earning assets increased $53,094 from 1995 to 1996. Components
of the  interest-earning  assets are discussed above.  Overall the average yield
remained unchanged,  at 7.46%, for 1995 and 1996. The major increase in interest
income was due to the increase in interest-earning  assets with a lesser benefit
from  individual rate increases,  primarily on  mortgage-related  securities and
investment securities.

Average  interest-bearing  liabilities increased $53,614 from 1995 to 1996. Both
deposit accounts and borrowed money increased in 1996. Average rates on deposits
increased  from 4.35% in 1995 to 4.63% in 1996.  The  average  interest  rate on
borrowed money,  however,  declined from 6.33% in 1995 to 6.21% in 1996. Overall
rates on interest-bearing  liabilities  increased from 4.59% in 1995 to 4.91% in
1996.

The ratio of average  interest-bearing  assets to  interest-bearing  liabilities
decreased from 110.9% at September 30, 1995 to 108.4% at September 30, 1996.

                                     - 16 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

PROVISION FOR LOSSES ON LOANS
-----------------------------
The Savings Bank  currently  maintains  an allowance  for loan losses based upon
management's  periodic  evaluation  of  known  and  inherent  risks  in the loan
portfolio, the Savings Bank's past loss experience,  adverse situations that may
affect the borrowers' ability to repay loans,  estimated value of the underlying
collateral and current and expected  market  conditions.  The allowance for loan
losses  was $423 and $421 at  September  30,  1995 and 1996,  respectively.  The
provision for losses on loans  decreased  $149 for the year ended  September 30,
1996. The decrease in the provision resulted from management's evaluation of the
adequacy of the allowance for loan losses.  While the Savings Bank maintains its
allowance for losses at a level which it considers to be adequate to provide for
potential  losses,  there can be no assurance that further additions will not be
made to the loss  allowances  and that such losses will not exceed the estimated
amounts.

OTHER INCOME
------------
Other income decreased $582, or 7.5%,  during the year ended September 30, 1996,
as  compared  to the year  ended  September  30,  1995.  During  the year  ended
September  30,  1995,  the Bank  realized  gain on sale of  servicing  rights of
$1,961.  There was no sales of servicing  rights in the year ended September 30,
1996. All other  significant  sources of other income increased in 1996 compared
to 1995.

Loan servicing fees (net of amortization) increased by $26, or 0.8%, from $3,102
to $3,128  during the years ended  September  30,  1995 and 1996,  respectively.
Servicing  fees  result  primarily  from  service  fees  paid by  investors  and
correlate closely with the size of the loan servicing portfolio. The increase in
servicing  fees during the year ended  September  30, 1996, is reflective of the
increase  in the amount of loans  serviced  by  Mid-Continent  for  others  from
$1,189,892   at  September  30,  1995  to  $1,229,153  at  September  30,  1996.
Amortization of mortgage  servicing rights increased by $346, or 26.5%,  because
of the effects of the increased  servicing  portfolio,  scheduled  amortization,
prepayments and anticipated  prepayments of loans. The growth in gross servicing
fees was 8.4% and net servicing fees was 0.8%.

Service fees and other charges to customers  increased by $693,  or 37.5%,  from
$1,846  to  $2,539  during  the  years  ended   September  30,  1995  and  1996,
respectively.  This  source of income is  primarily  a function of the amount of
deposits and the fees for deposit-related  services charged by the Savings Bank.
A primary source of this income is the Bank's high performance  checking account
program.  The Bank also receives late charges  related to loans serviced for the
Bank, as well as serviced for others.

Net gains on sale of loans  increased  by $661,  or  93.6%,  from $706 to $1,367
during the years ended September 30, 1995 and 1996, respectively. The gains were
attributable to the Savings Bank's secondary market activities and result from a
combination of interest rates and management strategies.  Gains from the sale of
loans are dependent on market and economic  conditions and,  

                                     - 17 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

accordingly,  there can be no  assurance  that the  gains  reported  in  current
periods  can be  achieved  in the future or that  there will not be  significant
variations in the results from such activities.

OTHER EXPENSE
-------------
Other expense  increased by $1,781,  or 21.7%,  from $8,202 to $9,983 during the
years  ended  September  30,  1995 and  1996,  respectively.  This  increase  is
primarily  attributable  to increases in salaries and related  expenses,  office
supplies  and related  expense,  advertising,  federal  insurance  premiums  and
promotion.

Compensation and employee  benefits  increased $291, or 6.9%, in 1996 over 1995.
The  increase is due to normal  annual  salary  adjustments  and  employment  of
personnel necessary to carry out the business activities of the Savings Bank.

Occupancy decreased $22 and office supplies expense increased $114, in 1996 over
1995.  During  1996 the  Savings  Bank  opened  one new full  service  branch in
Wichita, Kansas.

Data processing costs increased $135 in support of additional  branch operations
and in response to mortgage banking (including servicing) demands.

Advertising increased $34 in the fiscal year 1996 over fiscal 1995.  Advertising
was increased primarily to promote the Savings Bank's checking account programs.

Federal insurance  premiums increased from $351 for the year ended September 30,
1995 to $1,504 for the year ended  September 30, 1996. On September 30, 1996 the
Economic Growth and Regulatory  Paperwork  Reduction Act of 1996 was signed into
law. The Act imposed a special  assessment on SAIF members to  recapitalize  the
SAIF. The Bank's assessment was $1,053 which was charged to expense immediately.
The rate of deposit  insurance  assessment is expected to materially  decline in
future periods.

Deposit account  expense,  related  primarily to operation of the Savings Bank's
checking  account  programs,  increased  from $227 in 1995 to $298 in 1996.  The
Savings Bank intends to expand its checking account and deposit account programs
in the future.

Miscellaneous  loan servicing  expense  increased $149 in 1996 over 1995.  These
expenses are directly  related to the servicing of loans for others,  as well as
for the Savings Bank,  and can be expected to rise as the Savings Bank grows and
expands its servicing  portfolio for others. See footnote 18 to the consolidated
financial statements,  Segment Information, for more information relative to the
operation of the mortgage  banking  segment  (which  includes loan servicing for
others) of the Savings Bank.

Operating  expenses  have  increased in recent  years due to the Savings  Bank's
increased  mortgage 

                                     - 18 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

banking  operations.  For the year ended September 30, 1996,  operating expenses
totaled  3.4% of  average  assets,  a decrease  from the 3.5% of average  assets
recorded for the year ended September 30, 1995. The operating expense ratios are
attributable  to loan  production  and loan  servicing  activities  (which incur
operating expenses),  and general  inflationary  pressures on the Savings Bank's
operations. Although operating expenses could be expected to decline somewhat if
loan production levels decline,  certain expenses should increase as a result of
being a public company.

INCOME TAX EXPENSE
------------------

Income tax expense  decreased $550 from $2,443 for the year ended  September 30,
1995 to $1,893 for the year ended September 30, 1996. The primary reason for the
decrease was a $1,530  decrease in pre-tax  income.  The effective  rate for the
year ended September 30, 1995 was 37.3% as compared to 37.7% for 1996.

AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
-------------------------------------------------------------------

The following table presents for the periods  indicated the total dollar amounts
of interest  income  from  average  interest  earning  assets and the  resultant
yields,  as  well  as the  interest  expense  on the  average  interest  bearing
liabilities,  expressed both in dollars and rates. Average balances for the year
1994 are derived from month-end  balances.  Average  balances for the years 1995
and 1996 are derived from daily  balances.  Management does not believe that the
use of month-end  balances instead of daily average balances for 1994 has caused
any material differences in the information presented.

                                     - 19 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================
<TABLE>
<CAPTION>
                                                                            Year Ended September 30,
                                   -------------------------------------------------------------------------------------------------
                                               1994                               1995                           1996
                                   -------------------------------  -------------------------------- -------------------------------
                                                          Average                           Average                         Average
                                   Average                Yield/      Average               Yield/   Average                Yield/
                                   Balance   Interest     Cost        Balance    Interest   Cost     Balance    Interest     Cost
                                   -------   --------     ----        -------    --------   ----     -------    --------     ----

Interest-earning assets:
<S>                                <C>       <C>        <C>          <C>        <C>        <C>      <C>       <C>         <C>  
  Loans receivable ............... $84,912      6862      8.08%      $129,687     10310      7.95%  $151,078     11723      7.76%
  Mortgage-related securities ....   44101      3015      6.84%         43430      3006      6.92%     39711      2922      7.36% 
  Investment securities ..........   18866      1068      5.66%         37322      2581      6.92%     73431      5250      7.15%
  Other interest-earning assets...   17277       604      3.50%          7033       328      4.66%      6346       278      4.38%
                                  --------   -------      ----       --------   -------      ----   --------   -------      ---- 
                                                                                                       
       Total interest-
         earning assets ........    165156   $11,549      6.99%        217472   $16,225      7.46%    270566   $20,173      7.46%
                                             =======      ====                  =======      ====              =======      ====

Non-interest-earning assets          10414                              17401                          20892
                                  --------                           --------                       --------
                  Total assets    $175,570                           $234,873                       $291,458
                                  ========                           ========                       ========

Interest-bearing liabilities:
   Passbook savings deposits ...   $10,504   $   243      2.31%        $8,710   $   239      2.74%    $8,634   $   238      2.76%
   NOW accounts and money market                                     
     demand deposits ...........     38498       605      1.57%         40131       565      1.41%     47285       756      1.60%
   Certificates of deposit .....     98409      4533      4.61%        123444      6697      5.43%    148922      8491      5.70%
   Other interest-bearing                                            
     liabilities ...............      5947       563      9.47%         23751      1503      6.33%     44809      2783      6.21%
                                  --------   -------      ----       --------   -------      ----   --------   -------      ----  
      Total interest-                                                
        bearing liabilities ....    153358   $ 5,944      3.88%        196036   $ 9,004      4.59%    249650   $12,268      4.91%
                                             =======      ====                  =======      ====

Non-interest-bearing 
  liabilities...................      3225                               4216                           5201
                                  --------                           --------                         ------
      Total liabilities             156583                             200252                         254851
Stockholder's equity                 18987                              34621                          36607
                                  --------                           --------                       --------
      Total liabilities and 
        stockholders' equity      $175,570                           $234,873                       $291,458
                                  ========                           ========                       ========  
Net interest income                           $5,605                             $7,221                         $7,905
                                             =======                            =======                        ======= 
Interest rate spread                                       3.11%                             2.87%                          2.55%
                                                           ====                              ====                           ====
Net yield on interest-
  bearing assets                                           3.39%                             3.32%                          2.92%
                                                           ====                              ====                           ==== 
Ratio of average interest-
  earning assets to average 
  interest-bearing liabilities                           107.69%                           110.93%                        108.38%
                                                         ======                            ======                         ====== 
</TABLE>

                                      -20-
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================

RATE/VOLUME ANALYSIS
--------------------

The following  schedule presents the dollar amount of changes in interest income
and interest  expense for the major  components of  interest-earning  assets and
interest-bearing  liabilities.  For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable to
(i) changes in volume (changes in average volume  multiplied by old rate);  (ii)
changes in rates  (changes  in rate  multiplied  by old average  volume);  (iii)
changes in  rate-volume  (changes  in rate  multiplied  by the change in average
volume).

<TABLE>
<CAPTION>
                                                         1994 vs. 1995                             1995 vs. 1996
                                           -----------------------------------------------------------------------------------------
                                                      Increase (Decrease)                       Increase (Decrease)
                                                           Due to                                     Due to
                                           -----------------------------------------------------------------------------------------
                                                                  Rate/                                       Rate/
                                            Volume      Rate      Volume       Net      Volume      Rate      Volume      Net
                                            ------      ----      ------       ---      ------      ----      ------      ---
Interest income:
<S>                                        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>    
   Loans receivable                        $ 3,616    ($  110)   ($   58)   $ 3,448    $ 1,701    ($  247)   ($   41)   $ 1,413
   Mortgage-related securities                 (43)        35         (1)        (9)      (258)       190        (16)       (84)
   Investment securities                     1,042        238        233      1,513      2,497         87         85      2,669
   Other interest-earning assets              (357)       200       (119)      (276)       (32)       (20)         2        (50)
                                           -------    -------    -------    -------    -------    -------    -------    ------- 
      Total interest-earning assets        $ 4,258    $   363    $    55    $ 4,676    $ 3,908    $    10    $    30    $ 3,948
                                           =======    =======    =======    =======    =======    =======    =======    =======

Interest expense:
   Passbook savings deposits               ($   41)   $    45    ($    8)   ($    4)   ($    2)   $     1    $     0    ($    1)
   NOW accounts and money market
    demand deposits                             25        (62)        (3)       (40)       100         77         14        191
   Certificates of deposit                    1154        805        206       2165       1383        341         70       1794
   Other interest-bearing liabilities         1686       (187)      (560)       939       1333        (28)       (25)      1280
                                           -------    -------    -------    -------    -------    -------    -------    -------
      Total interest-bearing liabilities   $ 2,824    $   601    ($  365)   $ 3,060    $ 2,814    $   391    $    59    $ 3,264
                                           =======    =======    =======    =======    =======    =======    =======    =======

Net change in net interest income          $ 1,434    ($  238)   $   420    $ 1,616    $ 1,094    ($  381)   ($   29)   $   684
                                           =======    =======    =======    =======    =======    =======    =======    =======
</TABLE>
 
                                  -21-
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Savings Bank is required to maintain minimum levels of "liquid  assets",  as
defined  by  the  Office  of  Thrift  Supervision  ("OTS")   regulations.   This
requirement,  which may be  varied  from time to time  depending  upon  economic
conditions  and  deposit  flows,  is based upon a  percentage  of  deposits  and
short-term  borrowings.  The required minimum ratio is currently 5 percent.  The
Savings Bank's average liquidity ratio was 7.9% percent during September,  1996.
The  Savings  Bank  manages  its  liquidity  ratio  to meet its  funding  needs,
including:  deposit outflows;  disbursement of payments collected from borrowers
for taxes and insurance;  repayment of Federal Home Loan Bank advances and other
borrowings; and loan principal disbursements. The Savings Bank also monitors its
liquidity position in accordance with its asset/liability management objectives.

In addition to funds  provided  from  operations,  the  Savings  Bank's  primary
sources  of funds  are:  savings  deposits;  principal  repayments  on loans and
mortgage-backed  securities;  and matured or called investment  securities.  The
Savings  Bank also  borrows  funds from time to time from the Federal  Home Loan
Bank of Topeka (the "FHLB").

Scheduled loan  repayments and maturing  investment  securities are a relatively
predictable source of funds.  However,  savings deposit flows and prepayments on
loans and mortgage-backed  securities are significantly influenced by changes in
market interest rates,  economic  conditions and  competition.  The Savings Bank
strives to manage the pricing of its  deposits to maintain a balanced  stream of
cash flows commensurate with its loan commitments and other predictable  funding
needs.

The  Savings  Bank  usually   maintains  a  portion  of  its  cash  on  hand  in
interest-bearing demand deposits with the FHLB to meet immediate loan commitment
and savings withdrawal funding requirements.  When applicable, cash in excess of
immediate   funding  needs  is  invested   into   longer-term   investment   and
mortgage-backed securities, some of which may also qualify as liquid investments
under current OTS regulations.

The Savings Bank has a $54,400 line of credit with the FHLB which may be used to
provide  funds  necessary  to cover cash  shortages  on a daily  basis,  and the
ability to obtain various other FHLB advances up to a total  borrowing  limit of
approximately  $200,000,  the amount of the Banks  residential  housing  finance
assets.  At September  30, 1996,  the Savings Bank had total FHLB  borrowings of
$81,700.

Management believes the Savings Bank has sufficient  resources available to meet
its foreseeable  funding  requirements.  At September 30, 1996, the Savings Bank
had  outstanding  loan  commitments  of  $63,743,  and  certificates  of deposit
scheduled to mature within one year of $97,575.

As required by the Financial  Institutions Reform,  Recovery and Enforcement Act
of 1989  ("FIRREA"),  the  Savings  Bank  must  meet or  exceed  three  separate
standards of capital adequacy. OTS regulations require financial institutions to
have minimum  tangible  capital equal to 1.50 percent of total adjusted  assets;
minimum  core  capital  equal to 3.00  percent  of total  adjusted  assets;  and
risk-based capital equal

                                     - 22 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

to 8.00 percent of total risk-weighted assets.

The  Savings  Bank's  capital  requirements  and  actual  capital  under the OTS
regulations were as follows at September 30, 1996:

                                                     Amount         Percent of
                                                  (Thousands)        Adjusted
                                                                      Assets
                                                -----------         -----------
Tangible capital:
      Actual amount                                 $31,827            9.3%
      Required amount                                 5,122            1.5%
                                                     ------            ----
          Excess                                     26,705            7.8%
                                                     ======            ====
Core capital:
      Actual amount                                  31,827            9.3%
      Required amount                                10,244            3.0%
                                                     ------            ----
          Excess                                     21,583            6.3%
                                                     ======            ====
Risk-based capital:
      Actual amount                                  32,281           24.5%
      Required amount                                10,551            8.0%
                                                     ------            ----
          Excess                                     21,730           16.5%
                                                     ======           =====



OTHER MATTERS
-------------

LEGAL PROCEEDINGS
-----------------
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.

                                     - 23 -


<PAGE>


Mid Continent Bancshares, Inc.
================================================================================


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.

                                     - 24 -


<PAGE>




MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

TABLE OF CONTENTS
-----------------------------------------------------------------------------


                                                                         Page

INDEPENDENT AUDITORS' REPORT ON FINANCIAL
  STATEMENTS                                                               

CONSOLIDATED FINANCIAL STATEMENTS:

  Consolidated Balance Sheets as of September 30, 1995 and 1996           27

  Consolidated Statements of Income for the Years Ended
   September 30, 1994, 1995 and 1996                                      29

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

  Consolidated Statements of Cash Flows for the Years Ended
   September 30, 1994, 1995 and 1996                                      31

  Notes to Consolidated Financial Statements for the Years Ended
   September 30, 1994, 1995 and 1996                                      33





                                      -25-

<PAGE>

[CORPORATE LOGO]     Suite 400                       Telephone: (416) 474-6180
                     1010 Grand Avenue
                     Kansas City, Missouri 64106-2232


INDEPENDENT AUDITORS' REPORT


Board of Directors
Mid Continent Bancshares, Inc.
El Dorado, Kansas

We have audited the  accompanying  consolidated  balance sheets of Mid Continent
Bancshares,  Inc. and  subsidiary  (the  "Company") as of September 30, 1995 and
1996, and the related  consolidated  statements of income,  stockholders' equity
and cash flows for each of the three  years in the period  ended  September  30,
1996.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the  financial  position of the Company as of September 30,
1995 and 1996, and the results of their operations and their cash flows for each
of the three years in the period ended  September  30, 1996 in  conformity  with
generally accepted accounting principles.

As discussed in Note 2 to the  consolidated  financial  statements,  the Company
changed its method of  accounting  for  mortgage  servicing  rights for the year
ended  September 30, 1995 and changed its method of accounting  for income taxes
for the year ended September 30, 1994.


/s/ Deloitte & Touche LLP


November 12, 1996



Deloitte Touche
Tohmatsu
International




                                      -26-




<PAGE>

MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND 1996
(Dollars in thousands, except share amounts)
-------------------------------------------------------------------------------


ASSETS                                                       1995        1996

CASH AND CASH EQUIVALENTS:
  Cash and amounts due from depository institutions       $  1,187      1,694
  Interest bearing deposits in other banks                   4,490      3,924
                                                          --------   --------
           Total cash and cash equivalents                   5,677      5,618

INVESTMENT SECURITIES, At cost (Market value of $53,978
  and $83,827)                                              54,243     86,235

CAPITAL STOCK OF FEDERAL HOME LOAN BANK, At cost             2,206      4,327

MORTGAGE-RELATED SECURITIES, At cost (Market value of
  $40,342 and $34,366)                                      40,004     34,383

LOANS HELD FOR SALE (Market value of $22,335
  and $13,816)                                              22,108     13,718

LOANS RECEIVABLE (Less allowance for loan losses
  of $423 and $421)                                        124,796    171,158

PREMISES AND EQUIPMENT, Net                                  4,757      6,271

REAL ESTATE OWNED (Less allowance for losses of
  $51 and $34)                                                 187         28

ACCRUED INTEREST RECEIVABLE:
  Loans receivable                                           1,111      1,285
  Mortgage-related securities                                  291        262
  Investment securities                                        817      1,197
                                                          --------   --------
           Total accrued interest receivable                 2,219      2,744

EXCESS OF COST OVER FAIR VALUE OF ASSETS ACQUIRED
  (Less accumulated amortization of $994 and $1,055)            83         22

MORTGAGE SERVICING RIGHTS, Net                              11,625     12,496

OTHER ASSETS                                                 3,018      3,186

TOTAL ASSETS                                              $270,923   $340,186
                                                          ========   ========


                                                                     (Continued)

                                      -27-


<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND 1996
(Dollars in thousands, except share amounts)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>


LIABILITIES AND STOCKHOLDERS' EQUITY                               1995         1996

<S>                                                             <C>         <C>      
DEPOSITS                                                        $ 195,716   $ 214,493

ADVANCE PAYMENTS BY BORROWERS FOR TAXES
  AND INSURANCE                                                     2,029       1,805

INCOME TAXES PAYABLE                                                  607

DEFERRED INCOME TAXES                                                 168         698

ACCRUED AND OTHER LIABILITIES                                       2,668       4,683

ADVANCES FROM FEDERAL HOME LOAN BANK                               33,000      81,700
                                                                ---------   ---------
           Total liabilities                                      234,188     303,379

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY:
  Preferred stock, no par value; 10,000,000 shares authorized,
    no shares issued or outstanding
  Common stock, $.10 par value, 20,000,000 shares authorized,
    2,248,250 shares issued                                           225         225
  Additional paid-in capital                                       21,553      21,663
  Unearned compensation - Employee Stock Ownership Plan            (1,190)     (1,054)
  Unearned compensation - Management Stock Bonus Plan                (746)       (547)
  Retained earnings, substantially restricted                      18,067      20,424
                                                                ---------   ---------
                                                                   37,909      40,711

  Treasury stock, 80,000 and 231,500 shares, at cost               (1,174)     (3,904)
                                                                ---------   ---------
           Total stockholders' equity                              36,735      36,807
                                                                ---------   ---------
TOTAL LIABILITIES AND STOCKHOLDER' EQUITY                       $ 270,923   $ 340,186
                                                                =========   =========
</TABLE>


See notes to consolidated financial statements 

                                      -28-


<PAGE>

MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996
(Dollars in thousands, except share amounts)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                1994        1995        1996
INTEREST INCOME:
<S>                                                                         <C>          <C>         <C>     
  Loans receivable                                                          $   6,862    $ 20,310    $ 11,723
  Mortgage-related securities                                                   3,015       3,006       2,922
  Investment securities                                                         1,068       2,581       5,250
  Other interest - cash and cash equivalents                                      604         328         278
                                                                               ------      ------      ------
          Total interest income                                                11,549      16,225      20,173
                                                                               ------      ------      ------

INTEREST EXPENSE:
  Deposits                                                                      5,380       7,501       9,485
  Advances from Federal Home Loan Bank                                            525       1,503       2,783
  Other borrowed funds                                                             39
                                                                               ------      ------      ------
          Total interest expense                                                5,944       9,004      12,268
                                                                               ------      ------      ------
NET INTEREST INCOME                                                             5,605       7,221       7,905

PROVISION FOR LOAN LOSSES                                                           6         224          75
                                                                               ------      ------      ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                             5,599       6,997       7,830

OTHER INCOME:
  Loan servicing fees                                                           2,689       4,407       4,779
  Amortization of mortgage servicing rights                                      (899)     (1,305)     (1,651)
  Gain on sale of mortgage servicing rights                                                 1,961
  Service fees and other charges to customers                                   1,032       1,846       2,539
  Gain on sale of loans held for sale, net                                        896         706       1,367
  Insurance commissions                                                           107         100          54
  Other                                                                           (24)         39          84
                                                                               ------      ------      ------
          Total other income                                                    3,801       7,754       7,172
                                                                               ------      ------      ------
OTHER EXPENSES:
  Salaries and employee benefits                                                3,208       4,245       4,536
  Occupancy of premises                                                           778         866         844
  Office supplies and related expenses                                            410         529         643
  Data processing                                                                 490         455         590
  Advertising and promotions                                                      329         414         448
  Federal insurance premiums                                                      330         351       1,504
  Professional services                                                           160         313         272
  Provision for losses on real estate owned                                        59          81          18
  Amortization of excess cost over fair value of assets acquired                   91          78          60
  Deposit accounts                                                                139         227         298
  Loan servicing                                                                  120         193         342
  Other                                                                           226         450         428
                                                                               ------      ------      ------
          Total other expenses                                                  6,340       8,202       9,983
                                                                               ------      ------      ------
INCOME BEFORE INCOME TAX EXPENSE AND CUMULATIVE EFFECT OF
  CHANGE IN ACCOUNTING FOR INCOME TAXES                                         3,060       6,549       5,019

INCOME TAX EXPENSE                                                              1,195       2,443       1,893
                                                                               ------      ------      ------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
  ACCOUNTING FOR INCOME TAXES                                                   1,865       4,106       3,126

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES                        136
                                                                               ------      ------      ------
NET INCOME                                                                  $   2,001     $ 4,106    $  3,126
                                                                               ======      ======      ======
EARNINGS PER SHARE (FROM JUNE 27, 1994):
  Income before cumulative effect of change in accounting for income taxes  $    0.30     $  1.97    $   1.59
                                                                               ======      ======      ======
  Net income                                                                $    0.30     $  1.97    $   1.59
                                                                               ======      ======      ======

See notes to consolidated financial statements.

</TABLE>

                                      -29-


<PAGE>
MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996
(Dollars in thousands, except share amounts)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            Unearned     Unearned
                                                                          Compensation- Compensation -
                                                                 Employee  Management    Retained
                                        Common Stock  Additional  Stock       Stock      Earnings,   Treasury Stock       Total
                                       --------------   Paid-In  Ownership    Bonus   Substantially ----------------   Stockholders'
                                       Shares  Amount   Capital     Plan      Plan      Restricted   Shares Amount        Equity
                                                                                                            
<S>                                 <C>          <C>   <C>        <C>         <C>        <C>       <C>       <C>       <C>     
BALANCE, October 1, 1993                                                                 $ 12,791                      $ 12,791

  Issuance of common stock, net      2,112,250   $211   20,158                                                           20,369

  Common stock issued to Employee 
    Stock Ownership Plan               136,000     14    1,346     (1,360)

  Common stock committed to be 
    released for allocation-
    Employee Stock Ownership Plan                                      48                                                    48

  Net income                                                                                2,001                         2,001
                                    ----------   ----  -------    -------       -----    --------  --------- -------     -------
BALANCE, September 30, 1994          2,248,250    225   21,504     (1,312)                 14,792                        35,209
 
  Acquisition of common stock 
   for Management Stock Bonus Plan                                            $  (995)                                     (995)
                             
  Acquisition of Treasury Stock                                                                       80,000 (1,174)     (1,174)

  Common stock committed to be 
    released for allocation-
    Employee Stock Ownership Plan                                     122                                                   122

  Increase in fair market value 
    of Employee Stock Ownership 
    Plan shares committed to 
    be released for allocation                              49                                                               49

  Amortization of unearned 
    compensation - Management 
    Stock Bonus Plan                                                              249                                       249

  Dividends on common stock to 
    stockholders                                                                             (831)                         (831)

Net income                                                                                  4,106                         4,106
                                    ----------   ----  -------    -------       -----    --------  --------- -------     -------
BALANCE, September 30, 1995          2,248,250    225   21,553     (1,190)       (746)     18,067     80,000  (1,174)    36,735

  Acquisition of Treasury Stock                                                                      151,500  (2,730)    (2,730)

  Common stock committed to 
    be released for allocation - 
    Employee Stock Ownership Plan                                     136                                                   136

  Increase in fair market value 
    of Employee Stock Ownership 
    Plan shares committed to
    be released for allocation                             110                                                              110

  Amortization of unearned 
    compensation - Management 
    Stock Bonus Plan                                                              199                                       199

  Dividends on common stock 
    to stockholders                                                                          (769)                         (769)

Net income                                                                                  3,126                         3,126
                                    ----------  ----   -------    -------       -----    --------  --------- -------     -------
BALANCE, September 30, 1996         $2,248,250  $225   $21,663    $(1,054)      $(547)   $ 20,424  $ 231,500 $(3,904)    $36,807
                                    ==========  ====   =======    =======       =====    ========  ========= =======     =======
</TABLE>
See notes to consolidated financial statements.

                                      -30-

<PAGE>
MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996
(Dollars in thousands, except share amounts)
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                               1994       1995       1996

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                         <C>        <C>          <C>     
  Net income                                                                $  2,001   $  4,106     $  3,126
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
    Cumulative effect of change in accounting for income taxes                  (136)
    Common stock committed to be released for allocation -
      Employee Stock Ownership Plan                                               48        122          136
    Increase in fair market value of Employee Stock Ownership
      Plan shares committed to be released for allocation                                    49          110
    Amortization of unearned compensation - Management
      Stock Bonus Plan                                                                      249          199
    Stock dividend on capital stock of Federal Home Loan Bank                                           (172)
    Amortization (accretion) of premiums and discounts on mortgage-
      related securities and investment securities, net                         (120)      (134)        (155)
    Provision for loan losses                                                      6        224           75
    Provision for losses on real estate owned                                     59         81           18
    Net loan origination fees capitalized                                        368        380        1,602
    Amortization of net deferred loan origination fees                          (116)      (371)        (168)
    Amortization of mortgage servicing rights                                    899      1,305        1,651
    Amortization of excess of cost over fair value of assets acquired             91         78           60
    (Gain) loss on sale of real estate owned, net                                 34         (7)         (34)
    Depreciation and amortization on premises and equipment                      358        393          344
    Gain on sale of premises and equipment                                                  (12)
    Gain on sale of loans held for sale, net                                    (896)      (706)      (1,367)
    Origination/purchase of loans held for sale                             (196,388)  (107,341)    (195,873)
    Proceeds from sale of loans held for sale                                219,491     91,466      205,630
    Gain on sale of mortgage servicing rights                                            (1,961)
    Provision (benefit) for deferred income taxes                                347       (225)         530
    Changes in:
      Accrued interest receivable                                               (263)      (935)        (525)
      Other assets                                                            (1,502)       (27)        (698)
      Income taxes payable                                                      (212)       607          (77)
      Accrued and other liabilities                                             (487)     1,091        2,028
                                                                            --------   --------     -------- 
            Net cash provided by (used in) operating activities               23,582    (11,568)      16,440
                                                                            --------   --------     -------- 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from maturities of investment securities                            1,300     10,100       29,000
  Purchases of investment securities                                         (10,371)   (42,000)     (62,753)
  Principal collected on mortgage-related securities                          14,097      4,985        6,746
  Purchases of mortgage-related securities                                   (16,310)                 (1,158)
  Loan originations net of principal collected on loans receivable           (45,608)   (23,171)     (48,069)
  Proceeds from sales of premises and equipment                                   43        117
  Acquisitions of mortgage servicing rights, net                              (3,968)    (8,423)      (2,522)
  Proceeds from sales of mortgage servicing rights                                        3,766
  Purchases of premises and equipment                                         (1,124)    (1,416)      (1,858)
  Proceeds from sales of real estate owned                                       427        170          374
                                                                            --------   --------     -------- 
            Net cash used in investing activities                            (61,514)   (55,872)     (80,240)
                                                                            --------   --------     -------- 
</TABLE>

                                                                    (Continued)

                                      -31-


<PAGE>

MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996
(Dollars in thousands, except share amounts)
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                  1994            1995        1996

CASH FLOWS FROM FINANCING ACTIVITIES:
<S>                                                             <C>           <C>          <C>      
  Receipts for deposits, net                                    $  8,926      $   40,952   $  18,779
  Increase (decrease) in advance payments
   by borrowers for taxes and insurance, net                         260             126        (225)
  Proceeds from advances from Federal Home Loan Bank               8,000          96,600     199,500
  Repayments on advances from Federal Home Loan Bank              (6,500)        (72,600)   (150,800)
  Acquisition of common stock for Management Stock Bonus Plan                       (995)
  Acquisition of treasury stock                                                   (1,174)     (2,730)
  Cash dividends on common stock to stockholders                                    (615)       (783)
  Issuance of common stock                                        20,369
                                                                  ------          ------      ------
           Net cash used in financing activities                  31,055          62,294      63,741
                                                                  ------          ------      ------

DECREASE IN CASH AND CASH EQUIVALENTS                             (6,877)         (5,146)        (59)

CASH AND CASH EQUIVALENTS:
  Beginning of year                                               17,700          10,823       5,677
                                                                  ------          ------      ------
  End of year                                                   $ 10,823      $    5,677   $   5,618
                                                                ========         ==========   =========
SUPPLEMENTAL DISCLOSURES OF
  CASH FLOW INFORMATION:
  Income tax payments, net of refunds                           $  1,414      $    1,708   $   2,424
                                                                ========         ==========   =========
  Interest payments, including interest credited to deposits
    of approximately $5,353, $7,218 and $9,434                  $  5,935      $    8,758   $  12,287
                                                                ========         ==========   =========

SUPPLEMENTAL DISCLOSURES OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:
  Loans held for sale securitized into mortgage-related
    securities                                                  $ 81,962         $   40,544   $  88,413
                                                                ========         ==========   =========

  Common stock issued to Employee Stock Ownership Plan          $  1,360
                                                                ========         ==========   =========

  Loans transferred to real estate owned                        $    212         $      386   $     238
                                                                ========         ==========   =========

  Loans made upon the sale of real estate owned                 $    373                      $      40
                                                                ========         ==========   =========

  Accrued dividends on common stock                                              $      204   $     190
                                                                                 ==========   =========

</TABLE>

See notes to consolidated financial statements.                     (Concluded)

                                      -32-





<PAGE>

MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996
(Dollars in thousands, except share amounts)
-----------------------------------------------------------------------------


1.  STOCK CONVERSION

    On November  23,  1993,  the Board of  Directors  of  Mid-Continent  Federal
    Savings  and Loan  Association  of El Dorado  unanimously  adopted a Plan of
    Conversion  to convert from a federally  chartered  mutual  savings and loan
    association  to a  federally  chartered  stock  savings  bank to be known as
    Mid-Continent  Federal  Savings  Bank (the  "Savings  Bank") and to form Mid
    Continent Bancshares, Inc., (the "Company"), a Kansas corporation, to act as
    the holding company of the Savings Bank. At the date of conversion, June 27,
    1994,  the Company  completed the sale of 2,248,250  shares of common stock,
    $.10 par value,  through concurrent  Subscription and Community Offerings at
    $10.00 per share. Included in the total shares sold are 136,000 shares which
    were purchased by the Employees  Stock Ownership Plan ("ESOP") at $10.00 per
    share.  Net  proceeds  from the  conversion,  after  recognizing  conversion
    expenses and underwriting costs of $754 were $21,729. From the net proceeds,
    the Company used $11,241 to purchase all of the capital stock of the Savings
    Bank and $1,360 to fund the purchase of 136,000  shares of the Company stock
    by the ESOP. The Company owns 100% of the Savings Bank's common stock.

    At the time of  conversion,  the  Savings  Bank  segregated  and  restricted
    $13,434 of retained earnings, which was the amount of its regulatory capital
    as of  December  31,  1993,  in a  liquidation  account  for the  benefit of
    eligible  account holders who continue to maintain their deposit accounts in
    the Savings Bank after conversion. In the event of a complete liquidation of
    the  Savings  Bank  (and only in such an  event),  eligible  depositors  who
    continue to maintain  accounts  shall be entitled to received a distribution
    from the  liquidation  account  in an amount  proportionate  to the  current
    adjusted  balances of all  qualifying  deposits then held.  The  liquidation
    account will be reduced annually to the extent that eligible account holders
    have reduced their qualifying deposits.

    Subsequent  to the  conversion,  the  Company  or the  Savings  Bank may not
    declare or pay a cash  dividend on any of its shares of common  stock if the
    effect would reduce  stockholders'  equity below either the amount  required
    for the liquidation  account  discussed  above or the applicable  regulatory
    capital  requirements  or if such  declaration  and payment would  otherwise
    violate regulatory requirements.

2.  ACCOUNTING POLICIES AND PROCEDURES

    Principles of Consolidation - The consolidated  financial statements include
    the accounts of the Company, and its wholly owned subsidiary,  Mid-Continent
    Federal  Savings Bank.  The Savings Bank grants  mortgage and consumer loans
    primarily  to customers  within the state of Kansas.  The Savings Bank has a
    wholly  owned  subsidiary,  Laredo  Investment,  Inc.,  that is  engaged  in
    promoting  the  sale  of  tax  deferred   annuities  and  receives   related
    commissions.  Significant  intercompany  accounts and transactions have been
    eliminated.

                                      -33-

<PAGE>


    Cash and Cash Equivalents - Cash and cash equivalents  include cash on hand,
    amounts  due from  depository  institutions,  treasury  bills  and  interest
    bearing deposits in other banks purchased with an original maturity of three
    months or less.

    The Savings Bank is required by regulation to maintain  liquid assets in the
    form of cash and securities  approved by federal  regulations,  at a monthly
    average of not less than 5% of customer deposits and short-term borrowings.

    Investment  Securities - Investment  securities  include  securities  of the
    United  States  Government  and its  agencies  and are recorded at amortized
    cost.  Related  premiums and discounts are accreted or amortized into income
    over the lives of the securities  using the level-yield  method.  Securities
    are not adjusted to the lower of amortized cost or market because management
    has both the ability and intent to hold these securities to maturity.

    Capital Stock of Federal Home Loan Bank - Capital stock of Federal Home Loan
    Bank is carried at cost.  Dividends  received on such stock are reflected as
    interest income on investment  securities in the consolidated  statements of
    income.

    Mortgage-Related  Securities -  Mortgage-related  securities are recorded at
    amortized cost. The related premiums and discounts are accreted or amortized
    over the estimated lives of the underlying  securities using the level-yield
    method.  These securities are not adjusted to the lower of amortized cost or
    market  because  management  has both the  ability  and intent to hold these
    securities to maturity.

    Loans Held for Sale - The Savings Bank's management designates certain loans
    receivable  at the  date of  origination  or  purchase  as held  for sale as
    management does not intend to hold such loans to maturity. Accordingly, such
    loans are carried at the lower of cost (outstanding  principal  adjusted for
    net  unearned  fees and costs) or market value  (determined  on an aggregate
    basis with consideration given to forward delivery commitments).  Such loans
    are  originated or purchased  and intended for sale in the secondary  market
    and are generally sold with servicing retained by the Savings Bank. Gains or
    losses on such sales are  recognized  utilizing the specific  identification
    method for financial  reporting and income tax purposes at the time of sale.
    Loan fees, net discounts, premiums and other related costs are recognized at
    the time the related loans are sold to  third-party  investors.  Interest on
    these loans is included in interest income on loans receivable.

    Loans Receivable - Loans are stated at the amount of unpaid principal less a
    provision for loan losses, undisbursed loan funds and unearned discounts and
    loan fees, net of certain direct loan origination  costs.  Interest on loans
    is  credited  to income as earned and  accrued  only if deemed  collectible.
    Loans are placed on nonaccrual  status when,  in the opinion of  management,
    the full timely  collection  of  principal  or  interest  is in doubt.  As a
    general  rule,  the accrual of interest is  discontinued  when  principal or
    interest payments become 90 days past due or earlier if conditions  warrant.
    When a loan is placed on nonaccrual  status,  previously  accrued but unpaid
    interest is reversed against current income.  Subsequent collections of cash
    may be applied as reductions to the principal  balance,  interest in arrears
    or recorded as income,  depending on management's assessment of the ultimate
    collectibility  of the loan.  Nonaccrual  loans may be  restored  to accrual
    status when  principal  and  interest  become  current  and full  payment of
    principal and interest is expected.

    Net loan origination and commitment fees are amortized as a yield adjustment
    to interest income using the level-yield  method over the contractual  lives
    of the related loans.

                                      -34-

<PAGE>


    Provision for Loan Losses - The Savings Bank considers a loan to be impaired
    when  management  believes it is probable  that it will be unable to collect
    all  principal and interest due  according to the  contractual  terms of the
    loan.  If a loan is impaired,  the Savings Bank is required to record a loss
    valuation  allowance equal to the present value of the estimated future cash
    flows  discounted  at the  loan's  effective  rate or  based  on the  loan's
    observable  market price or the fair value of the  collateral if the loan is
    collateral dependent.  These estimates are susceptible to changes that could
    result in a material  adjustment  to  operations.  Recovery of the  carrying
    value of such loans is dependent to a great extent upon economic,  operating
    and other conditions that may be beyond the Savings Bank's control.

    Premises  and  Equipment - Premises  and  equipment  are stated at cost less
    accumulated depreciation and amortization. Depreciation and amortization are
    computed  primarily on the  straight-line  method over the estimated  useful
    lives of the related assets. The following represents a summary of estimated
    useful lives:

                                                              Years

Building and improvements                                       40
Furniture, fixtures and equipment                             5-10
Automobiles                                                      3


    Real Estate Owned - Real estate owned represents  foreclosed assets held for
    sale and is recorded at fair value as of the date of foreclosure or transfer
    less estimated disposal costs (the new basis) and is subsequently carried at
    the lower of the new basis or fair value on the  current  measurement  date.
    Subsequently,  properties  are evaluated and any  additional  declines which
    reduce  the fair value to less than  carrying  value are  provided  for as a
    provision  for losses on real estate  owned.  Costs and expenses  related to
    major  additions and  improvements  are  capitalized  while  maintenance and
    repairs  which do not improve or extend the lives of the assets are expensed
    currently. Gains on the sale of real estate owned for which the Savings Bank
    grants a loan are recognized upon  disposition of the property to the extent
    allowable considering certain down payments and other requirements.

    Excess of Cost Over Fair Value of Assets Acquired - Excess of cost over fair
    value of assets  acquired is amortized  using a level-yield  method over the
    estimated remaining life of the long-term  interest-bearing assets acquired.
    Level-yield amortization is determined based upon the carrying amount of the
    long-term  interest-bearing assets acquired. The estimated remaining life of
    the  excess of cost over fair  value of assets  acquired  is two years as of
    September 30, 1996.

     Mortgage  Servicing  Rights -  Mortgage  servicing  rights  consist  of the
     following:

       Originated Mortgage Servicing Rights - The Savings Bank adopted Statement
       of  Financial  Accounting  Standards  ("SFAS")  No. 122,  Accounting  for
       Mortgage  Servicing  Rights,  effective for the year ended  September 30,
       1995.  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 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 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.

                                      -35-

<PAGE>


       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 adopted 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 of  origination  and stated  interest
       rate.  If  the  fair  value  estimated,  using  a  discounted  cash  flow
       methodology,  is less  than the  carrying  amount of 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 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, 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.

    Income  Taxes - The  Company,  the Savings  Bank and its  subsidiary  file a
    consolidated  Federal  income  tax  return.  State  income tax  returns  are
    individually filed for each of the entities.

    On October 1, 1993, the Company  changed its method of accounting for income
    taxes to conform to the requirements of SFAS No. 109,  Accounting for Income
    Taxes,  which  specifies  the asset and liability  method of accounting  for
    income taxes. Under the asset and liability method,  deferred tax assets and
    liabilities  are  established  for the  temporary  differences  between  the
    financial  accounting  basis  and tax  basis  of the  Company's  assets  and
    liabilities  at the current  statutory tax rates.  A valuation  allowance is
    established for deferred tax assets when their realization is in doubt based
    on a "more likely than not" analysis. The cumulative effect of the change in
    accounting  for income taxes was to increase net income by $136 for the year
    ended September 30, 1994. The Company  reflected this  cumulative  effect in
    operations during the year ended September 30, 1994.

    The Savings Bank is permitted  under the Internal  Revenue Code to deduct an
    annual  addition to a reserve for bad debts in determining  taxable  income,
    subject to certain  limitations.  This  addition  differs  from the bad debt
    experience used for financial accounting  purposes.  Bad debt deductions for
    income tax purposes  are  included in taxable  income of later years only if
    the bad debt reserve is used  subsequently for purposes other than to absorb
    bad debt losses.  Under SFAS No. 109, a deferred  tax  liability is provided
    only to the extent the tax bad debt reserve  exceeds the base year  reserve.
    The base year reserve is the tax bad debt reserve as of September  30, 1988.
    Retained  earnings as of 

                                      -36-

<PAGE>



    September 30, 1996 includes approximately $2,071 representing  such bad debt
    reserve as of the base year for which no  deferred  income  taxes have  been
    provided.

    On August 20,  1996,  the Small  Business  Job  Protection  Act of 1996 (the
    "Act") was enacted  into  legislation.  The Act repeals the special bad debt
    reserve  method  for  thrift  institutions.  The  Act  requires  thrifts  to
    recapture  any reserves  accumulated  after 1987 but forgives  taxes owed on
    reserves  accumulated prior to 1988.  Thrift  institutions will be given six
    years to account for the  recaptured  excess  reserves,  beginning  with the
    first taxable year after 1995,  and will be permitted to delay the timing of
    this  recapture  for one or two years  subject to whether  they meet certain
    residential  loan  tests.  The Act will not have a  material  impact  on the
    Company's financial statements as a deferred tax liability has been provided
    on the excess reserves.

    Revenue  Recognition - Servicing fees, interest income, late fees, and other
    ancillary  income  related to the Savings  Bank's  servicing  activities are
    accrued as earned.

    Earnings Per Share - The Company  completed  its initial  stock  offering on
    June 27, 1994, and, accordingly, earnings per share for 1994 was computed on
    net income and the weighted  average number of common and common  equivalent
    shares  outstanding  subsequent to June 27, 1994.  Common  equivalent shares
    include  shares  usable  upon  exercise  of  dilutive  options   outstanding
    determined  under the treasury  stock method.  The Company  accounts for the
    shares  acquired by its ESOP in  accordance  with the American  Institute of
    Certified  Public  Accountants'  (AICPA)  Statement of Position 93-6 and the
    shares  acquired  for its  Management  Stock  Bonus Plan  (MSBP) in a manner
    similar to the ESOP  shares;  shares  acquired  by the ESOP and MSBP are not
    considered in the weighted average shares  outstanding  until the shares are
    committed for allocation or vested to an employee's  individual account. The
    weighted average number of common and common equivalent  shares  outstanding
    for the periods indicated below are:

          June 27, 1994 through September 30, 1994       2,114,894 shares
          October 1, 1994 through September 30, 1995     2,087,668 shares
          October 1, 1995 through September 30, 1996     1,962,849 shares

    Regulatory  Compliance - Under the Financial  Institutions Reform,  Recovery
    and Enforcement  Act of 1989  ("FIRREA"),  the Office of Thrift  Supervision
    ("OTS") established capital  regulations  requiring savings  associations to
    maintain:  (i) core capital  equal to 3.0% of adjusted  total  assets,  (ii)
    tangible capital equal to 1.5% of adjusted total assets and (iii) risk-based
    capital equal to 8.0% of risk-weighted assets.

    The  Savings  Bank  meets  all of the  minimum  capital  requirements  as of
    September  30, 1996.  The Savings  Bank's  capital  amounts and ratios as of
    September 30, 1996 are as follows:

<TABLE>
<CAPTION>

                                         Required               Actual                   Excess
                                    ------------------    -------------------      -------------------
                                    Amount      Ratio      Amount       Ratio      Amount       Ratio
  
Core capital to adjusted
<S>                              <C>             <C>     <C>             <C>     <C>            <C>  
  total assets                   $   10,244      3.0 %   $ 31,827        9.3 %   $ 21,583       6.3 %
Tangible capital to
  adjusted total assets               5,122      1.5 %     31,827        9.3 %     26,705       7.8 %
Total capital to risk-
  weighted assets                    10,551      8.0 %     32,281       24.5 %     21,730      16.5 %

</TABLE>

                                      -37-

<PAGE>



    A reconciliation of the Savings Bank's  stockholders' equity under generally
    accepted accounting principles to regulatory capital amounts as of September
    30, 1996 is as follows:
<TABLE>
<CAPTION>

<S>                                                                                    <C>    
Stockholders' equity, core and tangible capital - as reported by the Savings Bank      $31,827
General loan loss reserves                                                                 454
                                                                                       -------
                                                                                     
Risk-based capital                                                                     $32,281
                                                                                       =======
</TABLE>

    The ability to include supervisory goodwill for purposes of the core capital
    requirement was phased out on January 1, 1995.

    The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
    required each federal banking agency to implement prompt corrective  actions
    for institutions  that it regulates.  In response to this  requirement,  OTS
    adopted  final rules,  based upon  FDICIA's  five capital  tiers.  The rules
    provide that a savings bank is "well  capitalized"  if its total  risk-based
    capital ratio is 10% or greater,  its Tier 1 risk-based  capital ratio is 6%
    or greater, its leverage is 5% or greater and the institution is not subject
    to a capital directive. Under this regulation, the Savings Bank is deemed to
    be "well capitalized" as of September 30, 1996.

    Estimates - The preparation of these financial statements in conformity with
    generally  accepted  accounting   principles  requires  management  to  make
    estimates  and  assumptions  that affect the reported  amounts of assets and
    liabilities  and  disclosure  of  contingent  assets and  liabilities  as of
    September 30, 1994,  1995 and 1996 and the reported  amounts of revenues and
    expenses during the years then ended. Significant estimates include the loan
    loss reserve and fair value of financial  instruments.  Actual results could
    differ from those estimates.

    New  Statements  of  Financial  Accounting  Standards - In March 1995,  FASB
    issued SFAS No. 121,  Accounting for the Impairment of Long-Lived Assets and
    for Long-Lived Assets to be Disposed Of, which will become effective for the
    Company  beginning  October 1, 1996. This Statement  establishes  accounting
    standards  for the  impairment of long-lived  assets,  certain  identifiable
    intangibles and goodwill related to those assets to be held and used and for
    long-lived  assets and certain  identifiable  intangibles to be disposed of.
    The  Statement  requires  that  long-lived  assets and certain  identifiable
    intangibles  to be held and used by an entity  be  reviewed  for  impairment
    whenever  events or  changes in  circumstances  indicate  that the  carrying
    amount of an asset may not be  recoverable.  In  performing  the  review for
    recoverability, the entity should estimate the future cash flows expected to
    result from the use of the asset and its eventual disposition. If the sum of
    the  undiscounted  cash flows is less than the carrying amount of the asset,
    an impairment  loss is recognized to reduce the carrying  amount to the fair
    value of the asset.  Generally,  long-lived assets and certain  identifiable
    intangibles  that are to be  disposed  of should be reported at the lower of
    the carrying  amount or fair value less costs to sell.  The Company does not
    anticipate  that the  implementation  of this Statement will have a material
    impact on the consolidated financial statements.

    In October 1995, the FASB issued SFAS No. 123,  Accounting  for  Stock-Based
    Compensation,  which will become effective for the Company beginning October
    1, 1996.  SFAS No. 123 will require  increased  disclosure  of  compensation
    expense arising from both fixed and performance  stock  compensation  plans.
    Such  expense will be measured as the fair value of the award at the date it
    is  granted  using an  option-pricing  model that  takes  into  account  the
    exercise price and expected volatility,  expected dividends on the stock and
    the expected  risk-free  rate of return  during the term of the option.  The
    compensation  cost would be recognized over the service period,  usually the
    period from the grant 

                                      -38-
<PAGE>

     date to the vesting date.  SFAS No. 123  encourages,  rather than requires,
     companies to adopt a new method that accounts for stock compensation awards
     based on their estimated fair value at the date they are granted. Companies
     would be  permitted,  however,  to  continue  accounting  under  Accounting
     Principles Board ("APB") Opinion No. 25. The Company will continue to apply
     APB Opinion No. 25 in their  financial  statements  and will be required to
     disclose  pro forma  net  income  and  earnings  per  share in a  footnote,
     determined as if the Company had applied the new method.

    In June 1996,  the FASB issued SFAS No. 125,  Accounting  for  Transfers and
    Servicing of Financial Assets and Extinquishments of Liabilities, which will
    become  effective  for the Company for  transfers and servicing of financial
    assets and extinguishments of liabilities occurring after December 31, 1996.
    This Statement  supersedes SFAS No. 122,  Accounting for Mortgage  Servicing
    Rights.  For each  servicing  contract in existence  before January 1, 1997,
    previously  recognized  servicing rights and "excess servicing"  receivables
    shall be combined,  net of any previously  recognized servicing  obligations
    under that  contract,  as a  servicing  asset or  liability.  The  Statement
    provides that servicing  assets and other retained  interests in transferred
    assets be measured by allocating  the previous  carrying  amount between the
    assets sold, if any, and retained interests, if any, based on their relative
    fair  values  at  the  date  of  the  transfer,  and  servicing  assets  and
    liabilities be  subsequently  measured by (1)  amortization in proportion to
    and over the  period of  estimated  net  servicing  income or loss,  and (2)
    assessment for asset impairment or increased  obligation based on their fair
    values.  The Company does not  anticipate  that the  implementation  of this
    Statement  will  have  a  material  impact  on  the  consolidated  financial
    statements.

    Reclassifications - Certain reclassifications have been made to the 1994 and
    1995  consolidated  financial  statements  in order to conform with the 1996
    presentation.

3.  INVESTMENT SECURITIES
<TABLE>
<CAPTION>

                                                                   September 30, 1995
                                                    ------------------------------------------------
                                                                   Gross       Gross      Estimated
                                                    Amortized     Unrealized Unrealized    Market
                                                       Cost        Gains      Losses        Value
                                                       ----        -----      ------        -----
<S>                                                    <C>          <C>          <C>        <C>     
United States Treasury and other U.S.
  Government agencies:
  Securities maturing after one year
    through five years                                 $ 18,153     $   82       $ 603      $ 17,632
  Securities maturing after five years
    through ten years                                    26,000        178           1       26,177
  Securities maturing after ten years                    10,090         79                   10,169  
                                                       --------      -----       -----      --------  
                                                       $ 54,243      $ 339       $ 604      $ 53,978  
                                                       ========      =====       =====      ========  
</TABLE>

                                      -39-

<PAGE>
<TABLE>
<CAPTION>
                                                               September 30, 1996                    
                                                   -------------------------------------------------

                                                                  Gross       Gross       Estimated
                                                   Amortized    Unrealized  Unrealized     Market
                                                     Cost         Gains       Losses        Value
                                                     ----         -----       ------        -----
                                                                                                     
United States Treasury and other U.S.                                                                
  Government agencies:                                                                               
<S>                                                 <C>             <C>       <C>          <C>      
  Securities maturing within one year               $   2,000                 $      25    $   1,975
  Securities maturing after one year                                                                 
    through five years                                 13,332                       606       12,726 
  Securities maturing after five years                                                               
    through ten years                                  17,500       $  16           441       17,075 
  Securities maturing after ten years                  53,403         111        1,463        52,051 
                                                     --------       -----      -------      -------- 
                                                                                                   
                                                     $ 86,235       $ 127      $ 2,535      $ 83,827 
                                                     ========       =====      =======      ======== 
</TABLE>
                                                             
    As of  September  30,  1995 and  1996,  the  Savings  Bank  held  "step  up"
    securities   with   aggregate   carrying   values  of  $2,000  and   $1,000,
    respectively.  The  securities  bear interest at rates ranging from 5.05% to
    8.04% with stated  maturity  dates ranging from 1996 to 2004. The securities
    are  callable  on  specified  "step up"  dates.  At each call  date,  if the
    securities are not called, the coupon rate increases.

    As of September 30, 1996, the Savings Bank held callable  securities with an
    aggregate  carrying value of $76,801.  The securities bear interest at rates
    ranging from 4.98% to 8.5% with stated  maturity  dates ranging from 1996 to
    2011.

4.  MORTGAGE-RELATED SECURITIES
<TABLE>
<CAPTION>
                                                                           September 30, 1995
                                                          ------------------------------------------------------

                                                                          Gross        Gross       Estimated
                                                          Amortized      Unrealized   Unrealized     Market
                                                            Cost          Gains       Losses         Value
                                                            ----          -----       ------         -----
                                                                                                   
Pass-through certificates - fixed rate:
<S>                                                         <C>              <C>         <C>         <C>      
  Government National Mortgage Association                  $   7,293        $ 339                   $   7,632
  Federal National Mortgage Association                           459           19                         478
  Federal Home Loan Mortgage Corporation                       13,835          153       $  48          13,940
Pass-through certificates - adjustable rate:
  Government National Mortgage Association                      5,729                       35           5,694
  Federal National Mortgage Association                         2,990                       41           2,949
  Federal Home Loan Mortgage Corporation                        6,786                       49           6,737
  Mortgage Guarantee Insurance Corporation                      2,912            7           7           2,912  
                                                             --------        -----       -----        --------  

                                                             $ 40,004        $ 518       $ 180        $ 40,342  
                                                             ========        =====       =====        ========  
</TABLE>

                                      -40-
<PAGE>
<TABLE>
<CAPTION>
                                                                          September 30, 1996
                                                          ------------------------------------------------------

                                                                          Gross        Gross       Estimated
                                                          Amortized      Unrealized   Unrealized     Market
                                                            Cost          Gains       Losses         Value
                                                            ----          -----       ------         -----
                                                                                                   
Pass-through certificates - fixed rate:
<S>                                                         <C>              <C>         <C>         <C>      
  Government National Mortgage Association                  $   6,151        $ 224                   $   6,375
  Federal National Mortgage Association                           365           12                         377
  Federal Home Loan Mortgage Corporation                       11,853          138       $ 176          11,815
Pass-through certificates - adjustable rate:
  Government National Mortgage Association                      5,043                       24           5,019
  Federal National Mortgage Association                         2,616                       70           2,546
  Federal Home Loan Mortgage Corporation                        6,219                      119           6,100
  Mortgage Guarantee Insurance Corporation                      2,136            3           5           2,134  
                                                             --------        -----       -----        --------  

                                                             $ 34,383        $ 377       $ 394        $ 34,366  
                                                             ========        =====       =====        ========  

</TABLE>

    Certain  mortgage-related  securities  have been pledged as  collateral  for
deposits (See Note 11).

5.  LOANS RECEIVABLE
<TABLE>
<CAPTION>

                                                          1995            1996
                                                          ----            ----

First mortgage loans:
<S>                                                      <C>            <C>     
  Residential - one-to-four units ................       $115,803       $157,494
  Secured by other properties ....................          1,280          1,013
  Construction loans .............................         10,351         17,367
                                                         --------       --------
           Total first mortgage loans ............        127,434        175,874
                                                         --------       --------

Other installment loans:
  Property improvements, auto and other ..........          3,915          5,195
  Mobile home ....................................            499            305
  Deposits .......................................            688            769
                                                         --------       --------
           Total installment loans ...............          5,102          6,269
                                                         --------       --------
           Total loans ...........................        132,536        182,143

Less:
  Unearned discounts and loan fees ...............            693            157
  Undisbursed loan funds .........................          6,624         10,407
  Allowance for loan losses ......................            423            421
                                                         --------       --------

                                                         $124,796       $171,158
                                                         ========       ========
</TABLE>
                                      -41-
<PAGE>

    There  were no  commercial  real  estate  or  business  loans  purchased  or
originated during 1994, 1995 or 1996.

    The Savings Bank  originates  and purchases  both  adjustable and fixed rate
    loans. The approximate composition of these loans is as follows:
<TABLE>
<CAPTION>

                                             September 30, 1995
----------------------------------------------------------------------------------------------------------------
            Fixed Rate                                                                Adjustable Rate
------------------------------------                                         -----------------------------------
       Term to                                                                  Term to Rate
      Maturity         Book Value                                                Adjustment        Book Value
      --------         ----------                                                ----------        ----------

<S>                     <C>                                               <C>                    <C>         
1 mo. - 1  yr.          $    11,138                                        1 mo. - 1 yr.          $    23,982 
1 yr. - 3 yrs.                1,766                                        1 yr. - 3 yrs.              53,675 
3 yrs. - 5 yrs.               1,815                                       3 yrs. - 5 yrs.               2,821
5 yrs. - 10 yrs.              5,020                                        5 yrs - 10 yrs.              1,376
10 yrs. - 20 yrs.            19,640
Over 20 years                11,303                                                               -----------                   
                        -----------                                                  
                                                                          
                        $    50,682                                                               $    81,854  
                        ===========                                                               ===========  
</TABLE>

<TABLE>
<CAPTION>

                                                September 30, 1996
----------------------------------------------------------------------------------------------------------------------
            Fixed Rate                                                               Adjustable Rate
------------------------------------                                       -------------------------------------
       Term to                                                                 Term to Rate
      Maturity         Book Value                                               Adjustment        Book Value
      --------         ----------                                               ----------        ----------

<S>                     <C>                                                <C>                     <C>         
1 mo. - 1  yr.          $    18,246                                        1 mo. - 1 yr.           $     50,379
1 yr. - 3 yrs.                2,009                                        1 yr. - 3 yrs.                48,341
3 yrs. - 5 yrs.               2,219                                        3 yrs. - 5 yrs.                9,419
5 yrs. - 10 yrs.              5,422                                        5 yrs - 10 yrs.                1,170
10 yrs. - 20 yrs.            28,615                                                             
Over 20 years                16,323                                                                                   
                        -----------                                                                ------------  

                        $    72,834                                                                $    109,309  
                        ===========                                                                ============  

</TABLE>

    The adjustable rate loans have interest rate adjustment  limitations and are
    generally  indexed to the weekly  average  yield on United  States  Treasury
    securities adjusted to a constant maturity of 1 year.

    The Savings Bank is subject to numerous lending-related  regulations.  Under
    FIRREA,  the Savings  Bank may not make real estate loans to one borrower in
    excess of the greater of 15% of its unimpaired  capital and surplus or $500,
    whichever  is greater.  As of  September  30,  1996,  the Savings Bank is in
    compliance with this limitation.

                                      -42-
<PAGE>

    A summary of the activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>

                                                     1994      1995       1996
                                                     ----      ----       ----

<S>                                                 <C>        <C>        <C>  
Balance, beginning of year ....................     $ 346      $ 275      $ 423

  Provision charged to expense ................         6        224         75
  Losses charged against the allowance ........       (80)       (80)       (90)
  Recoveries ..................................         3          4         13
                                                    -----      -----      -----

Balance, end of year ..........................     $ 275      $ 423      $ 421
                                                    =====      =====      =====
</TABLE>

    During 1995,  the Savings Bank  restructured  loans with a carrying value of
    approximately  $3,039. No provision for loss was considered  necessary based
    on the restructured terms and the cash flows expected to be generated by the
    underlying collateral.  The Savings Bank did not engage in any troubled debt
    restructurings during the years ended September 30, 1994, 1995 and 1996.

    Aggregate  loans to  executive  officers,  directors  and their  associates,
    including  companies in which they have partial  ownership  interest did not
    exceed  5% of  stockholders'  equity  as of  September  30,  1995 and  1996.
    Management  believes  such  loans  were  made  under  terms  and  conditions
    substantially  the same as loans made to  parties  not  affiliated  with the
    Savings Bank.

    As of September 30, 1995 and 1996,  loans  totaling  approximately  $392 and
    $484,  respectively,  were on nonaccrual status. Gross interest income would
    have been increased by $31 and $45 for the year ended September 30, 1995 and
    1996, respectively, for nonaccrual status loans.

6.  MORTGAGE LOANS SERVICED

    The Savings Bank  services  primarily  single family  residential  loans for
    others  which are not  included  in the  accompanying  consolidated  balance
    sheets.  The  approximate  unpaid  principal  balances  of these  loans  are
    summarized as follows:
<TABLE>
<CAPTION>
                                                         1994         1995        1996
                                                         ----         ----        ----
Government National
<S>                                                   <C>        <C>         <C>       
  Mortgage Association ............................   $ 501,781  $  902,977  $  875,381
Federal National
  Mortgage Association ............................     228,889     132,209     115,492
Federal Home
  Loan Mortgage Corporation .......................     133,227     146,624     231,515
Other investors ...................................      44,215       8,082       6,765
                                                      ---------  ----------  ----------

                                                      $ 908,112  $1,189,892  $1,229,153
                                                      =========  ==========  ==========
</TABLE>

    The  Savings  Bank  services  loans in 45  states.  The five  largest  state
    concentrations,  based on unpaid principal balances, are as follows:  Kansas
    (48.8%),  Oklahoma (22.2%),  Louisiana (9.8%), Michigan (9.9%), and Illinois
    (4.5%),  aggregating approximately 95.2% of the portfolio. The risk inherent
    in such  concentrations  is  dependent  not only upon  regional  and general
    economic  stability which affects  property  values,  but also the financial
    well-being and creditworthiness of the borrower.

                                      -43-

<PAGE>

    Mortgage loans and their related  servicing rights are sold under agreements
    that define  certain  criteria for the mortgage loan. If the criteria is not
    met,  the Savings  Bank may be required to  repurchase  the  mortgage  loan.
    Conforming  conventional  loans serviced by the Savings Bank are securitized
    through FNMA or FHLMC programs on a non-recourse basis,  whereby foreclosure
    losses are generally the responsibility of FNMA or FHLMC and not the Savings
    Bank.  Similarly,  the  government  loans  serviced by the Savings  Bank are
    securitized  through  GNMA  programs,  whereby the  Savings  Bank is insured
    against  loss by the Federal  Housing  Administration  ("FHA") or  partially
    guaranteed against loss by the Veterans  Administration ("VA"). With respect
    to sales of loans, under certain circumstances,  the Savings Bank may become
    liable for the unpaid  principal  and interest on  defaulted  loans or other
    loans if there has been a breach of  representations  or warranties.  In the
    opinion of management,  adequate  reserves have been  established for losses
    that may be incurred as a result of repurchased mortgage loans.

    The servicing of loans for others generally consists of collecting  mortgage
    payments,  maintaining escrow accounts, disbursing payments to investors and
    foreclosure  processing.  Loan servicing income includes servicing fees from
    investors and certain charges collected from borrowers, such as late payment
    fees.  The Savings Bank held  borrowers'  escrow  balances and principal and
    interest  payments related to loans serviced for others of $17,220,  $19,169
    and $16,917 as of September  30, 1994,  1995 and 1996,  respectively.  These
    balances  are  segregated  in special  bank  accounts  which are included in
    deposits in the accompanying consolidated balance sheets.

    In connection with its fiduciary responsibilities, the Savings Bank advances
    funds relative to the foreclosure of serviced  loans,  which are repaid from
    sale  proceeds by way of  reimbursement  from  investors  or through  claims
    submitted to private mortgage  insurance  companies,  the FHA and/or the VA.
    These advances  totaled $1,880 and $1,995 as of September 30, 1995 and 1996,
    respectively,   and  are  included  in  other  assets  in  the  accompanying
    consolidated balance sheets.

7.  LOANS HELD FOR SALE

                                         1995          1996
                                         ----          ----

Loans held for sale                    $ 22,219    $ 13,787
Deferred net discounts, premiums and
  other related costs                      (111)        (69)
                                       --------    --------

Loans held for sale, net               $ 22,108    $ 13,718
                                       ========    ========

    A summary of gross  realized  gains (losses) on sales of loans held for sale
is as follows:

                                1994       1995        1996
                                ----       ----        ----

Gross realized gains          $ 1,599    $   794    $ 1,651
Gross realized losses            (703)       (88)      (284)
                              -------    -------    -------

Gains on sale of loans, net   $   896    $   706    $ 1,367
                              =======    =======    =======


                                      -44-

<PAGE>



8.  PREMISES AND EQUIPMENT

                                      1995       1996

Land                                $ 1,718    $ 2,099
Building and improvements             3,642      4,555
Furniture, fixtures and equipment     2,547      2,980
Automobiles                              42         38
                                    -------    -------
                                      7,949      9,672
Less accumulated depreciation        (3,192)    (3,401)

                                    -------    -------
                                    $ 4,757    $ 6,271
                                    =======    =======


9.  REAL ESTATE OWNED

                                                 1995     1996
 
Real estate owned (acquired by foreclosure or
  by deed in lieu of foreclosure)               $ 238    $  62
Less allowance for losses                         (51)     (34)
                                                -----    -----

                                                $ 187    $  28
                                                =====    =====

    A summary of the activity in the  allowance  for losses on real estate owned
is as follows: 

                                         1994    1995    1996

Balance, beginning of year               $ 26    $ 16    $ 51

  Provision charged to expense             59      81      18
  Losses charged against the allowance    (77)    (47)    (35)
  Recoveries                                8       1
                                         ----    ----    ----

Balance, end of year                     $ 16    $ 51    $ 34
                                         ====    ====    ====


                                      -45-
<PAGE>

10. MORTGAGE SERVICING RIGHTS

    The following is an analysis of the changes in mortgage servicing rights:

                                           1994      1995      1996

Balance, beginning of year               $ 3,243   $ 6,312   $11,625

Additions:
  Purchased mortgage servicing rights      4,000     8,107     1,970
  Originated mortgage servicing rights                 322       589
                                         -------   -------   -------

                                           4,000     8,429     2,559

Reductions:
  Amortization                               899     1,305     1,651
  Bulk sales                                         1,805
  Servicing released sales                    32         6        37
                                         -------   -------   -------
                                             931     3,116     1,688
                                         -------   -------   -------

Balance, end of year                     $ 6,312   $11,625   $12,496
                                         =======   =======   =======

    During 1995, the Savings Bank sold (in bulk) the mortgage  servicing  rights
    to loans with a principal balance of approximately  $304,000  resulting in a
    gain of $1,961.

                                      -46-
<PAGE>

11. DEPOSITS
<TABLE>
<CAPTION>
                                                      1995                   1996
                                             ---------------------    --------------------
                                               Amount     Percent      Amount    Percent
<S>                                          <C>           <C>       <C>          <C>   

Passbook and checking accounts:
  Demand and NOW accounts, including
    noninterest bearing deposits of
    approximately $24,495 and
    $22,384 as of September 30,
    1995 and 1996 (rates, excluding
    noninterest bearing deposits, of 2.5% to
    2.6% as of September 30, 1995 and 1996)  $ 37,497       19.2 %   $ 36,785      17.1 %
  Money market accounts (rates of 3.00%
    and 2.65% as of September 30, 1995
    and 1996)                                   6,245        3.2       12,387       5.8
Passbook savings accounts (rate of 2.75%
  as of September 30, 1995 and 1996)            8,978        4.6        8,690       4.1  
                                             --------      -----     --------     ----- 
Total passbook and checking accounts           52,720       27.0       57,862       7.0  
                                             --------      -----     --------     ----- 

Certificate accounts:
  2.00% to   3.00%                                 22                      12
  3.01% to   4.00%                                  3
  4.01% to   5.00%                             14,629        7.4         6,13      42.9
  5.01% to   6.00%                             76,776       39.2      106,577      49.7
  6.01% to   7.00%                             50,010       25.6       43,526      20.3
  7.01% to   8.00%                                656        0.3          275       0.1
  8.01% to   9.00%                                900        0.5          107      
                                             --------      -----     --------     ----- 
Total certificate accounts                    142,996       73.0      156,631      73.0  
                                             --------      -----     --------     ----- 
                                             $195,716      100.0 %   $214,493     100.0%
                                             ========      =====     ========     ===== 


Weighted average interest rate on deposits
  during year                                               4.35 %                 4.63 %
                                                            ====                   ====  
</TABLE>


    The  aggregate  amount  of jumbo  certificates  of  deposit  with a  minimum
    denomination  of $100 as of  September  30,  1995 and 1996 was  $30,318  and
    $57,151, respectively.

    Certain  savings  deposits of public  institutions  were  collateralized  by
    investment and mortgage-related  securities with aggregate amortized cost of
    $35,965 and aggregate  market value of $36,113 as of September 30, 1995, and
    aggregate amortized cost of $41,371 and aggregate market value of $40,281 as
    of September 30, 1996.

                                      -47-
<PAGE>

    Certificate accounts mature as follows:

1997                                                 $97,575
1998                                                  42,703
1999                                                   7,227
2000                                                   1,462
2001                                                   1,873
Thereafter                                             5,791  
                                                     --------  

                                                     $156,631  
                                                     ========  

    A summary of interest expense by deposit type is as follows:
<TABLE>
<CAPTION>

                                                  1994         1995          1996

<S>                                            <C>          <C>           <C>    
Passbook savings deposits                      $   243      $   239       $   238
NOW accounts and money market
  demand deposits                                  604          565           756
Certificate accounts                             4,533        6,697         8,491 
                                               -------      -------       ------- 

                                               $ 5,380      $ 7,501       $ 9,485 
                                               =======      =======       ======= 
</TABLE>

12. INCOME TAXES

              1994      1995       1996

Current    $   848   $ 2,668    $ 1,363
Deferred       347      (225)       530
           -------   -------    -------

           $ 1,195   $ 2,443    $ 1,893
           =======   =======    =======


    Income tax expense has been provided at effective rates of 39.1%,  37.3% and
    37.7% for the years ended September 30, 1994,  1995 and 1996,  respectively.
    The  differences  between such  effective  rates and the  statutory  Federal
    income tax rate computed on income before income tax expense and  cumulative
    effect of change in accounting for income taxes result from the following:
<TABLE>
<CAPTION>

                                            1994                 1995                   1996       
                                      Amount     %        Amount        %        Amount       %     
                                                                               
<S>                                 <C>         <C>      <C>          <C>       <C>          <C>
Federal income tax expense                                                     
  computed at statutory rate        $ 1,040     34.0     $ 2,227      34.0      $ 1,706      34.0
Increases (decreases) in                                                       
  taxes resulting from:                                                        
  State income taxes                    112      3.7         304       4.6          181       3.6
  Amortization of cost over                                                    
    fair value of assets acquired        31      1.0          26       0.4           21       0.4
  Other                                  12      0.4        (114)     (1.7)         (15)     (0.3)
                                    -------     ----     -------      ----      -------      ----
                                                                               
                                    $ 1,195     39.1     $ 2,443      37.3      $ 1,893      37.7
                                    =======     ====     =======      ====      =======      ====
</TABLE>

                                      -48-
<PAGE>
                                                                           
    Deferred tax expense  results from timing  differences in the recognition of
    revenue and expense for tax and financial statement purposes. The sources of
    these differences and the tax effect of each were as follows:

                                              1994      1995    1996

Market adjustment on loans held for sale     $ 172    $(134)   $(125)
Bad debt reserves                              202        2      164
Depreciation                                    18       (7)      49
Deferred loan fees and costs                  (111)      12      402
Excess amortization of mortgage
  servicing rights                                      (72)     (28)
Outside Directors' Retirement Plan accrual              (52)      (1)
Management Stock Bonus Plan accrual                     (19)
Federal Home Loan Bank stock dividends                            66
Other                                           66       45        3
                                             -----    -----    -----
                                             $ 347    $(225)   $ 530
                                             =====    =====    =====


    The  components of net deferred tax assets and  liabilities  as of September
30, 1995 and 1996 are as follows:

                                                       1995     1996

Deferred tax assets:
  Deferred loan fees                                 $  164
  Excess amortization of mortgage servicing rights       72   $  100
  Outside Directors' Retirement Plan accrual             52       53
  Management Stock Bonus Plan accrual                    19       19
  Market adjustment on loans held for sale                        94
  Other                                                  39       44
                                                     ------   ------
                                                        346      310

Deferred tax liabilities:
  Federal Home Loan Bank stock dividends                330      396
  Market adjustment on loans held for sale               31
  Bad debt reserves                                      37      201
  Prepaid expenses                                       75       90
  Fixed assets                                           21       70
  Deferred loan fees                                             238
  Other                                                  20       13
                                                     ------   ------
                                                        514    1,008
                                                     ------   ------
Net deferred tax liabilities                         $  168   $  698
                                                     ======   ======

                                      -49-
<PAGE>

13. ADVANCES FROM FEDERAL HOME LOAN BANK
<TABLE>
<CAPTION>
                   1995                                                   1996
-------------------------------------------           -----------------------------------------
                               Weighted                                              Weighted
  Fiscal                       Average                  Fiscal                       Average
   Year                        Interest                  Year                        Interest
 Maturity          Amount      Rate                    Maturity         Amount         Rate

<S>           <C>                <C>                      <C>        <C>               <C>
   1996       $      18,000      6.24 %
   1997               7,000      6.80                     1997       $    63,200       5.98 %
   1998               5,000      7.19                     1998            18,500       6.43
   2000               3,000      7.67                                                  
              -------------                                          -----------             
              $      33,000      6.63 %                              $    81,700       6.08 %
              =============                                          ===========             
</TABLE>

    The advances are collateralized as of September 30, 1996 by a blanket pledge
    agreement, including all Capital Stock of Federal Home Loan Bank, qualifying
    first  mortgage  loans,  certain   mortgage-related   securities  and  other
    investment securities.

    The  Savings  Bank has  entered  into a  line-of-credit  agreement  with the
    Federal   Home  Loan  Bank  wherein  the  Savings  Bank  can  borrow  up  to
    approximately $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.

14. EMPLOYEE BENEFIT PLANS

    Profit-Sharing  Plan - The profit  sharing  plan  covers  substantially  all
    employees and is a savings plan under Section 401(k) of the Internal Revenue
    Code in which an employee's contributions may be matched by the Savings Bank
    up  to a  limit  based  upon  the  employee's  compensation.  Employees  may
    contribute up to a specified percentage of their annual compensation.  Prior
    to April 30, 1994,  the Savings Bank would match the employee  contributions
    in an amount equal to 1.5% of annual compensation for the first 3% of annual
    compensation  contributed  by the  employees.  The Savings  Bank's  matching
    contribution was  discontinued  effective April 30, 1994. The Savings Bank's
    matching  contributions  amounted  to $17 for the year ended  September  30,
    1994.

    Pension  Plan  - The  Savings  Bank  has a  noncontributory  defined-benefit
    pension plan covering  substantially  all employees  completing  one year of
    employment and 1,000 hours of service. Plan benefits are based upon years of
    service and  compensation.  The Savings Bank funding policy is, acting under
    the advice of the actuary for the plan,  that the  Savings  Bank  intends to
    make  contributions  to the trust in such  amounts and at such times as they
    are required to maintain the plan and trust for its  employees in compliance
    with ERISA and Section 412 of the Internal Revenue Code.

                                      -50-
<PAGE>

    The following table sets forth the funded status of the plan:
<TABLE>
<CAPTION>

                                                                        1995       1996
<S>                                                                   <C>        <C>    
Projected benefit obligation:
  Vested benefits                                                     $   909    $ 1,111
  Nonvested benefits                                                       53         49
                                                                      -------    -------
  Accumulated benefit obligation                                          962      1,160
  Effect of projected future compensation levels                          504        453
                                                                      -------    -------
Projected benefit obligation                                            1,466      1,613

Fair value of plan assets                                                 948      1,162
                                                                      -------    -------
Projected benefit obligation in excess of fair value of plan assets       518        451
Unrecognized net obligation existing at initial
  application of SFAS No. 87                                             (152)      (141)
Unrecognized net loss                                                    (156)       (52)
                                                                      -------    -------
Accrued pension cost                                                  $   210    $   258
                                                                      =======    =======

</TABLE>

    The assets of the plan consist  primarily of  certificates  of deposit which
    are included in the Savings Bank's deposits.

    Net periodic pension cost includes the following:

                                 1994     1995     1996

Service cost                    $ 144    $ 172    $ 181
Interest cost                      63       83      101
Actual return on assets           (55)     (63)     (87)
Net amortization and deferral      10        7       19
                                -----    -----    -----

Net periodic pension cost       $ 162    $ 199    $ 214
                                =====    =====    =====

    The weighted average discount rate used in determining the actuarial present
    value of the projected obligation was 7.0%, the expected rate of increase in
    future  salary  levels  for plan  beneficiaries  was  4.0% and the  expected
    long-term  rate of return on plan assets was 7.5% for each of the plan years
    ending September 30, 1994, 1995 and 1996.

    Employee  Stock  Ownership Plan - The Company has an ESOP for the benefit of
    Savings Bank employees who meet the eligibility  requirement  which includes
    having  completed  1,000 hours of service  within a 12 month period with the
    Company.  The ESOP  Trust  acquired  136,000  shares of common  stock in the
    Company's  initial  public  offering  with  proceeds  from a loan  from  the
    Company.  The  Savings  Bank  makes  cash  contributions  to the  ESOP  on a
    quarterly  basis  sufficient  to enable the ESOP to make the  required  loan
    payments to the Company.

                                      -51-
<PAGE>

    The note payable  referred to above bears interest at prime rate  adjustable
    quarterly with interest payable  quarterly and future  principal  payable in
    nine  installments  of  $136  beginning   December  31,  1995  and  annually
    thereafter and one  installment of $68 payable on June 26, 2004. The loan is
    secured by the shares of the stock purchased.

    As the debt is repaid,  shares are released from collateral and allocated to
    qualified  employees  based on the  proportion  of debt  service paid in the
    year. The Company  accounts for its ESOP in accordance  with AICPA Statement
    of Position 93-6. Accordingly, the shares pledged as collateral are reported
    as a reduction of stockholders' equity in the consolidated balance sheet. As
    shares are  released  from  collateral,  the  Company  reports  compensation
    expense  equal to the current  market  price of the  shares,  and the shares
    become  outstanding  for  earnings  per  share  computations.  Dividends  on
    allocated ESOP shares are recorded as a reduction of retained earnings.

    Compensation  expense  related  to the ESOP  was $48,  $172 and $246 for the
    years ended September 30, 1994, 1995 and 1996, respectively.  Following is a
    summary of shares held in the ESOP Trust as of September 30, 1996:


Allocated shares                                               19,938

Shares released for allocation or committed to be released     10,200

Unreleased shares                                             105,128
                                                             --------

Total ESOP shares                                             135,266
                                                              =======

Fair value of unreleased shares at September 30, 1996        $  1,997
                                                             ========


    Management  Stock Bonus Plan - The Savings Bank  adopted a Management  Stock
    Bonus Plan ("MSBP"), the objective of which is to enable the Savings Bank to
    retain   personnel   of   experience   and  ability  in  key   positions  of
    responsibility.  Employees  of the  Savings  Bank are  eligible  to  receive
    benefits under the MSBP at the sole  discretion of a committee  appointed by
    the Board of Directors of the Savings Bank.  The MSBP is managed by trustees
    who are non-employee directors of the Savings Bank.

    The MSBP  purchased  74,833  shares of the  Company's  stock for $995 during
    1995.  These shares were granted in the form of restricted stock payable 20%
    upon date of award (June 27,  1995) and the  remaining  equally  over a four
    year period beginning June 27, 1996.  Compensation  expense in the amount of
    the fair  market  value of the common  stock at the date of the grant to the
    employee  will be  recognized  over the period  during  which the shares are
    payable. A recipient of such restricted stock will be entitled to all voting
    and other  stockholder  rights  (including the right to receive dividends on
    vested and nonvested shares), except that the shares, while restricted,  may
    not be sold, pledged or otherwise disposed of and are required to be held in
    escrow.  If a holder of such  restricted  stock  terminates  employment  for
    reasons other than death,  disability or retirement,  the employee  forfeits
    all rights to the allocated shares under  restriction.  If the participant's
    service terminates as a result of death, disability,  retirement or a change
    in control  of the  Savings  Bank,  all  restrictions  expire and all shares
    allocated become unrestricted. The Board of Directors can terminate the MSBP
    at any time,  and if it does so, any shares not allocated will revert to the
    Company.

                                      -52-
<PAGE>

    Stock Option Plan - In connection with the stock  conversion,  the Company's
    Board of Directors  adopted the 1994 Stock Option Plan (the "Option  Plan").
    Pursuant to the Option Plan, 224,825 shares of common stock are reserved for
    issuance by the Company upon exercise of stock options  granted to officers,
    directors  and  employees  of the Company from time to time under the Option
    Plan. The purpose of the Option Plan is to provide  additional  incentive to
    certain officers, directors and key employees by facilitating their purchase
    of a stock  interest in the Company.  The Option Plan provides for a term of
    ten years,  after which no awards may be made, unless earlier  terminated by
    the Board of Directors pursuant to the Option Plan.

    The  Option  Plan will be  administered  by a  committee  of at least  three
    non-employee  directors  designated  by the Board of Directors  (the "Option
    Committee").  The Option Committee will select the employees to whom options
    are to be granted and the number of shares to be granted.  The option  price
    may not be less than 100% of the fair market value of the shares on the date
    of the grant, and no option shall be exercisable after the expiration of ten
    years from the grant date.  In the case of any  employee  who owns more than
    10% of the outstanding  common stock at the time the option is granted,  the
    option  price  may not be less  than  110% of the fair  market  value of the
    shares on the date of the  grant,  and the option  shall not be  exercisable
    after the  expiration of five years from the grant date.  The exercise price
    may be paid in cash, shares of the common stock, or a combination of both.

    The Option Committee  granted options for 165,476 shares of common stock, at
    an exercise price of $11.75 (market value at date of grant) per share during
    the year  ended  September  30,  1995.  All  such  options  are  exercisable
    immediately  (for  nonemployee  directors)  or  otherwise  at  the  rate  of
    one-third  following  one year  after the date of the  grant  and  one-third
    annually thereafter.  Accordingly,  options on 85,135 shares are exercisable
    at September 30, 1996.

15. OUTSIDE DIRECTORS' RETIREMENT PLAN

    The  Savings  Bank  has a  consultation  and  retirement  plan  for  outside
    directors  which  became  effective  January  1,  1995.  The  plan  provides
    retirement  benefits for outside  directors  after they have  completed  ten
    years of service  to the  Savings  Bank and  reached  age 65.  The  benefits
    include  $300 per month  payment for 120 months  beginning at age 75. In the
    event of death, disability or retirement of a director on or after age 65 or
    in the event of a change in control of the Company or the Savings Bank, such
    payments will commence to the director or their beneficiary as if age 75 was
    attained.  Expense related to the retirement plan is amortized  ratably over
    the  service  period  which is also the period  until full  vesting  occurs.
    Adoption of the retirement plan resulted in a charge to operations (included
    in salaries and employee benefits) during the year ended September 30, 1995.
    Total  expense  related  to this plan was $141 and $10 for the  years  ended
    September 30, 1995 and 1996, respectively. The plan is unfunded.

16. COMMITMENTS AND CONTINGENT LIABILITIES

    As of September  30, 1995,  the Savings  Bank had  commitments  to originate
    loans approximating  $36,933 of which approximately  $23,711 were fixed-rate
    (interest  rates ranging from 5.63% to 8.62%) and $13,222 were floating rate
    commitments.  As of September 30, 1996, the Savings Bank had  commitments to
    originate loans approximating  $63,743 of which  approximately  $39,491 were
    fixed-rate  (interest  rates  ranging  from 6.00% to 9.00%) and $24,252 were
    floating rate  commitments.  These  commitments  are agreements to lend to a
    customer as long as there is no violation of any  condition  established  in
    the contract.  Commitments  generally have fixed  expiration  dates or other
    termination  clauses  and  may  require  payment  of a fee.  Certain  of the
    commitments are expected to expire without

                                      -53-
<PAGE>

     being fully drawn upon; the total  commitments  amount disclosed above does
     not necessarily  represent  future cash  requirements due to normal fallout
     experience. The Savings Bank evaluates each customer's  creditworthiness on
     a  case-by-case  basis.  The amount of  collateral  obtained if  considered
     necessary  by the  Savings  Bank  upon  extension  of  credit  is  based on
     management's credit evaluation of the counterparty.

    As of  September  30,  1995 and 1996,  the  Savings  Bank has  approximately
    $35,950 and $28,345 of  commitments  to sell loans to third  parties,  which
    includes $23,600 and $28,345 of forward commitments to sell mortgage-related
    securities, respectively. It is management's intent to securitize loans held
    for sale to fill these commitments.  These instruments contain an element of
    risk in the event the counterparties may be unable to meet the terms of such
    agreements.  In the event the parties to delivery commitments were unable to
    fulfill  their  obligations,  the Savings Bank would be required to sell its
    product to other  parties and would be exposed to market  fluctuations.  The
    Savings Bank minimizes its risk exposure by limiting the  counterparties  to
    those that meet established credit and capital  guidelines.  Management does
    not expect any counterparty to default on their obligations and,  therefore,
    does not expect to incur any cost due to counterparty  default.  The Savings
    Bank does not require nor place collateral for any delivery commitments. Any
    unrealized  gain or loss on these  commitment  obligations are considered in
    conjunction with the Savings Bank's lower of cost or market valuation of its
    loans held for sale.

    The Savings Bank is  contingently  liable on loans sold with  recourse.  The
    principal  balance of these loans was $127 as of September  30, 1995.  There
    were no loans sold with recourse outstanding as of September 30, 1996.

17. FAIR VALUE OF FINANCIAL INSTRUMENTS

    Estimated  fair value  amounts  have been  determined  by the Company  using
    available  market  information  and a selection  from a variety of valuation
    methodologies.  However,  considerable  judgment is necessarily  required to
    interpret  market data to develop the estimates of fair value.  Accordingly,
    the  estimates  presented are not  necessarily  indicative of the amount the
    Company could  realize in a current  market  exchange.  The use of different
    market  assumptions and estimation  methodologies may have a material effect
    on the estimated fair value amounts.


                                      -54-
<PAGE>

    The  estimated  fair  value of the  Company's  financial  instruments  as of
    September 30, 1995 and 1996 are as follows:   

                                          1995                  1996
                                  ---------------------  -----------------------
                                              Estimated             Estimated
                                  Carrying      Fair     Carrying     Fair
                                   Amount       Value     Amount      Value

Assets:
  Cash and cash equivalents       $  5,677   $  5,677   $  5,618   $  5,618
  Investment securities             54,243     53,978     86,235     83,827
  Capital stock of Federal Home
    Loan Bank                        2,206      2,206      4,327      4,327
  Mortgage-related securities       40,004     40,342     34,383     34,366
  Loans held for sale               22,108     22,335     13,718     13,816
  Loans receivable                 124,796    127,254    171,158    173,295
  Mortgage servicing rights         11,625     18,225     12,496     18,326

Liabilities:
  Deposits                         195,716    196,098    214,493    215,016
  Advances from Federal Home
    Loan Bank                       33,000     33,063     81,700     81,857
  Accrued and other liabilities      2,668      2,668      4,683      4,683

<TABLE>
<CAPTION>

                                                               1995                          1996
                                                     ----------------------------  ----------------------------
                                                      Contract       Estimated      Contract      Estimated
                                                         or          Unrealized        or         Unrealized
                                                      Notional        Gain          Notional         Gain
                                                       Amount        (Loss)          Amount         (Loss)

Off-balance sheet financial instruments:
<S>                                                   <C>             <C>           <C>             <C>     
  Lending commitments - fixed rate, net               $    23,711     $    30       $    39,491     $    117
  Lending commitments - floating rate                      13,222                        24,252
  Commitments to sell loans                                35,950          70            28,345          (64)

</TABLE>

    The following  methods and assumptions were used to estimate the fair value
    of the financial instruments.

    Cash and Cash  Equivalents and Accrued and Other  Liabilities - The carrying
    amounts of cash and cash equivalents and accrued and other liabilities are a
    reasonable estimate of their fair value.

    Investment Securities, Mortgage-Related Securities and Loans Held for Sale -
    Estimated fair values of investment securities,  mortgage-related securities
    and loans held for sale are based on quoted market  prices where  available.
    If quoted market prices are not available,  fair values are estimated  using
    quoted market prices for similar instruments.

    Capital  Stock of  Federal  Home Loan Bank - The  carrying  value of capital
    stock of Federal Home Loan Bank approximates its fair value.

                                      -55-
<PAGE>


    Mortgage  Servicing  Rights - Fair values are determined by discounting  the
    estimated   future  net  cash  flows  using  consensus   market   prepayment
    assumptions  and discount rates which consider the risk  characteristics  of
    the  underlying  servicing  rights.  The  significant  risk  characteristics
    considered by the Company are loan type,  period of origination and interest
    rate.

    Loans  Receivable - Fair values are  estimated for  portfolios  with similar
    financial  characteristics.  Loans are  segregated  by type,  such as single
    family   residential   mortgages,    multi-family   residential   mortgages,
    nonresidential   and  installment  loans.  Each  loan  category  is  further
    segmented  into fixed and variable  interest  rate  categories.  Future cash
    flows of these loans are discounted using the current rates at which similar
    loans would be made to  borrowers  with similar  credit  ratings and for the
    same remaining maturities.

    Deposits - The estimated fair value of demand deposits and savings  accounts
    is the amount  payable on demand at the reporting  date.  The estimated fair
    value of fixed-maturity  certificates of deposit is estimated by discounting
    the future cash flows  using the rates  currently  offered  for  deposits of
    similar remaining maturities.

    Advances from Federal Home Loan Bank - The estimated  fair value of advances
    from Federal Home Loan Bank is  determined  by  discounting  the future cash
    flows of existing advances using rates currently  available on advances from
    Federal Home Loan Bank having similar characteristics.

    Lending  Commitments - Fixed Rate - The estimated  fair value of commitments
    to originate  fixed-rate loans is determined based on the difference between
    current  levels of interest  rates and the  committed  rates.  The  notional
    amount of lending  commitments - fixed rate  represents the net amount which
    the Savings  Bank expects to fund.  The Savings  Bank's  estimate,  based on
    experience,  is that 25% of its  lending  commitments  - fixed rate will not
    close.

    Lending Commitments - Floating Rate - There is no estimated  unrealized gain
    (loss)  attributable  to  floating  rate  lending  commitments  due to their
    floating interest rate nature.

    Commitments to Sell Loans - The estimated  unrealized gain (loss) associated
    with  commitments  to sell loans is based on current  market prices that the
    buyer will pay for such commitments.

    The fair value estimates presented herein are based on pertinent information
    available  to  management  as of  September  30,  1995  and  1996.  Although
    management is not aware of any factors that would  significantly  affect the
    estimated  fair value  amounts,  such amounts have not been  comprehensively
    revalued  for  purposes  of these  financial  statements  since  that  date.
    Therefore, current estimates of fair value may differ significantly from the
    amounts presented herein.

18. SEGMENT INFORMATION

    The Savings Bank's operations include two reportable  segments:  savings and
    loan and mortgage banking. The savings and loan segment is composed of those
    operations  involved  in  originating  mortgage  loans held for  investment,
    primarily  on  single  family  residences;   investing  in  mortgage-related
    securities,  United  States  Treasury  and other U.S.  Government  agencies'
    securities  and receiving  deposits  from  customers.  The mortgage  banking
    segment  is  composed  of  those  operations  involved  in  originating  and
    purchasing  residential  mortgage loans for resale in the secondary mortgage
    market and in servicing loans for others.

                                      -56-
<PAGE>

    Intersegment  interest  income and expense  represent  interest on loans and
    advances from the savings and loan segment to the mortgage  banking  segment
    computed at the prime rate of interest.
<TABLE>
<CAPTION>
                                                                1994
                                        ------------------------------------------------------
                                         Savings       Mortgage
                                           Bank        Banking    Eliminations   Consolidated
Interest income:
<S>                                     <C>          <C>          <C>           <C>      
  Unaffiliated customers                $   9,467    $   2,082                  $  11,549
  Intersegment                              2,330                 $  (2,330)
                                        ---------    ---------                  ---------

           Total interest income           11,797        2,082       (2,330)       11,549
                                        ---------    ---------    ---------     ---------

Interest expense:
  Unaffiliated customers                    5,944                                   5,944
  Intersegment                                           2,330       (2,330)
                                        ---------    ---------    ---------     ---------

           Total interest expense           5,944        2,330       (2,330)        5,944
                                        ---------    ---------    ---------     ---------

Net interest income (expense)               5,853         (248)   $                 5,605
                                                                   ========
Provision for loan losses                      (6)                                     (6)
Other income                                1,116        2,685                      3,801
Other expense                              (3,919)      (2,421)                    (6,340)
                                           ------       ------                     ------ 

Income before income taxes              $   3,044    $      16                  $   3,060
                                        =========    =========                  =========

Identifiable assets                     $ 170,984    $  31,644                  $ 202,628
                                        =========    =========                  =========

Depreciation and amortization expense   $     284    $      74                  $     358
                                        =========    =========                  =========

Capital expenditures                    $     911    $     214                  $   1,125
                                        =========    =========                  =========
</TABLE>


                                      -57-
<PAGE>
<TABLE>
<CAPTION>
                                                              1995
                                        ----------------------------------------------------
                                         Savings       Mortgage
                                          Bank        Banking    Eliminations   Consolidated
Interest income:
<S>                                     <C>          <C>          <C>          <C>      
  Unaffiliated customers                $  14,499    $   1,726                 $  16,225
  Intersegment                              1,937                 $  (1,937)
                                        ---------    ---------    ---------    ---------

           Total interest income           16,436        1,726       (1,937)      16,225
                                        ---------    ---------    ---------    ---------
Interest expense:
  Unaffiliated customers                    9,004                                  9,004
  Intersegment                                           1,937       (1,937)
                                        ---------    ---------    ---------    ---------
           Total interest expense           9,004        1,937       (1,937)       9,004
                                        ---------    ---------    ---------    ---------

Net interest income (expense)               7,432         (211)   $                7,221
                                                                  =========
Provision for loan losses                    (224)                                  (224)
Other income                                1,580        6,174                     7,754
Other expense                              (5,431)      (2,770)                   (8,201)
                                        ---------    ---------                 --------- 

Income before income taxes              $   3,357    $   3,193                 $   6,550
                                        =========    =========                 =========

Identifiable assets                     $ 214,649    $  56,274                 $ 270,923
                                        =========    =========                 =========

Depreciation and amortization expense   $     338    $      53                 $     391
                                        =========    =========                 =========

Capital expenditures                    $   1,014    $     403                 $   1,417
                                        =========    =========                 =========

</TABLE>
<TABLE>
<CAPTION>
                                                              1996
                                    ---------------------------------------------------
                                      Savings      Mortgage
                                        Bank       Banking    Eliminations Consolidated
Interest income:
<S>                                 <C>          <C>          <C>          <C>      
  Unaffiliated customers            $  17,859    $   2,314                 $  20,173
  Intersegment                          2,723                 $  (2,723)
                                    ---------    ---------    ---------    ---------

           Total interest income       20,582        2,314       (2,723)      20,173
                                    ---------    ---------    ---------    ---------

Interest expense:
  Unaffiliated customers               12,268                                 12,268
  Intersegment                                       2,723       (2,723)
                                    ---------    ---------    ---------    ---------

           Total interest expense      12,268        2,723       (2,723)      12,268
                                    ---------    ---------    ---------    ---------

Net interest income (expense)           8,314         (409)   $                7,905
                                                              =========
Provision for loan losses                 (75)                                   (75)
Other income                            2,121        5,051                     7,172
Other expense                          (6,962)      (3,021)                   (9,983)
                                    ---------    ---------                 --------- 

Income before income taxes          $   3,398    $   1,621                 $   5,019
                                    =========    =========                 =========

Identifiable assets                 $ 293,415    $  46,771                 $ 340,186
                                    =========    =========                 =========

Depreciation expense                $     257    $      87                 $     344
                                    =========    =========                 =========

Capital expenditures                $   1,489    $     369                 $   1,858
                                    =========    =========                 =========

</TABLE>

                                      -58-
<PAGE>

19. PARENT COMPANY FINANCIAL INFORMATION (PARENT COMPANY ONLY)

    Mid Continent Bancshares, Inc. was organized to serve as the holding company
    for Mid-Continent Federal Savings Bank and began operations on June 27, 1994
    in conjunction  with the Savings Bank's  mutual-to-stock  conversion and the
    Company's  initial public  offering of common stock.  The Company's  (Parent
    company only)  balance  sheets as of September 30, 1995 and 1996 and related
    statements  of income  and cash  flows  for the  periods  then  ended are as
    follows:

BALANCE SHEETS
SEPTEMBER 30, 1995 AND 1996
(Dollars in thousands, except share amounts)
--------------------------------------------------------------------------------

ASSETS                                                       1995        1996
                                                          --------    --------

CASH AND CASH EQUIVALENTS                                 $  1,029    $    287

NOTES RECEIVABLE FROM MID-CONTINENT
  FEDERAL SAVINGS BANK                                       7,292       4,951

INVESTMENT IN AND ADVANCES TO
  MID-CONTINENT FEDERAL SAVINGS BANK                        28,672      31,827

OTHER ASSETS                                                   108          76
                                                          --------    --------

TOTAL ASSETS                                              $ 37,101    $ 37,141
                                                          ========    ========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES -
  Income taxes payable                                    $    126    $    112
  Accrued and other liabilities                                240         222
                                                          --------    --------
           Total liabilities                                   366         334
                                                          --------    --------

STOCKHOLDERS' EQUITY
  Common stock $.10 par value, 20,000,000
   authorized, 2,248,250 shares issued                         225         225
  Additional paid-in capital                                21,553      21,663
  Unearned compensation - Employee Stock Ownership Plan     (1,190)     (1,054)
  Unearned compensation - Management Stock Bonus Plan         (746)       (547)
  Retained earnings, substantially restricted               18,067      20,424
                                                          --------    --------
                                                            37,909      40,711

  Treasury stock, 80,000 and 231,500 shares, at cost        (1,174)     (3,904)
                                                          --------    --------
           Total stockholders' equity                       36,735      36,807
                                                          --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $ 37,101    $ 37,141
                                                          ========    ========

                                      -59-
<PAGE>


STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1995 AND 1996
(Dollars in thousands, except share amounts)
----------------------------------------------------------------
                                          1995    1996
                                        ------   ------

INTEREST INCOME                         $  575   $  361
                                        ------   ------
OTHER EXPENSES:
  Professional fees                         82       44
  Other                                    105       94
                                        ------   ------
           Total other expense             187      138
                                        ------   ------

INCOME BEFORE INCOME TAX EXPENSE
  AND EQUITY IN UNDISTRIBUTED NET
  INCOME OF SUBSIDIARY                     388      223

INCOME TAX EXPENSE                         140       85
                                        ------   ------

INCOME BEFORE EQUITY IN UNDISTRIBUTED
  NET INCOME OF SUBSIDIARY                 248      138

EQUITY IN UNDISTRIBUTED NET
  INCOME OF SUBSIDIARY                   3,858    2,988
                                        ------   ------

NET INCOME                              $4,106   $3,126
                                        ======   ======

                                      -60-
<PAGE>

STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1995 AND 1996
(Dollars in thousands, except share amounts)
--------------------------------------------------------------------------------

                                                               1995      1996

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                 $ 4,106    $ 3,126
  Adjustment to reconcile net income to
    net cash provided by operating activities:
    Equity in undistributed earnings of subsidiary            (3,858)    (2,988)
    Changes in:
      Other assets                                               (39)         6
      Accrued and other liabilities                               24        100
      Income taxes payable                                        94        (14)
                                                             -------    -------
           Net cash flows provided by operating activities       327        230
                                                             -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Principal collected on notes receivable from
    Mid-Continent Federal Savings Bank                         2,968      2,342
                                                             -------    -------

           Net cash flows provided by investing activities     2,968      2,342
                                                             -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Acquisition of common stock for Management
    Stock Bonus Plan                                            (995)
  Receipt of funds for Management Stock Bonus Plan stock         199        199
  Acquisition of treasury stock                               (1,174)    (2,730)
  Cash dividends on common stock to stockholders                (615)      (783)
                                                             -------    -------

            Net cash flows used in financing activities       (2,585)    (3,314)
                                                             -------    -------

NET INCREASE (DECREASE) CASH AND CASH EQUIVALENTS                710       (742)

CASH AND CASH EQUIVALENTS:
  Beginning of year                                              319      1,029
                                                             -------    -------

  End of year                                                $ 1,029    $   287
                                                             =======    =======

SUPPLEMENTAL DISCLOSURES OF NONCASH
  INVESTING AND FINANCING ACTIVITIES -
  Accrued dividends on common stock                          $   205    $   188
                                                             =======    =======

    These statements  should be read in conjunction with the other notes related
    to the consolidated financial statements.

                                      -61-
<PAGE>

20. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>

                                                                          Quarter Ended
                                                            (In thousands, except earnings per share)
                                                   --------------------------------------------------------------
                                                     December 31,    March 31,     June 30,      September 30,
                                                        1994            1995         1995            1995

<S>                                                    <C>            <C>           <C>             <C>       
Interest income                                        $    3,607     $     3,750   $    4,371      $    4,497
Interest expense                                            1,823           2,045        2,466           2,670
Net interest income                                         1,784           1,705        1,905           1,827
Net income                                                    880           1,317        1,083             826
Earnings per share -
  Net income                                                 0.41           0.62          0.54            0.40

</TABLE>

<TABLE>
<CAPTION>
                                                                          Quarter Ended
                                                            (In thousands, except earnings per share)
                                                ---------------------------------------------------------------
                                                   December 31,    March 31,     June 30,       September 30,
                                                      1995            1996         1996            1996

<S>                                                 <C>             <C>          <C>             <C>       
Interest income                                     $    4,726      $    4,707   $    5,089      $    5,651
Interest expense                                         2,806           2,913        3,051           3,498
Net interest income                                      1,920           1,794        2,038           2,153
Net income                                                 951             820          896             459(l)
Earnings per share -
  Net income                                              0.48            0.42         0.46            0.23
</TABLE>

(1)  Reflects a fourth  quarter  charge for the one-time  assessment  of federal
     insurance premiums (See Note 22).

    The  Company  has  restated  its  fiscal  year  1995   quarterly   financial
    information  for the  effects  of the  adoption  of SFAS  No.  122 as of the
    beginning  of the  fiscal  year (See  Note 2).  The  implementation  of this
    Statement  increased  net  income  approximately  $174 in the  three  fiscal
    quarters  ended June 30, 1995. Net income  previously  reported on Form 10-Q
    was $823,  $1,279,  $1,004 and  earnings per share  previously  reported was
    $.39,  $.60 and $.49,  respectively,  for the  fiscal  1995  quarters  ended
    December 31, March 31 and June 30.

21. INTEREST RATE RISK

    The Company is engaged  principally  in providing  first  mortgage  loans to
    individuals. For the year ending September 30, 1996, the Company had average
    interest earnings assets of approximately $270,566 having a weighted average
    effective  yield  of 7.46%  and  average  interest  bearing  liabilities  of
    approximately  $249,650 having a weighted average effective interest rate of
    4.91%.  The average  maturity or  repricing  of interest  earning  assets is
    generally  longer  than that of the  liabilities.  The  shorter  duration of
    interest  sensitive  liabilities  indicates  that the  Company is exposed to
    interest rate risk because,  in a rising rate environment,  liabilities will
    be repricing  upwards more rapidly  than the  Company's  interest  sensitive
    assets, thereby reducing net interest income.

                                      -62-
<PAGE>

22. FEDERAL LEGISLATION

     In September  1996,  legislation was enacted which included a comprehensive
     reform of the  banking and thrift  industries.  The  legislation  imposes a
     one-time  assessment  on qualifying  thrift  deposits to  recapitalize  the
     Savings Association Insurance Fund ("SAIF"),  the fund which insures thrift
     deposits,  and  ultimately  merges the Bank  Insurance Fund ("BIF") and the
     SAIF, at which time banks and thrifts would pay the same deposit  insurance
     premiums.  The amount of the  one-time  assessment  is .657% on  qualifying
     thrift deposits as of March 31, 1995. This one-time assessment of $1,053 is
     included in federal  insurance  premiums for the year ended  September  30,
     1996.
                                   * * * * * *

                                      -63-
<PAGE>



Mid Continent Bancshares, Inc.
================================================================================

<TABLE>
<CAPTION>
 
Directors of                                                  Directors  of
Mid Continent Bancshares, Inc.                                Mid-Continent Federal Savings Bank
------------------------------                                ----------------------------------

<S>                                                           <C>
Richard T. Pottorff - Chairman                                Richard T. Pottorff - Chairman
Officer - Mid-Continent Federal Savings Bank                  Dr. Ken Dellett
Dr. Ken Dellett - Vice Chairman                               Thomas C. Hand
Retired - Physician                                           Ron McGraw
Thomas C. Hand                                                Don Adlesperger
President - Hand Realty Co.                                   Larry R. Goddard
Ron McGraw                                                    Robert Lasater *
President - Sunflower Roofing, Inc.                           Clem Silvers *
Don Adlesperger                                               *   Advisory Directors
President - Triple A Builders Supply
Larry R. Goddard
Officer - Mid-Continent Federal Savings Bank

Officers of                                                   Officers of
Mid Continent Bancshares, Inc.                                Mid-Continent Federal Savings Bank
------------------------------                                ----------------------------------

Richard T. Pottorff                                           Richard T. Pottorff
Chairman, President & CEO                                     Chairman, President & CEO
Larry R. Goddard                                              Larry R. Goddard
Executive Vice President & CFO                                Executive Vice President & CFO
Harold Siemens                                                Harold Siemens
Senior Vice President                                         Senior Vice President
Cheryl A. Wilkerson                                           Cheryl A. Wilkerson
Secretary                                                     Vice President, Secretary
David L. Walter                                               David L. Walter
Vice President                                                Vice President/Treasurer
Richard O. Nelson                                             Craig Yaryan
Vice President                                                Vice President
                                                              Eric Hawkins
                                                              Vice President
                                                              William Cole
                                                              Vice President
                                                              Diane Griffin
                                                              Vice President
                                                              Larry E. Haury
                                                              Vice President
                                                              Jill Norman
                                                              Vice President

</TABLE>


                                      -64-
<PAGE>


Mid Continent Bancshares, Inc.
================================================================================

LEGAL COUNSEL
General Counsel                     Special Counsel
Adams, Jones, Robinson              Malizia, Spidi, Sloane & Fisch, P.C.
   and Malone                       One Franklin Square
155 N. Market                       1301 K Street, NW - Suite 700 East
Wichita, KS  67202                  Washington, DC  20005

AUDITORS                            TRANSFER AGENT
Deloitte & Touche LLP               American Securities Transfer & Trust, Inc.
Suite 400                           938 Quail St. Suite 101
1010 Grand Avenue                   Lakewood, CO 80215
Kansas City, MO  64106              Phone: (303) 234-5300

                        OFFICE LOCATIONS
                Executive and Administrative Office
                       124 W. Central
                       El Dorado, Kansas 67042
                       (316) 321-2700

El Dorado                                      Wichita                      
   405 N. Main                                    255 N. Main
   El Dorado, KS 67042                            Wichita, KS 67202
   (316) 321-2700                                 (316) 264-4133
                                         
Augusta                                           762 N. West St.
   1420 N. Ohio                                   Wichita, KS 67203
   Augusta, KS 67010                              (316) 946-0202
   (316) 775-2208                        
                                                  2123 N. Maize Road
Winfield                                          Wichita, KS  67212
   1113 S. Main                                   (316) 729-7999
   Winfield, KS 67156                    
    (316) 221-3830                                3055 N. Rock Road
                                                  Wichita, KS  67226
Winfield                                          (316) 634-2800
   2310 S. Main                          
   Winfield, KS  67156                         FUTURE LOCATIONS   
   (316) 221-0158          .                      Derby
                                                  79th and Rock Road
Newton                                            Derby, KS 67037
   100 W. 12th
   Newton, KS 67114
   (316) 283-7310

                                      -65-