Mid Continent Bancshares, Inc.
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                                    CONTENTS


A Letter to Our Shareholders                                                  1

Business of the Bancorp and Savings Bank                                    2-3

Selected Consolidated Financial Highlights                                  4-5

Market and Dividend Information                                               6

Management's Discussion and Analysis                                       7-27

Consolidated Financial Statements                                         28-68

Directors and Officers and Other Information                              69-70


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Mid Continent Bancshares, Inc.
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A letter to Our Shareholders
----------------------------

Dear Stockholder:

During the fiscal year of 1997 there were numerous and exciting changes with Mid
Continent Bancshares, Inc. and Mid-Continent Federal Savings Bank.

In retrospect,  the year and the financial changes for the Bank was outstanding.
The Bank's assets increased 19.1%, to $405 million.

During the year the loan portfolio  increased from $171 million to $233 million.
The increase was in adjustable rate and short-term fixed-rate mortgages held for
investment. The Bank's loan servicing portfolio increased to $1.291 billion.

The Bank's deposits accounts balances increased by $22 million.  The Bank's High
Performance checking accounts has continued to increase at a rapid rate with the
total number of accounts being approximately 19,000.

The stockholders' equity increased from $36.8 million to $40.0 million, or 8.6%.

Looking to the future, Mid Continent  Bancshares on September 2, 1997 executed a
definitive  agreement with Commercial  Federal of Omaha,  Nebraska to merge. The
Board of Directors,  after a long  deliberation,  concluded that this was in the
best interest of the  stockholders,  the future of the Bank, its employees,  and
the communities it serves.

Commercial  Federal is an  outstanding  company  and has the same  business  and
community  responsibilities  as Mid-Continent.  The Board of Directors encourage
you to vote in the affirmative for the merger of these two companies.

We thank you, the stockholders of Mid Continent Bancshares,  for your confidence
you  have  shown  in the  Bank,  the  Board  of  Directors,  management  and our
employees.

Very truly yours,
MID CONTINENT BANCSHARES, INC.

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


                                       1
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Mid Continent Bancshares, Inc.
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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.

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, 1997 the Bancorp has reacquired 290,000 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, to originate consumer and
construction  loans for its portfolio.  The Savings Bank  purchases  one-to-four
family  residential loans through  approximately 125  correspondents  located in
Kansas,   Oklahoma,   and  in  Missouri.   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, Derby 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 and  another in Derby,  Kansas in fiscal  1997.  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

                                       2
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Mid Continent Bancshares, Inc.
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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,  and borrowings from the Federal Home Loan
Bank of Topeka and the  Bancorp.  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.

                                       3
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Mid Continent Bancshares, Inc.
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Selected Consolidated Financial Highlights
------------------------------------------

The following table sets forth certain  information at the dates and the periods
indicated. Average data presented herein is primarily calculated on the basis of
daily  balances.  All dollar amounts are in thousands  except per share data and
selected ratios.
<TABLE>
<CAPTION>
                                                                     At September 30,
                                          --------------------------------------------------------------------------
                                               1993          1994           1995            1996            1997
                                          ------------ -------------- -------------- --------------- ---------------
                                                                    Dollars in Thousands
<S>                                          <C>            <C>            <C>             <C>             <C>     
Total Amount of:
   Assets                                    $170,012       $202,628       $270,923        $340,186        $405,262
   Loans receivable                            56,623        102,243        124,796         171,158         233,311
   Mortgage-related securities                 42,856         45,030         40,004          34,383          28,124
   Loans held for sale                         27,734          5,527         22,108          13,718          13,894
   Investments and FHLB Stock                  15,144         24,374         56,449          90,562          86,065
   Mortgage servicing rights                    3,243          6,312         11,625          12,496          13,615
   Excess of cost over fair value of
    assets acquired (Goodwill)                    252            161             83              22              --
   Cash and cash equivalents                   17,701         10,823          5,677           5,618          17,327
   Savings deposits                           145,838        154,764        195,716         214,493         236,333
   Other borrowings                             7,500          9,000         33,000          81,700         121,800
   Stockholders' equity                        12,792         35,208         36,735          36,807          39,982

Number of:
   Real estate loans outstanding                2,124          1,985          2,568           2,864           3,628
   Deposit accounts                            17,557         21,743         27,192          29,609          35,226
   Full service offices                             6              6              7               8              10
   Employees                                      100            112            119             150             166

Principal   balance  of  loans  serviced
for others                                   $580,768       $908,112     $1,189,892      $1,229,153      $1,291,331

</TABLE>


                                       4
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SUMMARY OF OPERATIONS
<TABLE>
<CAPTION>
                                                                           Year Ended September 30,
                                                  -------------------------------------------------------------------
                                                                             Dollars in Thousands
                                                          1993         1994          1995          1996         1997
                                                  ------------- ------------ ------------- ------------- ------------
<S>                                                    <C>          <C>           <C>           <C>          <C>    
Interest Income                                        $12,885      $11,549       $16,225       $20,173      $26,047
Interest Expense                                         7,376        5,944         9,004        12,268       16,834
                                                  ------------- ------------ ------------- ------------- ------------
      Net interest income                                5,509        5,605         7,221         7,905        9,213
Provision for loan losses                                  154            6           224            75          143
                                                  ------------- ------------ ------------- ------------- ------------
      Net interest  income after  provision  for         5,355        5,599         6,997         7,830        9,070
loan losses
                                                  ------------- ------------ ------------- ------------- ------------
Non-interest income:
   Loan servicing fees                                   1,804        2,689         4,407         4,779        4,841
   Amortization of mortgage servicing rights             (679)        (899)       (1,305)       (1,651)      (1,742)
   Gain on sale of mortgage servicing rights                                        1,961
   Service fees and other charges to customers             618        1,032         1,846         2,539        3,067
   Gain on sale of loans held for sale, net              2,596          896           706         1,367        1,194
   Other income                                            358           83           139           138          159
                                                  ------------- ------------ ------------- ------------- ------------
      Total non-interest income                          4,697        3,801         7,754         7,172        7,519
                                                  ------------- ------------ ------------- ------------- ------------
   Total non-interest expense (1)                        5,632        6,340         8,202         9,983        9,742
                                                  ------------- ------------ ------------- ------------- ------------
Income before income tax expense and  cumulative
effect of change in accounting principle                 4,420        3,060         6,549         5,019        6,847

Income tax expense                                       1,616        1,195         2,443         1,893        2,677
                                                  ------------- ------------ ------------- ------------- ------------

Income  before  cumulative  effect  of change in
accounting principle                                     2,804        1,865         4,106         3,126        4,170

Cumulative   effect  of  change  in   accounting                        136
principle (2)
                                                  ------------- ------------ ------------- ------------- ------------

Net income                                              $2,804       $2,001        $4,106        $3,126       $4,170
                                                  ============= ============ ============= ============= ============

Earnings per share (3)                                                $0.30         $1.97         $1.59        $2.15
                                                                      =====         =====         =====        =====

Cash dividends per share                                                            $0.40         $0.40        $0.40
                                                                                    =====         =====        =====
</TABLE>

Selected Financial Ratios
<TABLE>
<CAPTION>

                                                                       Year Ended September 30,
                                                         1993          1994          1995          1996         1997
<S>                                                   <C>           <C>           <C>           <C>          <C>  
Return on average assets                                1.61%         1.14%         1.75%         1.07%        1.11%
Return on average equity                               24.12%        10.54%        11.86%         8.54%       10.95%
Dividend payout ratio                                     --            --         20.30%        25.16%       18.60%
Average total equity to average assets                  6.67%        10.81%        14.74%        12.56%       10.14%
Net interest rate spread                                3.23%         3.15%         2.90%         2.58%        2.38%
</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.

                                       5

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Mid Continent Bancshares, Inc.
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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, 1996 and 1997:

         Quarter Ended                      High              Low
         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
         December 31, 1996                  25 1/2            18 3/4
         March 31, 1997                     27 1/8            23 3/8
         June 30, 1997                      29 1/4            25 1/8
         September 30, 1997                 38 7/8            28 3/4

During the years ended  September  30, 1996 and 1997,  the Bancorp  declared and
paid cash dividends to shareholders as follows:

Declaration Date     Shareholder Record Date   Payment Date     Amount Per Share
----------------     -----------------------   ------------     ----------------
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
December 1996        January 2, 1997           January 16, 1997          0.10
March 27, 1997       April 10, 1997            April 24, 1997            0.10
June 26, 1997        July 10, 1997             July 24, 1997             0.10
September 25, 1997   October 9, 1997           October 23, 1997          0.10
                                                                
The Bancorp has approximately 925 stockholders.  This number includes 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  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, 1997,  exceeded the amounts of its liquidation  account
and regulatory capital requirements.

                                       6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars in thousands)

GENERAL
-------
Mid Continent Bancshares, Inc. was formed to purchase all of the common stock of
Mid-Continent  Federal  Savings  Bank  in  connection  with  the  Saving  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-related 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.

Mid-Continent  Federal Savings Bank is a federally  chartered stock savings bank
located in El Dorado,  Kansas in Butler County,  Kansas.  Mid-Continent  Federal
Savings Bank 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 less extent, to originate  consumer and construction
loans  for  its  portfolio.   The  Savings  Bank  purchases  one-to-four  family
residential loans through  correspondents  located in Kansas,  Oklahoma,  and in
Missouri.  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 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.

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.


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On  September 2, 1997,  the Bancorp  entered  into a  Reorganization  and Merger
Agreement  ("the  agreement") to be acquired by Commercial  Federal  Corporation
("Commercial  Federal").  Under the terms of the agreement,  Commercial  Federal
will acquire through a tax-free  reorganization all of the outstanding shares of
the Bancorp's  common stock in exchange for Commercial  Federal's  common stock.
The exchange  ratio will be determined  based upon the average  closing price of
Commercial Federal's common stock during a twenty consecutive trading day period
prior to closing.  Based on Commercial  Federal's  closing price on September 2,
1997,  Mid  Continent  shareholders  would  receive  .8693 shares of  Commercial
Federal  common  stock  for  each  share  of  Mid  Continent  Bancshares,   Inc.
outstanding  common stock.  The acquisition is subject to regulatory  approvals,
the Bancorp's  shareholders'  approval and other  conditions  and is expected to
close in the second fiscal  quarter of 1998.  Regardless of whether the proposed
acquisition is  consummated,  the following  discussion  addresses the financial
condition,  results of operation,  liquidity  and capital  resources and ongoing
strategy of the Bancorp and Savings Bank.

MANAGEMENT STRATEGY
-------------------
The Savings Bank's lending strategy has focused  historically on the origination
of mortgage  loans 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-related 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  adjustable  rate mortgage and short-term
fixed-rate  loan  portfolio and (v) building a loan  servicing  portfolio  whose
market  value  floats  inversely  to the  movement  of  interest  rates.  A loan
servicing  portfolio  becomes more  valuable as the  "turnover"  in the mortgage
loans slows. 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, 1996
------------------------------------------------------
TO SEPTEMBER 30, 1997
---------------------

Total assets increased $65,076,  or 19.1% from $340,186 at September 30, 1996 to
$405,262 at September  30, 1997.  The increase is  attributable  to increases of
$11,709 in cash,  $62,153 in 

                                       8
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loans  receivable,  and $1,119 in mortgage  servicing  rights.  Mortgage-related
securities  decreased  $6,259 and  investments  and Federal Home Loan Bank stock
decreased $4,497. Investment securities and FHLB stock decreased from $90,562 at
September 30, 1996 to $86,065 at September 30, 1997. At September 30, 1997 there
are callable  securities with a carrying value of approximately  $70,830 bearing
interest at various rates ranging from 4.98% to 7.87% with stated maturity dates
ranging from 1998 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 $171,158 at September 30, 1996 to $233,311 at
September   30,  1997.   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 $59,669 and consumer
loans   increased   $1,029.   The  Bank  expects  to  increase  its  residential
(one-to-four  unit),  first mortgage loans in fiscal 1998, but not to the extent
that these loans were increased in fiscal 1997.

Mortgage servicing rights increased $1,119 during fiscal 1997. During the fiscal
year the  Savings  Bank  increased  its  servicing  portfolio  for  others  from
$1,229,153 to $1,291,331.

Deposit accounts  increased  $21,840.  Savings  certificate  accounts  increased
$12,401 and Demand and NOW deposit  accounts  increased  $6,678.  Demand and NOW
accounts  which  totaled  $43,463 at September  30, 1997  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  $40,100  from  $81,700 at
September 30, 1996 to $121,800 at September 30, 1997.  The Savings Bank utilizes
advances  from the Federal  Home Loan Bank to meet its cash needs as they arise.
The Savings  Bank has a $68,292  line of credit with the Federal Home Loan Bank,
subject  to  certain  limitations,  for  the  purpose  of  providing  short-term
financing.  At September 30, 1997, $7,300 was outstanding  relative to this line
of credit.

Stockholders'  equity increased  $3,175,  or 8.6%, from $36,807 to $39,982.  Net
income for the year was $4,170.

Other  significant  transactions  during the year  included the  acquisition  of
58,500 shares of the Bancorp's common stock for treasury at a cost of $1,481 and
cash  dividends  paid  or  payable  to  common  stockholders  of  $743.  See the
accompanying Consolidated Statements of Stockholders' Equity for more detail.

                                       9
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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 for the year ended
September  30,  1995 to $7,905  for the year ended  September  30,  1996.  Total
average interest-earnings assets increased $52,867 from 1995 to 1996. Components
of the  interest-earning  assets are discussed above.  Overall the average yield
remained  unchanged,  at 7.49% in 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 110.4% at September 30, 1995 to 107.9% at September 30, 1996.

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,

                                       10
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


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. Loan
servicing  fees  increased  $372,  from  $4,407  in  1995  to  $4,779  in  1996.
Amortization of mortgage servicing rights increased $346, from $1,305 in 1995 to
$1,651 in 1996.  The growth in gross  servicing  fees was 8.44%.  Servicing fees
result primarily from service fees paid by investors and correlate  closely with
the size of the loan  servicing  portfolio.  The change 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
are   influenced  by  changes  in  the  servicing   portfolio,   scheduled  loan
amortization,  anticipated and actual prepayments and changes in market interest
rates.

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 loans 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 on
the sale of loans  are  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,  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.


                                       11
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================



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 Savings Association  Insurance Fund
(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 19 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, 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.

                                       12
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


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.


                                       13
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


COMPARISON OF OPERATING RESULTS FOR YEARS
-----------------------------------------
ENDED SEPTEMBER 30, 1996  AND 1997
------------------------  --------

GENERAL
-------
Net  income  increased  by  $1,044,  or 33.40%  from  $3,126  for the year ended
September 30, 1996 to $4,170 for the year ended September 30, 1997.

TOTAL INTEREST INCOME
---------------------
Total interest income increased  $5,874,  or 29.12%,  to $26,047 during the year
ended  September  30, 1997 from $20,173 for the year ended  September  30, 1996.
Interest  income on loans  receivable  and on  investment  securities  increased
$4,268 and $2,048, respectively.  The average yield on loans declined from 7.76%
in 1996 to 7.68% in 1997,  but  increases in the loan  portfolio  resulted in an
increase in loan  interest in 1997 over 1996.  The average  yield of  investment
securities  increased from 7.15% in 1996 to 7.18% in 1997. 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
$384 as mortgage-related  securities repaid in the amount of $6,228. The average
yield on  mortgage-related  securities  increased from 7.36% in 1996 to 7.42% in
1997,  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 $58 due to reduced  average cash
balances.  The average rate of interest earned on interest-bearing cash accounts
increased  from  1996 to  1997,  but the  demand  for  cash  to fund  loans  and
investment  securities,  which paid higher yields,  reduced the overall interest
income from cash accounts.

NET INTEREST INCOME
-------------------
Net interest income  increased  $1,308,  or 16.55%,  from $7,905 during the year
ended September 30, 1996 to $9,213 for the year ended September 30, 1997.  Total
average  interest-earning assets increased $79,435 from 1996 to 1997. Components
of the  interest-earning  assets are discussed above.  Overall the average yield
remained  substantially  unchanged  for  1996 and  1997,  at  7.49%  and  7.47%,
respectively.  The major increase in interest  income was due to the increase in
interest-earning assets.

Average  interest-bearing  liabilities increased $81,076 from 1996 to 1997. Both
deposit accounts and borrowed money increased in 1997. Average rates on deposits
increased  from 4.63% in 1996 to 4.71% in 1997.  The  average  interest  rate on
borrowed money,  however,  declined from 6.21% in 1996 to 5.98% in 1997. Overall
rates on interest-bearing  liabilities  increased from 4.91% in 1996 to 5.09% in
1997.

The ratio of average  interest-bearing  assets to  interest-bearing  liabilities
decreased from 107.9% at September 30, 1996 to 105.5% at September 30, 1997.

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, 

                                       14
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


estimated  value of the underlying  collateral  and current and expected  market
conditions.  The  allowance  for loan losses was $421 and $465 at September  30,
1996 and 1997, respectively. The provision for losses on loans increased $68 for
the year ended  September 30, 1997. 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 $347, or 4.84%, during the year ended September 30, 1997,
as compared to the year ended September 30, 1996.

Loan  servicing  fees (net of  amortization)  decreased  by $29, or 0.93%,  from
$3,128  to  $3,099  during  the  years  ended   September  30,  1996  and  1997,
respectively.  Loan  servicing fees increased $62, from $4,779 in 1996 to $4,841
in 1997. Amortization of mortgage servicing rights increased $91, from $1,651 in
1996 to $1,742 in 1997. The growth in gross servicing fees was 1.30%.  Servicing
fees result primarily from service fees paid by investors and correlate  closely
with the size of the loan  servicing  portfolio.  The change in  servicing  fees
during the year ended  September  30, 1997, is reflective of the increase in the
amount  of loans  serviced  by  Mid-Continent  for  others  from  $1,229,153  at
September 30, 1996 to $1,291,331 at September 30, 1997. Amortization of mortgage
servicing rights are influenced by changes in the servicing portfolio, scheduled
loan  amortization,  anticipated  and actual  prepayments  and changes in market
interest rates.

Service fees and other charges to customers  increased by $528,  or 20.8%,  from
$2,539  to  $3,067  during  the  years  ended   September  30,  1996  and  1997,
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  decreased by $173, or 12.66%,  from $1,367 to $1,194
during the years ended September 30, 1996 and 1997,  respectively.  The gains on
the sale of loans  are  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,  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  decreased by $241,  or 2.41%,  from $9,983 to $9,742  during the
years ended  September  30, 1996 and 1997,  respectively.  A decrease in federal
insurance  premiums for the 1997 year more than offset increases in salaries and
related expenses, office supplies and related

                                       15
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


expense,  advertising,  data  processing  and promotion.  Additionally,  $187 of
expense has been  incurred in the 1997 year related to the proposed  merger with
Commercial Federal.

Compensation and employee benefits increased $533, or 11.75%, in 1997 over 1996.
In addition to increases due to normal annual salary  adjustments and employment
of personnel necessary to carry out the business activities of the Savings Bank,
the Bank  charged off the total  remaining  cost of its  Management  Stock Bonus
Plan,  an  additional  expense  of  $348,  which  became  100%  vested  to  plan
participants  upon the signing of the proposed merger  agreement with Commercial
Federal.

Occupancy increased $321 and office supplies expense increased $36, in 1997 over
1996. The Savings Bank opened two new full service branches in 1997.

Data processing costs increased $14 in support of additional  branch  operations
and in response to mortgage banking (including servicing) demands.

Advertising increased $52 in the fiscal year 1997 over fiscal 1996.  Advertising
was increased  primarily to promote the Savings Bank's checking account programs
and two branch openings.

Federal  insurance  premiums  decreased from $1,504 for the year ended September
30, 1996 to $204 for the year ended  September  30, 1997.  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  immediately  charged to
expense  in 1996.  The  normal  rate of  deposit  insurance  premium  assessment
materially declined in 1997 ($204 for 1997 compared to $451 for 1996).

Deposit account  expense,  related  primarily to operation of the Savings Bank's
checking  account  programs,  increased  from $298 in 1996 to $340 in 1997.  The
Savings Bank intends to expand its checking account and deposit account programs
in the future.

Miscellaneous  loan servicing  expense  decreased $101 in 1997 over 1996.  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. The decrease in this expense in 1997
is attributed  to a decrease in the rate of  prepayments  of loans  serviced for
others.  See  footnote  19 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.

For the year ended  September  30, 1997,  operating  expenses  totaled  2.59% of
average assets, a decrease from the 3.4% of average assets recorded for the year
ended September 30, 1996. 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.

                                       16
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


INCOME TAX EXPENSE
------------------
Income tax expense  increased $784 from $1,893 for the year ended  September 30,
1996 to $2,677 for the year ended September 30, 1997. The primary reason for the
increase was a $1,828  increase in pre-tax  income.  The effective  rate for the
year ended September 30, 1996 was 37.7% as compared to 39.1% for 1997.

Asset and Liability Management

Although the Savings Bank's dependence upon net interest income has been greatly
reduced  during the past years as a result of the  increase  in sources of other
income obtained through its mortgage banking operation and purchases of mortgage
servicing rights ("MSR"),  the income from retail  operations and assets held in
portfolio still depends primarily upon it's net interest income.  The ability to
maximize net interest  income is largely  dependent  upon the  achievement  of a
positive  interest  rate spread that can be  sustained  during  fluctuations  in
prevailing  interest  rates.  Interest  rate  sensitivity  is a  measure  of the
difference  between  amounts of  interest-earning  assets  and  interest-bearing
liabilities  which either  reprice or mature within a given period of time.  The
difference,  or the interest rate repricing "gap", provides an indication of the
extent to which an  institution's  interest  rate  spread  will be  affected  by
changes in interest  rates over a period of time. A gap is  considered  positive
when the amount of  interest-rate  sensitive assets maturing or repricing over a
specified  period  of  time  exceeds  the  amount  of  interest-rate   sensitive
liabilities  maturing or repricing within that period and is considered negative
when the amount of  interest-rate  sensitive  liabilities  maturing or repricing
over a specified  period of time exceeds the amount of  interest-rate  sensitive
assets maturing or repricing within that period.  Generally,  during a period of
rising  interest  rates,  a  negative  gap  within a given  period of time would
adversely affect net interest income, while a positive gap within a given period
of time would result in an increase in net interest  income;  during a period of
falling  interest  rates,  a negative  gap  within a given  period of time would
result in an increase in net interest income while a positive gap within a given
period of time would have the  opposite  effect.  At  September  30,  1997,  the
Savings Bank's one year and three year cumulative interest  sensitivity gap as a
percentage  of  total  assets  was  a  negative   12.4%  and  a  negative  7.0%,
respectively.

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 only
for sale in the secondary mortgage market, (ii) maintaining a high percentage of
total assets in short-term  securities and other liquid assets, (iii) increasing
sources of other income,  such as gain on sale of loans and loan servicing fees,
(iv)  increasing  its ARM and  short-term  fixed  rate  loan  portfolio  and (v)
building a loan servicing  portfolio whose market value floats  inversely to the
movement of interest rates. A loan servicing  portfolio becomes more valuable as
the "turnover" in the mortgage loans slows.  Mortgage loans traditionally become
more  seasoned  and  turnover  less as  interest  rates rise.  Therefore,  after
interest rates rise, the value of a loan servicing portfolio generally increases
(assuming  credit  quality is  maintained),  causing the opposite  effect to the
value of the Savings Bank's loans and investments.

                                       17
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


Certain risks are inherent in the business of mortgage banking.  There is a risk
that the Savings Bank will not be able to sell all the loans that it  originates
or purchases or, conversely, that the Savings Bank will be unable to fulfill its
contractual  commitment  to deliver  loans.  In  addition,  in periods of rising
interest rates, loans originated or purchased by the Savings Bank may decline in
value.  Exposure to interest rate risk is significant  during the period between
the  time  the  interest  rate on a  customer's  mortgage  loan  application  is
established  and the time the mortgage  loan closes,  and also during the period
between the time the interest rate is established  and the time the Savings Bank
commits to sell the loan. If interest rates change in an unanticipated  fashion,
the actual percentage of loans that close may differ from projected percentages.
The resultant  mismatching  of  commitments  to close loans and  commitments  to
deliver  sold  loans may have an  adverse  effect on the  profitability  of loan
originations in any such period. A sudden increase in interest rates can cause a
higher percentage of loans to close than projected.  To the degree that this was
not  anticipated,  the Savings Bank will not have made commitments to sell these
additional  loans and may incur  significant  mark to market  losses,  adversely
affecting  results of operations.  In order to minimize  these risks,  it is the
policy of the Savings Bank to cover  approximately  75%-85% of the loans that it
has originated or purchased with sales contracts with third parties.  A mortgage
banker that is unable to fulfill its  commitments  to deliver  mortgage loans to
third  parties will be subject to the payment of fees and monetary  penalties as
well as the loss of business  reputation.  The risk  associated  with failing to
meet delivery  commitments  cannot be eliminated due to the variables created by
changes in market  conditions and other  factors.  Commitments to sell loans are
considered  when assessing the lower of cost or market  valuation of the Savings
Bank's loans held for sale portfolio.

Gap Table

The following table sets forth the amount of the Savings Bank's interest-earning
assets and interest-bearing  liabilities outstanding at September 30, 1997 on an
unconsolidated  basis,  which are  expected  to reprice or mature in each of the
future  time  periods  shown.  The amount of assets or  liabilities  shown which
reprice or mature during a particular  period were determined by the contractual
terms of the asset or  liability.  The table assumes  prepayments  and scheduled
principal amortization of fixed-rate loans and mortgage-related  securities, and
assumes  that  adjustable  rate  mortgage  loans  will  reprice  at  contractual
repricing intervals. No consideration has been provided for the impact of future
commitments and loans in process.


                                       18
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


<TABLE>
<CAPTION>

                                                   Within       Over 1-3       Over 3-5        Over
                                                  One Year       Years           Years        5 Years          Total
                                                   Amount        Amount          Amount        Amount          Amount
                                                   ------        ------        --------      --------         --------
                                                                        (Dollars in Thousands)
<S>                                               <C>           <C>             <C>           <C>             <C>     
     Interest-earning assets:
       Mortgage loans and MRS (1)                 $106,606      $106,269        $17,401       $37,766         $268,042
       Other loans                                   2.588         2,554            967         1,189            7,298
       Investment securities (2)                    46,606         3,000                       52,399          102,005
                                                    ------         -----          -----        ------          -------

          Total interest-earning assets            155,800       111,823         18,368        91,354          377,345
                                                   -------       -------         ------        ------          -------

    Interest-bearing liabilities:
       Non-interest-bearing deposits                 9,692         9,994          3,989         2,651           26,326
       Demand and NOW accounts                       9,826         2,781          1,837         2,993           17,437
       Savings accounts                              6,396           759            548         1,430            9,133
       Money market deposit accounts                 9,216         3,364          1,312           840           14,732
       Certificates of deposit                      97,076        63,201          7,687         1,068          169,032
       FHLB advances                                70,800        10,000         41,000                        121,800
       Other borrowings                              3,059                                                       3,059
                                                     -----         -----          -----         -----            -----

          Total interest-bearing liabilities       206,065        90,099         56,373         8,982          361,519
                                                   -------        ------         ------         -----          -------

    Interest sensitivity gap                       (50,265)       21,724        (38,005)       82,372           15,826
                                                  ========        ======       ========        ======           ======

    Cumulative interest sensitivity gap            (50,265)      (28,541)       (66,546)       15,826           15,826
                                                  ========      ========       ========        ======           ======

    Ratio of interest-earning assets to
      interest-bearing liabilities                    75.6%        124.1%          32.6%      1,017.1%           104.4%
                                                     =====        ======          =====      ========           ======

    Ratio of cumulative gap to total assets         (12.4%)        (7.0%)        (16.4%)          3.9%             3.9%
                                                   =======        ======        =======          ====             ====
</TABLE>
(1)  Includes loans held for sale. Mortgage-related securities are identified as
     "MRS".
(2)  Includes investment securities, FHLB stock and interest-earning deposits in
     banks.

Certain  shortcomings  are  inherent in the method of analysis  presented in the
table above.  For example,  although  certain  assets and  liabilities  may have
similar maturities or periods of repricing,  they may react in different degrees
to changes in market interest  rates.  Also, the interest rates on certain types
of assets and liabilities may fluctuate in advance of changes in market interest
rates,  while  interest  rates on other  types may lag behind  changes in market
rates.  Additionally,  certain assets,  such as adjustable-rate  mortgage loans,
have features  which restrict  changes in interest  rates on a short-term  basis
over the life of the asset. Further, in the event of a change in interest rates,
prepayment  levels  and  decay  rates  on core  deposits  would  likely  deviate
significantly from those assumed in calculating the table.

The  Savings  Bank's  analysis  of its  interest-rate  sensitivity  incorporates
certain   assumptions   concerning   the   amortization   of  loans   and  other
interest-earning  assets and the  repricing  characteristics  of  deposits.  The
Savings Bank has made the following  assumptions in calculating the value on the
above-referenced  table:  adjustable-rate  mortgage loans have prepayment  rates
ranging from 10 to 31%; fixed-rate mortgage loans have a prepayment rate that is
constant  through time but varies from 5% for lower  contractual  interest  rate
loans to 44% for higher 

                                       19
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


contractual  interest rate loans;  consumer loans have prepayment  rates ranging
from 4 to 17%; core savings  deposits have a decreasing  decay rate through time
ranging  from 100%  almost  immediately  to 15% after  one  year;  NOW  checking
deposits  have a  decreasing  decay rate  through  time ranging from 100% almost
immediately to 19% after one year;  and money market  deposits have a decreasing
decay rate through time  ranging  from 91% almost  immediately  to 38% after one
year. The interest-rate sensitivity of the Savings Bank's assets and liabilities
illustrated in the table could vary substantially if different  assumptions were
used or if actual experience differs from the assumptions used.

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

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 are derived
from daily balances.  The following table includes  nonaccruing  loans averaging
$278, $359 and $597, respectively,  for the years ended September 30, 1995, 1996
and 1997 as interest-earning assets at a yield of zero percent.  Interest income
for the  years  ended  September  30,  1995,  1996  and 1997  includes  loan fee
amortization of $371, $168 and $72, respectively.

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

<TABLE>
<CAPTION>
                                                                        Year Ended September 30,
                                                 1995                             1996                            1997
                                  --------------------------------   -------------------------------   -----------------------------
                                  Average               Average       Average              Average      Average              Average
                                  Balance     Interest  Yield/Cost    Balance   Interest  Yield/Cost    Balance  Interest Yield/Cost
                                  -------     --------  ----------    -------   --------  ----------    -------  -------------------
<S>                                 <C>        <C>      <C>          <C>        <C>      <C>           <C>        <C>      <C>  
Interest earning assets:
   Loans receivable                 $129,687   $10,310    7.95%      $151,078   $11,723    7.76%       $208,205   $15,991    7.68%
   Mortgage-related securities        43,430     3,006    6.92%        39,711     2,922    7.36%         34,194     2,538    7.42%
   Investment securities              37,322     2,581    6.92%        73,431     5,250    7.15%        101,690     7,298    7.18%
   Other interest-earning assets       6,042       328    5.43%         5,128       278    5.42%          4,694       220    4.69%
                                    --------   -------  ------       --------   -------   -----        --------   -------  ------
      Total interest-earning 
        assets                       216,481   $16,225    7.49%       269,348   $20,173    7.49%       $348,783   $26,047    7.47%
                                               =======  ======                  =======   =====                   =======  ======
Non-interest-earning assets           18,392                           22,110                            26,698
                                    --------                         --------                          --------
      Total assets                  $234,873                         $291,458                          $375,481
                                    ========                         ========                          ========

Interest-bearing liabilities:
   Passbook savings deposits          $8,710      $239    2.74%        $8,634      $238    2.76%         $8,783      $241    2.74%
   NOW accounts and money
     market demand deposits           40,131       565    1.41%        47,285       756    1.60%         52,936     1,015    1.92%
   Certificates of deposit           123,444     6,697    5.43%       148,922     8,491    5.70%        170,056     9,662    5.68%
   Other interest-bearing 
     liabilities                      23,751     1,503    6.33%        44,809     2,783    6.21%         98,951     5,916    5.98%
                                    --------    ------  ------       --------     -----  ------         ------     -----   ------
      Total interest-bearing 
        liabilities                  196,036    $9,004    4.59%       249,650   $12,268    4.91%        330,726   $16,834    5.09%
                                                ======  ======                  =======  ======                   =======  ======

Non-interest-bearing liabilities       4,216                            5,201                             6,677
                                    --------                         --------                          --------
      Total liabilities              200,252                          254,851                           337,403
Stockholders' equity                  34,621                           36,607                            38,078
                                    --------                         --------                          --------
      Total liabilities and 
        stockholders' equity        $234,873                         $291,458                          $375,481
                                    ========                         ========                          ========
Net interest income                             $7,221                           $7,905                            $9,213
                                                ======                           ======                            ======
Interest rate spread                                      2.90%                            2.58%                             2.38%
                                                        ======                           ======                           =======
Net yield on interest-
  bearing assets                                          3.34%                            2.93%                             2.64%
                                                        ======                           ======                           =======
Ratio of average interest-
  earning assets to average 
  interest-bearing liabilities                          110.43%                          107.89%                           105.46%
                                                        ======                           ======                           =======

</TABLE>

                                       21
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


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 attributed 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>
                                                     1995 vs. 1996                               1996 vs. 1997
                                                   Increase (Decrease)                         Increase (Decrease)
                                                        Due to                                       Due to
                                        -----------------------------------------   -----------------------------------------
                                                               Rate/                                       Rate/
                                         Volume       Rate     Volume       Net      Volume       Rate     Volume       Net
                                         ------       ----     ------       ---      ------       ----     ------       ---
<S>                                     <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>    
Interest income:
   Loans receivable                     $ 1,701    $  (247)   $   (41)   $ 1,413    $ 4,433    $  (119)   $   (46)   $ 4,268
   Mortgage-related securities             (258)       190        (16)       (84)      (406)        26         (4)      (384)
   Investment securities                  2,497         87         85      2,669      2,020         20          8      2,048
   Other interest-earning assets            (50)         0          0        (50)       (24)       (38)         4        (58)
                                        -------    -------    -------    -------    -------    -------    -------    -------
      Total interest-earning assets     $ 3,890    $    30    $    28    $ 3,948    $ 6,023    $  (111)   $   (38)   $ 5,874
                                        =======    =======    =======    =======    =======    =======    =======    =======

Interest expense:
   Passbook savings deposits            $    (2)   $     1    $     0    ($    1)   $     4    $    (1)   $     0    $     3
   NOW accounts and money market
    demand deposits                         100         77         14        191         90        151         18        259
   Certificates of deposit                1,383        341         70      1,794      1,205        (30)        (4)     1,171
   Other interest-bearing liabilities     1,333        (28)       (25)     1,280      3,363       (104)      (126)     3,133
                                        -------    -------    -------    -------    -------    -------    -------    -------
      Total interst-bearing liabilities $ 2,814    $   391    $    59    $ 3,264    $ 4,662    $    16    $  (112)   $ 4,566
                                        =======    =======    =======    =======    =======    =======    =======    =======

Net change in net interest income       $ 1,076    $  (361)   $   (31)   $   684    $ 1,361    $  (127)   $    74    $ 1,308
                                        =======    =======    =======    =======    =======    =======    =======    =======
</TABLE>

                                       22
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


MARKET RISK
-----------
When used or  incorporated  by  reference  in  disclosure  documents,  the words
"anticipate,"  "estimate,"  "expect,"  "project,"  "target,"  "goal" and similar
expressions  are  intended to  identify  forward-looking  statements  within the
meaning of  Section  27A of the  Securities  Act of 1933.  Such  forward-looking
statements  are  subject  to  certain  risks,   uncertainties  and  assumptions,
including  those  set  forth  below.  Should  one or  more  of  these  risks  or
uncertainties  materialize,  or should  underlying  assumptions prove incorrect,
actual results may vary materially from those anticipated,  estimated,  expected
or projected.  These forward-looking statements speak only as of the date of the
document.  The Bancorp  expressly  disclaims any  obligation or  undertaking  to
publicly  release  any updates or  revisions  to any  forward-looking  statement
contained herein to reflect any change in the Bancorp's  expectation with regard
thereto or any change in events,  conditions or  circumstances on which any such
statement is based.

The  Savings  Bank's  Assets  Liability  Management  Committee  ("ALCO"),  which
includes senior  management  representatives,  monitors and considers methods of
managing the rate and sensitivity repricing characteristics of the balance sheet
components  consistent  with  maintaining  acceptable  levels of  changes in net
portfolio  value  ("NPV")  and net  interest  income.  A primary  purpose of the
Savings Bank's asset and liability management is to manage interest rate risk to
effectively  invest the Savings Bank's capital and to preserve the value created
by  its  core  business  operations.  As  such,  certain  management  monitoring
processes are designed to minimize the impact of sudden and sustained changes in
interest rates on NPV and net interest income.

The Savings  Bank's  exposure  to  interest  rate risk is reviewed on at least a
quarterly  basis by the  Board of  Directors  and the ALCO.  Interest  rate risk
exposure is measured using interest rate  sensitivity  analysis to determine the
Savings  Bank's change in NPV in the event of  hypothetical  changes in interest
rates and  interest  rate  sensitivity  gap  analysis is used to  determine  the
repricing  characteristics  of the Bank's assets and  liabilities.  If estimated
changes to NPV and net interest income are not within the limits  established by
the Board, the Board may direct management to adjust its asset and liability mix
to bring interest rate risk within Board-approved limits.

In order to reduce the exposure to interest rate fluctuations,  the Savings Bank
has  developed  strategies  to  manage  its  liquidity,  shorten  its  effective
maturities of certain  interest-earning  assets,  and increase the interest rate
sensitivity  of its asset base.  Management  has sought to decrease  the average
maturity  of its  assets  by  emphasizing  the  origination  of  adjustable-rate
residential  mortgage loans,  consumer loans and adjustable-rate  mortgage loans
for the acquisition,  development,  and construction of residential real estate,
all of which are retained by the Bank for its portfolio. In addition, long-term,
fixed-rate  single-family  residential mortgage loans are underwritten according
to guidelines of the Federal Home Loan Mortgage Corporation  ("FHLMC"),  Federal
Housing Administration ("FHA"), Veterans Administration ("VA"), Guaranteed Rural
Housing Loans ("GRHL") and the Federal National Mortgage  Association  ("FNMA"),
and are either  swapped with the FHLMC,  FNMA,  and GNMA  ("Government  National
Mortgage  Association") in exchange for  mortgage-related  securities secured by
such loans which are then sold directly for cash in the secondary market.

                                       23
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


Interest  rate  sensitivity  analysis  is used to  measure  the  Savings  Bank's
interest rate risk by computing  estimated changes in NPV of its cash flows from
assets,  liabilities  and  off-balance  sheet  items in the  event of a range of
assumed  changes in market  interest  rates.  NPV represents the market value of
portfolio  equity  and is equal to the market  value of assets  minus the market
value of liabilities,  with adjustments made for off-balance  sheet items.  This
analysis  assesses the risk of loss in market risk sensitive  instruments in the
event of a sudden  and  sustained  one  hundred  to four  hundred  basis  points
increase or decrease in the market interest  rates.  The Savings Bank's Board of
Directors  has adopted an interest  rate risk policy which  establishes  maximum
decreases  in the NPV of 15%,  25%,  35% and 45% in the  event of a  sudden  and
sustained  one  hundred to four  hundred  basis  points  increase or decrease in
market interest rates. The following table presents the Savings Bank's projected
change in NPV for the various  rate shock  levels of  September  30,  1997.  All
market risk sensitive  instruments  presented in this table are held to maturity
or available for sale. The Savings Bank has no trading securities.


                                                                  Percent Change
Change in                   Market Value of      Actual                   Board
Interest Rates              Portfolio Equity     Change      Actual       Limit
                            ----------------     ------      ------       -----
                              (Dollars in Thousands)
                              ----------------------
400 basis point rise           $ 38,443        $ (25,503)     (40) %      (45) %
300 basis point rise             45,921          (18,025)     (28)        (35)
200 basis point rise             52,605          (11,341)     (18)        (25)
100 basis point rise             58,953           (4,993)      (8)        (15)
Base Scenario                    63,946               --       --          --
100 basis point decline          65,307            1,361        2          15
200 basis point decline          63,243             (703)      (1)         25
300 basis point decline          63,977               31        0          35
400 basis point decline          66,333            2,387        4          45

The  preceding  table  indicates  that at September  30, 1997, in the event of a
sudden and sustained  increase in prevailing  market interest rates, the Savings
Bank's  NPV  would  normally  decrease,  and that in the  event of a sudden  and
sustained  decrease in prevailing  market interest rates, the Savings Bank's NPV
would normally  increase.  At September 30, 1997,  the Savings Bank's  estimated
changes in NPV were within the targets established by the Board of Directors.

NPV is calculated by the Savings Bank pursuant to guidelines  established by the
OTS. The  calculation is based on the net present value of estimated  discounted
cash flows utilizing market prepayment  assumptions and market rates of interest
provided  by  independent  broker  quotations  and other  public  sources  as of
September 30, 1997, with  adjustments  made to reflect the shift in the Treasury
yield curve as appropriate.

Computation of  prospective  effects of  hypothetical  interest rate changes are
based on numerous  assumptions,  including  relative  levels of market  interest
rates,  loan  prepayments and deposits  decay,  and should not be relied upon as
indicative of actual results.  Further,  the computations do not contemplate any
actions the ALCO could undertake in response to changes in interest rates.

                                       24
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


Certain  shortcomings  are  inherent in the method of analysis  presented in the
computation of NPV. Actual values may differ from those  projections  presented,
should market  conditions vary from  assumptions  used in the calculation of the
NPV. Certain assets,  such as adjustable-rate  loans, which represent one of the
Savings Bank's primary loan  products,  have features which restrict  changes in
interest  rates on a  short-term  basis  and over  the  life of the  assets.  In
addition,  the  proportion  of  adjustable-rate  loans  in  the  Savings  Bank's
portfolio could decrease in future periods if market interest rates remain at or
decrease below current levels due to refinance  activity.  Further, in the event
of a change in interest  rates,  prepayment  and early  withdrawal  levels would
likely deviate significantly from those assumed in the NPV. Finally, the ability
of many borrowers to repay their adjustable-rate  mortgage loans may decrease in
the event of interest rate increases.

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 4 percent.  The
Savings Bank's average liquidity ratio was 9.06% percent during September, 1997.
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-related;  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-related 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-related   securities,   some  of  which  may  also  qualify  as  liquid
investments under current OTS regulations.

The Savings bank has a $68,292 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  $220,000,  the amount of the


                                       25
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


Banks  residential  housing finance  assets.  At September 30, 1997, the Savings
Bank had total FHLB borrowings of $121,800.

Management believes the Savings Bank has sufficient  resources available to meet
its foreseeable  funding  requirements.  At September 30, 1997, the Savings Bank
had  outstanding  loan  commitments  of  $87,584,  and  certificates  of deposit
scheduled to mature within one year of $97,076.

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 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, 1997:

                                                   Percent of
                                  Amount            Adjusted
                                (Thousands)          Assets
                               -------------       ------------
Tangible capital
   Actual amount                 $36,179              8.9%
   Required amount                 6,079              1.5%
                                   -----              ----
      Excess                     $30,100              7.4%
                                 =======              ====
Core capital:
   Actual amount                 $36,179              8.9%
   Required amount                12,158              3.0%
                                  ------              ----
      Excess                     $24,021              5.9%
                                 =======              ====
Risk-based capital:
   Actual amount                 $36,633             22.6%
   Required amount                12,954              8.0%
                                  ------              ----
      Excess                     $23,679             14.6%
                                 =======             =====

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

LEGAL PROCEEDINGS
-----------------
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


                                       26
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


breached  its  contract  with the Bank when  FIRREA was enacted  because  FIRREA
prevented  the  Bank  from  counting   such  assets   toward   minimum   capital
requirements.  As a  result  of  FIRREA,  the  Bank  was  forced  to  write  off
approximately  $7,500,000 in  supervisory  goodwill.  This write off reduced the
Bank's regulatory capital.

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

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

Possible Year 2000 Computer Program Problems

A great deal of  information  has been  disseminated  about the global  computer
crash  that may occur in the year 2000.  Many  computer  programs  that can only
distinguish  the final  two  digits of the year  entered  (a common  programming
practice in earlier years) are expected to read entries for the year 2000 as the
year 1900 and compute payment,  interest or delinquency  based on the wrong date
or are expected to be unable to compute payment, interest or delinquency.  Rapid
and accurate data  processing is essential to the operation of the Savings Bank.
Data processing is also essential to most other financial  institutions and many
other companies.

All of the material computer programs of the Savings Bank that could be affected
by this problem are provided by third party vendors.  The third party vendors of
the Savings  Bank have advised the Savings Bank that they expect to resolve this
potential problem before the year 2000.  However, if the third party vendors are
unable to resolve this potential  problem in time, the Savings Bank would likely
experience  significant  data  processing  delays,  mistakes or failures.  These
delays,  mistakes or failures  could have a  significant  adverse  impact on the
financial condition and results of operation of the Savings Bank.

                                       27

<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY


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

INDEPENDENT AUDITORS' REPORT                                                  29

CONSOLIDATED FINANCIAL STATEMENTS:

        Consolidated Balance Sheets as of September 30, 1996 and 1997      30-31

        Consolidated Statements of Income for the Years Ended
           September 30, 1995, 1996 and 1997                                  32

        Consolidated Statements of Stockholders' Equity for the Years
           Ended September 30, 1995, 1996 and 1997                            33

        Consolidated Statements of Cash Flows for the Years Ended
           September 30, 1995, 1996 and 1997                               34-35

        Notes to Consolidated Financial Statements for the Years Ended
            September 30, 1995, 1996 and 1997                              36-68


                                       28
<PAGE>
            [Deloitte & Touche LLP Letterhead, Kansas City, Missouri]

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, 1996 and
1997, and the related  consolidated  statements of income,  stockholders' equity
and cash flows for each of the three  years in the period  ended  September  30,
1997.  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,
1996 and 1997, and the results of their operations and their cash flows for each
of the three years in the period ended  September  30, 1997 in  conformity  with
generally accepted accounting principles.


As discussed in Note 2 to the consolidated financial statements, on September 2,
1997,  the Company  entered  into a  reorganization  and merger  agreement to be
acquired by another financial institution.


/s/ Deloitte & Touche LLP



November 14, 1997



                                       29



<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1997
(Dollars in thousands, except share amounts)
--------------------------------------------------------------------------------


ASSETS                                                         1996       1997

CASH AND CASH EQUIVALENTS:
  Cash and amounts due from depository institutions         $  1,694   $  1,387
  Interest bearing deposits in other banks                     3,924     15,940
                                                            --------   --------
           Total cash and cash equivalents                     5,618     17,327

INVESTMENT SECURITIES, At cost (Market value of $83,827
  and $79,220)                                                86,235     79,390

CAPITAL STOCK OF FEDERAL HOME LOAN BANK, At cost               4,327      6,675

MORTGAGE-RELATED SECURITIES, At cost (Market value of
  $34,366 and $28,556)                                        34,383     28,124

LOANS HELD FOR SALE (Market value of $13,816 and $14,078)     13,718     13,894

LOANS RECEIVABLE, Net (Less allowance for loan losses
  of $421 and $465)                                          171,158    233,311

PREMISES AND EQUIPMENT, Net                                    6,271      7,222

REAL ESTATE OWNED (Less allowance for losses of
  $34 and $19)                                                    28         41

ACCRUED INTEREST RECEIVABLE:
  Loans receivable                                             1,285      1,594
  Mortgage-related securities                                    262        224
  Investment securities                                        1,197      1,053
                                                            --------   --------
           Total accrued interest receivable                   2,744      2,871

MORTGAGE SERVICING RIGHTS, Net                                12,496     13,615

OTHER ASSETS                                                   3,208      2,792
                                                            --------   --------
TOTAL ASSETS                                                $340,186   $405,262
                                                            ========   ========

                                                                     (Continued)

                                       30

<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1997
(Dollars in thousands, except share amounts)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

<S>                                                              <C>          <C>      
LIABILITIES AND STOCKHOLDERS' EQUITY                                1996         1997

DEPOSITS                                                         $ 214,493    $ 236,333

ADVANCE PAYMENTS BY BORROWERS FOR TAXES
  AND INSURANCE                                                      1,805        2,066

DEFERRED INCOME TAXES                                                  698        1,042

ACCRUED AND OTHER LIABILITIES                                        4,683        4,039

ADVANCES FROM FEDERAL HOME LOAN BANK                                81,700      121,800
                                                                 ---------    ---------
           Total liabilities                                       303,379      365,280

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 and 2,251,953 shares issued                              225          225
  Additional paid-in capital                                        21,663       22,209
  Unearned compensation - Employee Stock Ownership Plan             (1,054)        (918)
  Unearned compensation - Management Stock Bonus Plan                 (547)
  Retained earnings, substantially restricted                       20,424       23,851
                                                                 ---------    ---------
                                                                    40,711       45,367

  Treasury stock, 231,500 and 290,000 shares, at cost               (3,904)      (5,385)
                                                                 ---------    ---------
           Total stockholders' equity                               36,807       39,982
                                                                 ---------    ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $ 340,186    $ 405,262
                                                                 =========    =========
</TABLE>


See notes to consolidated financial statements.                      (Concluded)

                                       31

<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(Dollars in thousands, except share amounts)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                     1995        1996        1997
<S>                                                                <C>         <C>         <C>     
INTEREST INCOME:
  Loans receivable                                                 $ 10,310    $ 11,723    $ 15,991
  Mortgage-related securities                                         3,006       2,922       2,538
  Investment securities                                               2,581       5,250       7,298
  Other interest - cash and cash equivalents                            328         278         220
                                                                   --------    --------    --------
          Total interest income                                      16,225      20,173      26,047
                                                                   --------    --------    --------
INTEREST EXPENSE:
  Deposits                                                            7,501       9,485      10,918
  Advances from Federal Home Loan Bank                                1,503       2,783       5,916
                                                                   --------    --------    --------
          Total interest expense                                      9,004      12,268      16,834
                                                                   --------    --------    --------
NET INTEREST INCOME                                                   7,221       7,905       9,213

PROVISION FOR LOAN LOSSES                                               224          75         143
                                                                   --------    --------    --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                   6,997       7,830       9,070
                                                                   --------    --------    --------
OTHER INCOME:
  Loan servicing fees                                                 4,407       4,779       4,841
  Amortization of mortgage servicing rights                          (1,305)     (1,651)     (1,742)
  Gain on sale of mortgage servicing rights                           1,961
  Service fees and other charges to customers                         1,846       2,539       3,067
  Gain on sale of loans held for sale, net                              706       1,367       1,194
  Insurance commissions                                                 100          54          73
  Other                                                                  39          84          86
                                                                   --------    --------    --------
          Total other income                                          7,754       7,172       7,519
                                                                   --------    --------    --------
OTHER EXPENSES:
  Salaries and employee benefits                                      4,245       4,536       5,069
  Occupancy of premises                                                 866         844       1,165
  Office supplies and related expenses                                  529         643         679
  Data processing                                                       455         590         604
  Advertising and promotions                                            414         448         500
  Federal insurance premiums                                            351       1,504         204
  Professional services                                                 313         272         244
  Provision for losses on real estate owned                              81          18          10
  Amortization of excess cost over fair value of assets acquired         78          60          22
  Deposit accounts                                                      227         298         340
  Loan servicing                                                        193         342         241
  Other                                                                 450         428         664
                                                                   --------    --------    --------
          Total other expenses                                        8,202       9,983       9,742
                                                                   --------    --------    --------
INCOME BEFORE INCOME TAX EXPENSE                                      6,549       5,019       6,847

INCOME TAX EXPENSE                                                    2,443       1,893       2,677
                                                                   --------    --------    --------
NET INCOME                                                         $  4,106    $  3,126    $  4,170
                                                                   ========    ========    ========

EARNINGS PER SHARE                                                 $   1.97    $   1.59    $   2.15
                                                                   ========    ========    ========
</TABLE>


See notes to consolidated financial statements.


                                       32
<PAGE>



MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(Dollars in thousands, except share amounts)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                             Unearned       Unearned
                                                           Compensation - Compensation -
                                                              Employee      Management     Retained
                                                Additional     Stock          Stock        Earnings,                      Total
                                 Common Stock    Paid-In     Ownership        Bonus      Substantially Treasury Stock  Stockholders'
                                Shares   Amount  Capital       Plan           Plan        Restricted    Shares  Amount   Equity
                                                                                                                           
<S>                            <C>        <C>    <C>        <C>            <C>             <C>         <C>      <C>         <C>   
BALANCE, October 1, 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

  Acquisition of Treasury 
    Stock                                                                                                58,500   (1,481)   (1,481)

  Exercise of stock 
    options                        3,703               43                                                                       43

  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                                    225                                                                      225

  Amortization of unearned
    compensation - Management 
    Stock Bonus Plan                                                          547                                              547

  Income tax benefit upon 
    vesting of  Management 
    Stock Bonus Plan                                 278                                                                      278

  Dividends on common stock to 
    stockholders                                                                               (743)                          (743)
                                                                                                                           
Net income                                                                                    4,170                          4,170 
                               ---------  -----  --------   --------        ------         --------     ------- --------   -------
BALANCE, September 30, 1997    2,251,953  $ 225  $ 22,209     $ (918)       $              $ 23,851     290,000   (5,385)  $39,982 
                               =========  =====  ========     ======        ======         ========     ======= ========   ======= 

</TABLE>

See notes to consolidated financial statements.



                                       33

<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(Dollars in thousands, except share amounts)
-------------------------------------------------------------------------------------------------------------
                                                                                                                                
                                                                            1995       1996         1997                
<S>                                                                     <C>          <C>          <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                            $   4,106    $   3,126    $   4,170  
  Adjustments to reconcile net income to net cash                               
    provided by (used in) operating activities:                                
    Common stock committed to be released for allocation -                   
      Employee Stock Ownership Plan                                           122          136          136  
    Increase in fair market value of Employee Stock Ownership                   
      Plan shares committed to be released for allocation                      49          110          225  
    Amortization of unearned compensation - Management                         
      Stock Bonus Plan                                                        249          199          547  
    Stock dividend on capital stock of Federal Home Loan Bank                             (172)        (365)          
    Accretion of premiums and discounts on mortgage-                             
      related securities and investment securities, net                      (134)        (155)        (147) 
    Provision for loan losses                                                 224           75          143  
    Provision for losses on real estate owned                                  81           18           10  
    Net loan origination fees capitalized                                     380        1,602          899  
    Amortization of net deferred loan origination fees                       (371)        (168)         (72) 
    Amortization of mortgage servicing rights                               1,305        1,651        1,742  
    Impairment of mortgage servicing rights                                                              10
    Amortization of excess of cost over fair value of assets acquired          78           60           22  
    Gain on sale of real estate owned, net                                     (7)         (34)         (34) 
    Depreciation and amortization on premises and equipment                   393          344          516  
    Gain on sale of premises and equipment                                    (12)           
    Gain on sale of loans held for sale, net                                 (706)      (1,367)      (1,194) 
    Origination/purchase of loans held for sale                          (107,341)    (195,873)    (214,177) 
    Proceeds from sale of loans held for sale                              91,466      205,630      215,195  
    Gain on sale of mortgage servicing rights                              (1,961)          
    Provision (benefit) for deferred income taxes                            (225)         530          344  
    Changes in:                                                                
      Accrued interest receivable                                            (935)        (525)        (127) 
      Other assets                                                            (27)        (698)         394  
      Income taxes payable                                                    607          (77)         
      Accrued and other liabilities                                         1,091        2,028         (638) 
                                                                        ---------    ---------    ---------  
            Net cash provided by (used in) operating activities           (11,568)      16,440        7,599  
                                                                        ---------    ---------    ---------  
                                                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                         
  Proceeds from maturities or call of investment securities                10,100       29,000       48,860  
  Purchases of investment securities                                      (42,000)     (62,753)     (43,820) 
  Principal collected on mortgage-related securities                        4,985        6,746        6,228  
  Purchases of mortgage-related securities                                              (1,158)         
  Loan originations net of principal collected on loans receivable        (23,171)     (48,069)     (63,420) 
  Proceeds from sales of premises and equipment                               117        
  Acquisitions of mortgage servicing rights, net                           (8,423)      (2,522)      (2,871) 
  Proceeds from sales of mortgage servicing rights                          3,766        
  Purchases of premises and equipment                                      (1,416)      (1,858)      (1,468) 
  Proceeds from sales of real estate owned                                    170          374          308  
                                                                        ---------    ---------    ---------  
            Net cash used in investing activities                         (55,872)     (80,240)     (56,183) 
                                                                        ---------    ---------    ---------  
</TABLE>

                                                                   
                                                                     (Continued)


                                       34

<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(Dollars in thousands, except share amounts)
--------------------------------------------------------------------------------------------------------
                                                                     1995         1996         1997

<S>                                                                <C>          <C>          <C>      
CASH FLOWS FROM FINANCING ACTIVITIES:
  Receipts for deposits, net                                       $  40,952    $  18,779    $  21,839
  Increase (decrease) in advance payments
   by borrowers for taxes and insurance, net                             126         (225)         261
  Proceeds from advances from Federal Home Loan Bank                  96,600      199,500      325,680
  Repayments on advances from Federal Home Loan Bank                 (72,600)    (150,800)    (285,580)
  Acquisition of common stock for Management Stock Bonus Plan           (995)
  Acquisition of treasury stock                                       (1,174)      (2,730)      (1,481)
  Cash dividends on common stock to stockholders                        (615)        (783)        (747)
  Issuance of common stock for exercise of stock options                                            43
  Income tax benefit upon vesting of Management Stock Bonus Plan                                   278
                                                                   ---------    ---------    ---------
           Net cash provided by financing activities                  62,294       63,741       60,293
                                                                   ---------    ---------    ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  (5,146)         (59)      11,709

CASH AND CASH EQUIVALENTS:
  Beginning of year                                                   10,823        5,677        5,618
                                                                   ---------    ---------    ---------
  End of year                                                      $   5,677    $   5,618    $  17,327
                                                                   =========    =========    =========

SUPPLEMENTAL DISCLOSURES OF
  CASH FLOW INFORMATION:
  Income tax payments, net of refunds                              $   1,708    $   2,424    $   2,029
                                                                   =========    =========    =========

  Interest payments, including interest credited to deposits
    of approximately $7,218, $9,434 and $9,969                     $   8,758    $  12,287    $  16,443
                                                                   =========    =========    =========


SUPPLEMENTAL DISCLOSURES OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:
  Loans transferred to real estate owned                           $     386    $     238    $     296
                                                                   =========    =========    =========

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

  Accrued dividends on common stock                                $     204    $     190    $     186
                                                                   =========    =========    =========

</TABLE>

See notes to consolidated financial statements.                      (Concluded)

                                       35

<PAGE>


MID CONTINENT BANCSHARES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(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.

        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.  At September 30, 1997 approximately $8,949,000
        of the equity of the Savings  Bank was  available  for  distribution  as
        dividends to the parent  company  without  reducing  regulatory  capital
        below required levels.

2.      REORGANIZATION AND MERGER AGREEMENT

        On September 2, 1997,  the Company  entered  into a  Reorganization  and
        Merger Agreement ("the agreement") to be acquired by Commercial  Federal
        Corporation  ("Commercial  Federal").  Under the terms of the agreement,
        Commercial Federal will acquire through a tax-free reorganization all of
        the  outstanding  shares of the  Company's  common stock in exchange for
        Commercial Federal's common stock. The exchange ratio will be determined
        based upon the average  closing  price of  Commercial  

                                       36

<PAGE>

        Federal's  common stock during a twenty  consecutive  trading day period
        prior  to  closing.  Based  on  Commercial  Federal's  closing  price on
        September 2, 1997,  the Company's  shareholders  would  receive  1.30395
        shares  of  Commercial  Federal's  common  stock  for each  share of the
        Company's  outstanding  common  stock.  The  acquisition  is  subject to
        regulatory  approvals,  the Company's  shareholders'  approval and other
        conditions  and is  expected  to close in the second  fiscal  quarter of
        1998.  The  accompanying   financial   statements  do  not  include  any
        adjustments giving effect to the agreement.

3.      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.  

        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 market value 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 market
        value 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 

                                       37

<PAGE>


        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 an allowance 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.

        Provision  for Loan Losses - SFAS No. 114  "Accounting  by Creditors for
        Impairment  of a Loan,"  requires the Savings  Bank to measure  impaired
        loans  based on 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.  One to four  family  residential  loans  and
        consumer  loans are  collectively  evaluated  for  impairment.  Loans on
        residential  properties  with  greater  than  four  units  and  loans on
        business  properties  are  evaluated  for  impairment  on a loan by loan
        basis.  The  provision  for loan losses also  includes an amount  which,
        based on  management's  estimate,  is  necessary  to establish a general
        valuation  allowance  sufficient to absorb possible credit losses within
        the Savings Bank's loan  portfolio.  These  provisions are made based on
        the results of continuing  reviews by management of the loan  portfolio,
        which includes analysis of borrower's financial data and assessment of a
        borrower's ability to continue to meet its obligations.  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




                                       38
<PAGE>

        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 less
        selling costs 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.
        
        Other  Assets - Included in other assets is the excess of cost over fair
        value of assets  acquired,  which is  amortized  using a  straight  line
        method   over   the   estimated   remaining   life   of  the   long-term
        interest-bearing  assets acquired. The excess of cost over fair value of
        assets  acquired  is $22 as of  September  30,  1996 and has been  fully
        amortized as of September 30, 1997.

        Mortgage  Servicing  Rights - The  Savings  Bank  adopted  Statement  of
        Financial   Accounting   Standards  ("SFAS")  No.  125,  Accounting  for
        Transfers  and  Servicing of  Financial  Assets and  Extinguishments  of
        Liabilities,  effective for the year ended  September 30, 1997. For each
        servicing  contract  in  existence  before  January 1, 1997,  previously
        recognized   originated  and  purchased  servicing  rights  and  "excess
        servicing"  receivables are 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
        interest, 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 implementation of
        this  Statement  did not  have a  material  impact  on the  consolidated
        financial statements.

        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.  Purchased  mortgage  servicing
        rights are acquired from  independent  third-party  originators  and are
        recorded at the lower of cost or fair value.  These 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
        125, 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
        1995 and  1996,  there  were no  write  downs  or  valuation  allowances
        established  for  capitalized  servicing.  A write  down  and  valuation
        allowance of $10 was established at September 30, 1997. 

                                       39

<PAGE>



        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.

        In years prior to September 30, 1997, thrift institutions were 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 September 30, 1997 includes
        approximately  $2,071  representing such bad debt reserve as of the base
        year for which no deferred income taxes have been provided.

        The Small  Business Job  Protection  Act of 1996 (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.  The  Savings  Bank  must  recapture  excess  reserves
        beginning with the year ended  September 30, 1997.  Thrift  institutions
        will be  permitted to delay the timing of this  recapture  for up to two
        years depending upon whether they meet certain residential loan tests. A
        deferred  tax  liability  has been  provided  on the  amount of bad debt
        reserve  that  exceeds  the base year  reserve.  

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

        Earnings Per Share - Common  equivalent  shares include shares  issuable
        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  are 2,087,668;  1,962,849 and 1,938,765 as of September 30,
        1995, 1996 and 1997.

        Regulatory   Compliance  -  The  Savings  Bank  is  subject  to  various
        regulatory  capital  requirements  administered  by the federal  banking
        agencies.  Failure to meet  minimum  capital  requirements  can initiate
        certain mandatory - and possibly  additional  discretionary - actions by
        regulators  that, if undertaken,  could have a direct material effect on
        the Company's  financial  statements.  Under capital adequacy guidelines
        and the regulatory  framework for prompt corrective  action, the Savings
        Bank must meet specific  capital  guidelines  that involve  quantitative
        measures  of  the  Savings  Bank's  assets,  liabilities,   and  certain
        off-balance-sheet   items  as  calculated  under  regulatory  accounting
        practices.  The 

                                       40

<PAGE>


        Savings Bank's capital  amounts and  classification  are also subject to
        qualitative   judgments  by  the  regulators  about   components,   risk
        weightings,  and other  factors. 

        Quantitative measures that have been established by regulation to ensure
        capital  adequacy  require the Savings Bank to maintain  minimum capital
        amounts and ratios (set forth in the table  below).  The Savings  Bank's
        primary  regulatory  agency,  the OTS,  requires  that the Savings  Bank
        maintain   minimum  ratios  of  tangible  capital  (as  defined  in  the
        regulations)  of 1.5%,  core  capital  (as  defined)  of 3%,  and  total
        risk-based  capital (as defined) of 8%. The Savings Bank is also subject
        to prompt corrective action capital requirement regulations set forth by
        the Federal Deposit Insurance  Corporation  ("FDIC").  The FDIC requires
        the  Savings  Bank to maintain a minimum of total and Tier 1 capital (as
        defined in the regulations) to risk-weighted assets (as defined), and of
        Tier 1 capital (as defined) to average  assets (as defined).  Management
        believes,  as of  September  30,  1997,  that the Savings Bank meets all
        capital adequacy requirements to which it is subject.

        As of September 30, 1997 and 1996, the most recent notification from the
        OTS  categorized  the  Savings  Bank as  "well  capitalized"  under  the
        regulatory  framework for prompt corrective action. To be categorized as
        "well   capitalized"  the  Savings  Bank  must  maintain  minimum  total
        risk-based,  Tier 1 risk-based,  Tier 1 leverage  ratios as set forth in
        the table.  There are no  conditions  or events since that  notification
        that management believes have changed the institution's category.

<TABLE>
<CAPTION>
                                                                         To Be Categorized as
                                                                          "Well Capitalized"
                                                                             Under Prompt
                                                         For Capital       Corrective Action
                                          Actual       Adequacy Purposes      Provisions
                                      -------------- ------------------- ---------------------
                                      Amount   Ratio     Amount   Ratio     Amount   Ratio
                                      ------  ------ ----------- ------- ---------- ----------
        
<S>                                   <C>       <C>      <C>       <C>      <C>     <C>         
        As of September 30, 1997:
        Tangible capital
          (to total assets)           $36,179   8.9 %    $ 6,079   1.5 %       N/A   N/A
        Core capital
          (to total assets)            36,179   8.9 %     12,158   3.0 %       N/A   N/A
        Total risk-based capital
          (to risk weighted assets)    36,633   22.6 %    12,954   8.0 %    22,480   10.0 %
        Tier I risk-based capital
          (to risk weighted assets)    36,179   16.1 %       N/A   N/A      13,488   6.0 %
        Tier I leverage capital
          (to average assets)          36,179   9.6 %        N/A   N/A      18,774   5.0 %
        
</TABLE>
        
        
                                       41
        
<PAGE>
        
<TABLE>
<CAPTION>
                                                                         To Be Categorized as
                                                                          "Well Capitalized"
                                                                             Under Prompt
                                                          For Capital      Corrective Action
                                           Actual       Adequacy Purposes     Provisions
                                      ---------------- ------------------ -------------------
                                       Amount   Ratio     Amount  Ratio     Amount   Ratio
                                      -------- ------- ---------- ------- --------- ---------
        
<S>                                   <C>       <C>      <C>       <C>      <C>      <C>
        As of September 30, 1996:
        Tangible capital
          (to total assets)           $31,827   9.3 %    $ 5,122   1.5 %       N/A   N/A
        Core capital
          (to total assets)            31,827   9.3 %     10,244   3.0 %       N/A   N/A
        Total risk-based capital
          (to risk weighted assets)    32,281   24.5 %    10,551   8.0 %    17,703   10.0 %
        Tier I risk-based capital
          (to risk weighted assets)    31,827   24.1 %       N/A   N/A      10,622   6.0 %
        Tier I leverage capital
          (to average assets)          31,827   10.9 %       N/A   N/A      14,573   5.0 %
        
</TABLE>
        
        
        
        A  reconciliation  of the  Savings  Bank's  stockholders'  equity  under
        generally accepted  accounting  principles to regulatory capital amounts
        as of September 30, 1997 is as follows:
        
<TABLE>
<CAPTION>

<S>                                                                                           <C>    
          Stockholders' equity, core and tangible capital - as reported by the Savings Bank   $36,179
          General loan loss reserves                                                              454
                                                                                              -------
          
          Risk-based capital                                                                  $36,633
                                                                                              =======
</TABLE>


        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,  1995,  1996 and 1997 and the reported
        amounts  of  revenues  and   expenses   during  the  years  then  ended.
        Significant  estimates include loan loss and real estate owned reserves,
        valuation  of  mortgage  servicing  rights and fair  value of  financial
        instruments.  Actual  results  could  differ from those  estimates. 

        New Statements of Financial Accounting Standards - In February 1997, the
        FASB issued SFAS No. 128, Earnings per Share. The Statement  establishes
        standards for computing and presenting  earnings per share  ("EPS").  It
        replaces the  presentation  of primary EPS with a presentation  of basic
        EPS. The Statement is effective for the Company's  financial  statements
        as of September 30, 1998. The Company's earnings per share under the new
        standard are not materially  different  from that reported.  

        In  February  1997,  the  FASB  issued  SFAS  No.  129,   Disclosure  of
        Information about Capital Structure. The Statement establishes standards
        for disclosing  information  about an entity's  capital  structure.  The
        Statement is effective  for the  Company's  financial  statements  as of
        September  30,  1998.   The  Company  does  not   anticipate   that  the
        implementation  of this  Statement  will have a  material  impact on the
        consolidated  financial  statements.  

        In June 1997, FASB issued SFAS No. 130, Reporting  Comprehensive Income.
        The  Statement  establishes  standards  for  reporting  and  display  of
        comprehensive income and its components (revenues,  expenses,  gains and
        losses)  in a full set of  general-purpose  financial  statements.  This
        Statement  requires  
                                       42

<PAGE>

        that all items  that are  required  to be  recognized  under  accounting
        standards  as  components  of  comprehensive  income  be  reported  in a
        financial  statement that is displayed with the same prominence as other
        financial  statements.  This  Statement  requires  that the  Company (a)
        classify  items of other  comprehensive  income  by  their  nature  in a
        financial  statement  and (b) display the  accumulated  balance of other
        comprehensive  income  separately from retained  earnings and additional
        paid-in  capital  in the  equity  section of a  statement  of  financial
        position.  The  Statement  is  effective  for  the  Company's  financial
        statements  as of September  30, 1999.  The Company does not  anticipate
        that the implementation of this Statement will have a material impact on
        the consolidated financial statements.

        In June 1997, FASB issued SFAS No. 131, Disclosures about Segments of an
        Enterprise and Related Information.  The Statement establishes standards
        for the way that public business  enterprises  report  information about
        operating  segments in annual  financial  statements  and requires  that
        those enterprises  report selected  information about operating segments
        in interim financial reports issued to shareholders. It also establishes
        standards  for  related   disclosures   about   products  and  services,
        geographic  areas, and major  customers.  The Statement is effective for
        the Company's financial statements as of September 30, 1999. The Company
        anticipates  that  the  implementation  of this  Statement  may  require
        additional  disclosures. 

        Reclassifications - Certain reclassifications have been made to the 1995
        and 1996 consolidated  financial statements in order to conform with the
        1997 presentation.

4.      INVESTMENT SECURITIES

<TABLE>
<CAPTION>
                                                                   September 30, 1996
                                                ---------------------------------------------------------
                                                                  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 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>
                
                
                
                                       43
                
<PAGE>

<TABLE>
<CAPTION>
                                                                 September 30, 1997
                                               ----------------------------------------------------
                                                                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 within one year    $ 8,455       $     5       $   161       $ 8,299
          Securities maturing after one year                                             
            through five years                     4,996                          87         4,909     
          Securities maturing after five years                                           
            through ten years                     27,605           173            83        27,695
          Securities maturing after ten years     38,334            30            47        38,317
                                                 -------       -------       -------       -------
                                                 $79,390       $   208       $   378       $79,220
                                                 =======       =======       =======       =======
</TABLE>
        
        
        As of  September  30,  1996 and 1997,  the  Savings  Bank held  callable
        securities  with  aggregate  carrying  values of  $76,801  and  $70,830,
        respectively.  The securities  bear interest at rates ranging from 4.98%
        to 8.5% with stated maturity dates ranging from 1997 to 2011.

        Certain  investment  securities  have been  pledged  as  collateral  for
        deposits and advances  from the Federal Home Loan Bank (See Notes 12 and
        14).

5.      MORTGAGE-RELATED SECURITIES

<TABLE>
<CAPTION>

                                                                  September 30, 1996
                                                     ----------------------------------------------
                                                                  Gross       Gross       Estimated
                                                     Amortized  Unrealized  Unrealized      Market
                                                        Cost      Gains       Losses        Value
                                                                                     
<S>                                                   <C>         <C>         <C>          <C>    
        Pass-through certificates - fixed rate:
          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
          Mortgage Guarantee Insurance Corporation          59         3                        62
        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       2,077                      5        2,072
                                                      --------    ------      -------      ------- 
                                                      $ 34,383    $  377      $   394      $34,366 
                                                      ========    ======      =======      ======= 
</TABLE>
        
        
                                       44
        
<PAGE>

<TABLE>
<CAPTION>
                                                                   September 30, 1997
                                                      ---------------------------------------------
                                                                    Gross       Gross     Estimated
                                                      Amortized   Unrealized  Unrealized    Market
                                                        Cost        Gains       Losses      Value
                                                                                                  
<S>                                                    <C>         <C>         <C>         <C>    
        Pass-through certificates - fixed rate:
          Government National Mortgage Association     $ 5,569     $   303                 $ 5,872
          Federal National Mortgage Association            345          18     $     1         362
          Federal Home Loan Mortgage Corporation         7,742         172          18       7,896
          Mortgage Guarantee Insurance Corporation          12           1                      13    
        Pass-through certificates - adjustable rate:                                      
          Government National Mortgage Association       4,302          77                   4,379    
          Federal National Mortgage Association          2,352                      54       2,298    
          Federal Home Loan Mortgage Corporation         5,865                      62       5,803    
          Mortgage Guarantee Insurance Corporation       1,937                       4       1,933    
                                                       -------     -------     -------     -------
                                                       $28,124     $   571     $   139     $28,556
                                                       =======     =======     =======     =======
</TABLE>
        
        
        Certain mortgage-related  securities have been pledged as collateral for
        deposits and advances  from the Federal Home Loan Bank (See Notes 12 and
        14).

6.      LOANS RECEIVABLE

<TABLE>
<CAPTION>

                                                      1996         1997
        
<S>                                                 <C>          <C>      
        First mortgage loans:
          Residential - one-to-four units           $ 157,494    $ 217,152
          Secured by other properties                   1,013          857
          Construction loans                           17,367       17,534
                                                    ---------    ---------
                   Total first mortgage loans         175,874      235,543
                                                    ---------    ---------
        Other installment loans:
          Property improvements, auto and other         5,195        6,375
          Mobile home                                     305          128
          Deposits                                        769          795
                                                    ---------    ---------
                   Total installment loans              6,269        7,298
                                                    ---------    ---------
                   Total loans                        182,143      242,841
        
        Less:
          Unearned loan fees and deferred costs           511          255
          Unamortized premiums on loans purchased        (354)        (737)
          Undisbursed loan funds                       10,407        9,547
          Allowance for loan losses                       421          465
                                                    ---------    ---------
                                                    $ 171,158    $ 233,311
                                                    =========    =========
</TABLE>


                                       45

<PAGE>



        There were no  commercial  real estate or business  loans  purchased  or
        originated  during  1995,  1996 or 1997.  The  Savings  Bank has lending
        activities primarily in the State of Kansas.

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

<S>     <C>                           <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>


<TABLE>
<CAPTION>
                                                     September 30, 1997
        ----------------------------------------------------------------------------------------------------------
                            Fixed Rate                                               Adjustable Rate
        -----------------------------------------------                 ------------------------------------------       
          Term to                                                       Term to Rate
          Maturity                          Book Value                   Adjustment                    Book Value
        
<S>     <C>                                 <C>                         <C>                             <C>      
        1 mo. - 1  yr.                      $ 18,296                    1 mo. - 1 yr.                   $  55,765
        1 yr. - 3 yrs.                         2,119                    1 yr. - 3 yrs.                     66,989
        3 yrs. - 5 yrs.                        2,994                    3 yrs. - 5 yrs.                    21,098
        5 yrs. - 10 yrs.                       5,843                    5 yrs - 10 yrs.                     1,091
        10 yrs. - 20 yrs.                     49,450
        Over 20 years                         19,196 
                                            --------                                                    ---------
        
                                            $ 97,898                                                    $ 144,943 
                                            ========                                                    ========= 
</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, 1997,  the
        Savings Bank is in  compliance  with this  limitation.  


                                       46

<PAGE>



        A  summary  of the  activity  in the  allowance  for loan  losses  is as
        follows:


                                                 1995     1996     1997
        
        Balance, beginning of year               $ 275    $ 423    $ 421
        
          Provision charged to expense             224       75      143
          Losses charged against the allowance     (80)     (90)    (117)
          Recoveries                                 4       13       18
                                                 -----    -----    -----
        
          Balance, end of year                   $ 423    $ 421    $ 465
                                                 =====    =====    =====


        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,
        1995,  1996 and 1997. No loans were  considered  impaired under SFAS No.
        114 during the years ended September 30, 1995, 1996 and 1997. 

        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, 1996 and 1997.
        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, 1996 and 1997, loans totaling approximately $484 and
        $932,  respectively,  were on nonaccrual  status.  Gross interest income
        would have  increased  by $45 and $79 for the year ended  September  30,
        1996 and 1997,  respectively,  for nonaccrual  status loans

7.      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:


                                         1995         1996         1997
        
        Government National
          Mortgage Association        $  902,977   $  875,381   $  854,467
        Federal National
          Mortgage Association           132,209      115,492      100,778
        Federal Home
          Loan Mortgage Corporation      146,624      231,515      330,225
        Other investors                    8,082        6,765        5,861
                                      ----------   ----------   ----------
        
                                      $1,189,892   $1,229,153   $1,291,331
                                      ==========   ==========   ==========
        
        
        
        
                                       47
        
<PAGE>


        The Savings Bank  services  loans in 16 states.  The five largest  state
        concentrations,  based on unpaid  principal  balances,  are as  follows:
        Kansas (53.0%), Oklahoma (23.1%), Louisiana (8.0%), Michigan (8.3%), and
        Illinois (3.5%),  aggregating  approximately 95.9% 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.  

        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 obligations to repurchase 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 $19,169,  $16,917 and $19,870 as of September 30,
        1995,  1996 and 1997,  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  $1,995  and $1,741 as of
        September  30, 1996 and 1997,  respectively,  and are  included in other
        assets in the accompanying consolidated balance sheets.

8.      LOANS HELD FOR SALE

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


                                                1996         1997
        
        Loans held for sale                    $ 13,787    $ 13,964
        Deferred net discounts, premiums and
          other related costs                       (69)        (70)
                                               --------    --------
        
        Loans held for sale, net               $ 13,718    $ 13,894
                                               ========    ========




                                       48

<PAGE>

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


                                       1995       1996       1997
        
        Gross realized gains          $   794    $ 1,651    $ 1,232
        Gross realized losses             (88)      (284)       (38)
                                      -------    -------    -------
        
        Gains on sale of loans, net   $   706    $ 1,367    $ 1,194
                                      =======    =======    =======


9.      PREMISES AND EQUIPMENT

                                              1996        1997
        
        Land                                $  2,099    $  2,099
        Building and improvements              4,555       5,622
        Furniture, fixtures and equipment      2,980       3,219
        Automobiles                               38          38
                                             -------     ------- 
                                               9,672      10,978
        Less accumulated depreciation         (3,401)     (3,756)
                                             -------     ------- 
                                             $ 6,271     $ 7,222 
                                             =======     ======= 

10.     REAL ESTATE OWNED

                                                        1996    1997
        
        Real estate owned (acquired by foreclosure or
          by deed in lieu of foreclosure)               $ 62    $ 60
        Less allowance for losses                        (34)    (19)
                                                        ----    ----

                                                        $ 28    $ 41
                                                        ====    ====
                

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

                                                 1995    1996    1997
        
        Balance, beginning of year               $ 16    $ 51    $ 34
        
          Provision charged to expense             81      18      10
          Losses charged against the allowance    (47)    (35)    (25)
          Recoveries                                1
                                                 ----    ----    ----

        Balance, end of year                     $ 51    $ 34    $ 19
                                                 ====    ====    ====


                                       49

<PAGE>


11.     MORTGAGE SERVICING RIGHTS

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


                                                  1995       1996     1997
        
        Balance, beginning of year               $ 6,312   $11,625   $12,496
        
        Additions:
          Purchased mortgage servicing rights      8,107     1,970     2,235
          Originated mortgage servicing rights       322       589       661
                                                 -------   -------   -------
                                                   8,429     2,559     2,896
        
        Reductions:
          Amortization                             1,305     1,651     1,742
          Bulk sales                               1,805
          Servicing released sales                     6        37        25
          Impairment loss                                                 10
                                                 -------   -------   -------
                                                   3,116     1,688     1,777
                                                 -------   -------   -------

        Balance, end of year                     $11,625   $12,496   $13,615
                                                 =======   =======   =======
        
        
        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. No such sales occurred in 1996 or 1997.
        
        
        
        
        
                                       50
        
<PAGE>


12.     DEPOSITS

<TABLE>
<CAPTION>
                                                                   1996                            1997
                                                          -------------------------       -----------------------
                                                            Amount        Percent           Amount       Percent
        
<S>                                                        <C>             <C>             <C>             <C>  
        Passbook and checking accounts:
          Demand and NOW accounts, including
            noninterest bearing deposits of
            approximately $22,384 and
            $26,326 as of September 30,
            1996 and 1997 (rate, excluding
            noninterest bearing deposits, of 2.6%
            as of September 30, 1996 and 1997)             $ 36,785        17.1%           $ 43,463        18.4%
          Money market accounts (rate of 2.65%
            as of September 30, 1996 and 1997)               12,387         5.8              14,732         6.2
        Passbook savings accounts (rate of 2.75%
          as of September 30, 1996 and 1997)                  8,690         4.1               9,106         3.9 
                                                          ---------        ----            --------        ---- 
        Total passbook and checking accounts                 57,862        27.0              67,301        28.5 
                                                          ---------        ----            --------        ---- 
       
        Certificate accounts:
          2.00% to   3.00%                                       12                               4
          3.01% to   4.00%
          4.01% to   5.00%                                    6,134         2.9               2,278         1.0
          5.01% to   6.00%                                  106,577        49.7             142,341        60.2
          6.01% to   7.00%                                   43,526        20.3              24,144        10.2
          7.01% to   8.00%                                      275         0.1                 265         0.1
          8.01% to   9.00%                                      107 
                                                          ---------        ----            --------        ---- 
        Total certificate accounts                          156,631        73.0             169,032        71.5 
                                                          ---------        ----            --------        ---- 
                                                          $ 214,493         100%           $236,333         100%
                                                          =========        ====            ========        ==== 
        
        Weighted average interest rate on deposits
          during year                                                      4.63%                           4.75%
                                                                           ====                            ==== 
        
</TABLE>

        The  aggregate  amount of jumbo  certificates  of deposit with a minimum
        denomination  of $100 as of September  30, 1996 and 1997 was $57,151 and
        $52,447,  respectively. 

        Certain savings deposits of public  institutions were  collateralized by
        investment and mortgage-related securities with aggregate amortized cost
        of $41,371 and  aggregate  market value of $40,281 as of  September  30,
        1996, and aggregate amortized cost of $50,849 and aggregate market value
        of $51,168 as of September 30, 1997. 

                                       51

<PAGE>

        At September 30, 1997, certificate accounts mature as follows:

        1998                                              $ 97,076
        1999                                                55,006
        2000                                                 8,195
        2001                                                 2,113
        2002                                                 5,574
        Thereafter                                           1,068
                                                          -------- 

                                                          $169,032 
                                                          ======== 


        A summary of interest expense by deposit type is as follows:


                                                       1995    1996      1997
                                                    
        Passbook savings deposits                    $  239   $  238   $    241
        NOW accounts and money market               
          demand deposits                               565      756      1,015
        Certificate accounts                          6,697    8,491      9,662
                                                     ------   ------   -------- 
                                                    
                                                     $7,501   $9,485   $ 10,918 
                                                     ======   ======   ======== 
                                                
13.     INCOME TAXES



                                                    1995      1996      1997
                                                   
        Current                                     $ 2,668  $ 1,363   $ 2,333
        Deferred                                       (225)     530       344
                                                    -------  -------   -------
                                                    
                                                    $ 2,443  $ 1,893   $ 2,677
                                                    =======  =======   =======
                                                           
        Income tax expense has been provided at effective rates of 37.3%,  37.7%
        and  39.1%  for the  years  ended  September  30,  1995,  1996 and 1997,
        respectively.  The  differences  between  such  effective  rates and the
        statutory  Federal  income tax rate computed on income before income tax
        expense result from the following:


                                       1995          1996           1997
                                      Amount    %   Amount    %    Amount    %
        
        Federal income tax expense
          computed at statutory
          rate                       $ 2,227  34.0  $ 1,706 34.0  $ 2,328  34.0
        Increases (decreases) in
          taxes resulting from:
          State income taxes             304   4.6      181  3.6      303   4.4
          Merger related costs                                         63   0.9
          Amortization of cost over
            fair value of assets 
            acquired                      26   0.4       21  0.4        8   0.1
          Other                         (114) (1.7)     (15)(0.3)     (25) (0.3)
                                     -------  ----  ------- ----  -------  ----
         
                                     $ 2,443  37.3  $ 1,893 37.7  $ 2,677  39.1 
                                     =======  ====  ======= ====  =======  ==== 
        
                                       52

<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:

                                                      1995    1996      1997
        
        Market adjustment on loans held for sale     $(134)   $(125)   $  67
        Bad debt reserves                                2      164      (10)
        Depreciation                                    (7)      49       (4)
        Deferred loan fees and costs                    12      402      113
        Excess amortization of mortgage
          servicing rights                             (72)     (28)     (38)
        Outside Directors' Retirement Plan accrual     (52)      (1)      (1)
        Management Stock Bonus Plan accrual            (19)               19
        Federal Home Loan Bank stock dividends                   66      138
        Other                                           45        3       60
                                                     -----    -----    -----
        
                                                     $(225)   $ 530    $ 344
                                                      =====    =====    =====
                
        The components of net deferred tax  liabilities as of September 30, 1996
        and 1997 are as follows:

                                                              1996     1997
        
        Deferred tax assets:
          Allowance for loan losses                          $  173   $  183
          Excess amortization of mortgage servicing rights      100      138
          Outside Directors' Retirement Plan accrual             53       54
          Management Stock Bonus Plan accrual                    19
          Market adjustment on loans held for sale               94       27
          Other                                                  72        7
                                                             ------   ------
                                                                511      409
        
        Deferred tax liabilities:
          Federal Home Loan Bank stock dividends                396      534
          Bad debt reserves                                     402      402
          Prepaid expenses                                       90       98
          Fixed assets - depreciation                            70       66
          Deferred loan fees                                    238      351
          Other                                                  13
                                                             ------   ------
                                                              1,209    1,451
                                                             ------   ------
        
        Net deferred tax liabilities                         $  698   $1,042
                                                             ======   ======
            
        
                                       53

<PAGE>

14.     ADVANCES FROM FEDERAL HOME LOAN BANK

<TABLE>
<CAPTION>

                          1996                                          1997
        -----------------------------------------     --------------------------------------------
                                         Weighted                                      Weighted
         Fiscal                          Average       Fiscal                           Average
          Year                           Interest       Year                            Interest
        Maturity          Amount           Rate       Maturity         Amount             Rate
        
        
<S>                      <C>               <C>          <C>           <C>                 <C>   
          1997           $ 63,200          5.98 %       1998          $ 80,800            6.03 %
          1998             18,500          6.43         2001            10,000            5.85
                                                        2002            31,000            5.72
                                                                     ---------

                         $ 81,700          6.08 %                    $ 121,800            5.94 %
                         ========                                    =========            
        
</TABLE>
        
        The advances are  collateralized  as of September  30, 1997 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 $68,292,  subject to certain limitations.  As of September
        30, 1997, there was $7,300 outstanding  relative to this agreement.  The
        agreement expires December 26, 1997.

15.     EMPLOYEE BENEFIT PLANS

        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.

                                       54

<PAGE>



        The following table sets forth the funded status of the plan:

<TABLE>
<CAPTION>
                                                                                 September 30,
                                                                                1996       1997
        
<S>                                                                           <C>        <C>    
        Projected benefit obligation:
          Vested benefits                                                     $ 1,111    $ 1,276
          Nonvested benefits                                                       49         66
                                                                              -------    -------
          Accumulated benefit obligation                                        1,160      1,342
          Effect of projected future compensation levels                          453        581
                                                                              -------    -------
        Projected benefit obligation                                            1,613      1,923
        
        Fair value of plan assets                                               1,162      1,314
                                                                              -------    -------
        Projected benefit obligation in excess of fair value of plan assets       451        609
        Unrecognized net obligation existing at initial
          application of SFAS No. 87                                             (141)      (131)
        Unrecognized net loss                                                     (52)      (144)
                                                                              -------    -------

        Accrued pension cost                                                  $   258    $   334
                                                                              =======    =======
</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:

<TABLE>
<CAPTION>
                                                                                   September 30,
                                                                              1995     1996       1997
        
<S>                                                                          <C>     <C>         <C>    
        Service cost                                                         $ 172   $    181    $   214
        Interest cost                                                           83        101        110
        Actual return on assets                                                (63)       (87)      (104)
        Net amortization and deferral                                            7         19         20
                                                                             -----   --------    -------
        
        Net periodic pension cost                                            $ 199   $    214    $   240
                                                                             =====   ========    =======
</TABLE>

        For each of the plan years ending September 30, 1995, 1996 and 1997, 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%.  

        Upon execution of the  Reorganization and Merger Agreement (Note 2), the
        pension plan will be merged with  Commercial  Federal's  existing  plan.
       
        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

                                       55

<PAGE>

        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.

        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 $172, $246 and $361 for the
        years ended September 30, 1995, 1996 and 1997,  respectively.  Following
        is a summary of shares held in the ESOP Trust as of September 30, 1997:


        Allocated shares                                               32,910
        
        Shares released for allocation or committed to be released     10,200
        
        Unreleased shares                                              90,719
                                                                     --------
        Total ESOP shares                                             133,829
                                                                     ========
        
        Fair value of unreleased shares at September 30, 1997        $  3,470
                                                                     ========

        The ESOP will  terminate,  as of the date of  acquisition  by Commercial
        Federal  Corporation  (Note 2) and the ESOP will allocate and distribute
        Plan assets to Plan  participants  and  beneficiaries in accordance with
        the terms of the Plan. 

        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  


                                       56

<PAGE>

        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.

        Upon entering into the  Reorganization and Merger Agreement (Note 2) all
        plan shares subject to  restrictions  were  immediately  100% earned and
        non-forfeitable  and subject to distribution to Plan participants.  As a
        result, the Company  recognized the remaining  unearned  compensation of
        $547 related to the Plan as of September  30, 1997.  

        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 is  administered  by a
        committee of at least three  non-employee  directors  designated  by the
        Board of  Directors  (the  "Option  Committee").  The  Option  Committee
        selects 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.
      
        On January 27,  1995 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.  All such options are exercisable  immediately
        (for  nonemployee  directors)  or  otherwise  generally  at the  rate of
        one-third  following  one year after the date of the grant and one-third
        annually  thereafter.  Options on 161,773  shares  are  exercisable  and
        outstanding  at  September  30,  1997.  Options  on  3,703  shares  were
        exercised  during the year ended  September  30, 1997.  

        The stock option plan is accounted for under Accounting Principles Board
        ("APB")  Opinion No. 25. The  disclosure  requirements  of SFAS No. 123,
        Accounting for Stock-Based Compensation,  are not required as all of the
        stock options were granted prior to the date of disclosure  requirements
        of SFAS No.  123.

        Upon entering into the Reorganization and Merger Agreement (Note 2), all
        outstanding stock option awards became immediately  exercisable.  If the
        merger is treated as a pooling of  interests  for  accounting  purposes,
        each  outstanding  option  to  purchase  Company  Common  Stock  will be
        converted to an  economically  equivalent  number of Commercial  Federal
        Corporation Common Stock shares.  However,  if the merger is not treated
        as a pooling of interests for accounting purposes,  then the Option Plan
        will be  terminated  and each  holder  of  options  will  receive a cash
        payment in the  amount of the per share  

                                       57

<PAGE>

        value of the optioned  shares,  less the exercise price of such options,
        net of any cash which must be withheld  under  federal and state  income
        tax requirements.

16.     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.   Management   estimates
        approximately   $114  relate  to   severance   benefits   payable   upon
        consummation of the  Reorganization and Merger (Note 2). Expense related
        to the  retirement  plan is amortized  ratably  over the service  period
        which is also the vesting period. Total expense related to this plan was
        $141, $10 and $10 for the years ended September 30, 1995, 1996 and 1997,
        respectively.  The plan is  unfunded. 

 17.    COMMITMENTS  AND  CONTINGENT LIABILITIES 

        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.  As of September 30, 1997,  the Savings Bank
        had  commitments  to  originate  loans  approximating  $87,584  of which
        approximately $49,481 were fixed-rate (interest rates ranging from 4.75%
        to 8.5%) and $38,103 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 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 borrower. 

        As of September  30, 1996 and 1997,  the Savings Bank has  approximately
        $28,345 and $34,191 of commitments to sell loans to third parties, which
        includes   $28,345   and   $32,246  of  forward   commitments   to  sell
        mortgage-related securities,  respectively. 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 its  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 is $207 as of September 30, 1997. 

                                       58

<PAGE>

 18.    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. 

        The estimated  fair value of the Company's  financial  instruments as of
        September 30, 1996 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                1996                   1997
                                          --------------------- --------------------
                                                    Estimated              Estimated
                                          Carrying     Fair     Carrying      Fair
                                           Amount      Value     Amount      Value
        
<S>                                       <C>        <C>        <C>        <C>     
        Assets:
          Cash and cash equivalents       $  5,618   $  5,618   $ 17,327   $ 17,327
          Investment securities             86,235     83,827     79,390     79,220
          Capital stock of Federal Home
            Loan Bank                        4,327      4,327      6,675      6,675
          Mortgage-related securities       34,383     34,366     28,124     28,556
          Loans held for sale               13,718     13,816     13,894     14,078
          Loans receivable                 171,158    173,295    233,311    236,697
          Mortgage servicing rights         12,496     18,326     13,615     19,508
        
        Liabilities:
          Deposits                         214,493    215,016    236,333    237,311
          Advances from Federal Home
            Loan Bank                       81,700     81,857    121,800    121,549
          Accrued and other liabilities      4,683      4,683      4,039      4,039
        
</TABLE>


<TABLE>
<CAPTION>
                                                   1996                   1997
                                           --------------------   --------------------
                                           Contract  Estimated    Contract  Estimated
                                              or     Unrealized      or     Unrealized
                                           Notional     Gain      Notional     Gain
                                            Amount     (Loss)      Amount     (Loss)

<S>                                       <C>        <C>        <C>        <C>     
Off-balance sheet financial instruments:
  Lending commitments - fixed rate, net   $ 39,491   $   117    $ 49,481   $    235
  Lending commitments - floating rate       24,252                38,103
  Commitments to sell loans                 28,345       (64)     34,191        150

</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.  

                                       59

<PAGE>


        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. 

        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 amount  which the  Savings  Bank  expects  to fund.  The
        Savings  Bank's  estimate  of  unrealized  gains  and  losses,  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 or demand for assuming such  commitments.
        
        The fair  value  estimates  presented  herein  are  based  on  pertinent
        information  available to  management as of September 30, 1996 and 1997.
        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. 

                                       60

<PAGE>


19.     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.
  
        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>

                                                                         1995
                                                ---------------------------------------------------------
        
                                                  Savings      Mortgage
                                                   Bank        Banking     Eliminations     Consolidated
<S>                                             <C>          <C>          <C>               <C>      
        Interest income:
          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)      (2,771)                        (8,202)
                                                ---------    ---------                      ---------
                                                                                            
        Income before income taxes              $   3,357    $   3,192                      $   6,549
                                                =========    =========                      =========
                                                                                            
        Identifiable assets                     $ 214,649    $  56,274                      $ 270,923
                                                =========    =========                      =========
                                                                                    
        Depreciation and amortization expense   $     338    $      55                      $     393
                                                =========    =========                      =========
                                                                                    
        Capital expenditures                    $   1,014    $     403                      $   1,417
                                                =========    =========                      =========
</TABLE>
                                                                       

                                       61

<PAGE>

<TABLE>
<CAPTION>
                                                                   1996
                                            -------------------------------------------------------
        
                                               Savings    Mortgage
                                                Bank      Banking       Eliminations   Consolidated
<S>                                         <C>          <C>            <C>              <C>      
        Interest income:                                                                
          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>
                                                                                
                                       62
                                                                                
<PAGE>                                                                          
                                                                                

<TABLE>
<CAPTION>

                                                                   1997
                                            -------------------------------------------------------
        
                                              Savings     Mortgage
                                               Bank       Banking      Eliminations    Consolidated
<S>                                         <C>          <C>            <C>              <C>      
        Interest income:                                                                
          Unaffiliated customers            $  23,994    $   2,053                       $  26,047
          Intersegment                          2,624                   $  (2,624)      
                                            ---------    ---------      ---------        ---------
                                                                                        
                   Total interest income       26,618        2,053         (2,624)          26,047
                                            ---------    ---------      ---------        ---------
                                                                                        
        Interest expense:                                                               
          Unaffiliated customers               16,834                                       16,834
          Intersegment                                       2,624         (2,624)      
                                            ---------    ---------      ---------        ---------
                                                                                        
                   Total interest expense      16,834        2,624         (2,624)          16,834
                                            ---------    ---------      ---------        ---------
                                                                                        
        Net interest income (expense)           9,784         (571)     $                    9,213
                                                                        =========
        Provision for loan losses                (143)                                        (143)                     
        Other income                            2,575        4,944                           7,519
        Other expense                          (7,200)      (2,542)                         (9,742)
                                            ---------    ---------                       ---------
                                                                                        
        Income before income taxes              5,016        1,831                       $   6,847
                                            =========    =========                       =========
                                                                                        
        Identifiable assets                 $ 354,504    $  50,758                       $ 405,262
                                            =========    =========                       =========
                                                                                        
        Depreciation expense                $     425    $      91                       $     516
                                            =========    =========                       =========
                                                                                
        Capital expenditures                $   1,319    $     149                       $   1,468
                                            =========    =========                       =========
                                                                             
</TABLE>

                                       63

<PAGE>


20.     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,
        1996 and 1997 and  related  statements  of income and cash flows for the
        periods then ended are as follows:


<TABLE>
<CAPTION>

BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1997
(Dollars in thousands, except share amounts)
---------------------------------------------------------------------------------------

        ASSETS                                                       1996       1997
        
<S>                                                               <C>         <C>     
        CASH AND CASH EQUIVALENTS                                 $    287    $    192
        
        NOTES RECEIVABLE FROM MID-CONTINENT
          FEDERAL SAVINGS BANK                                       4,951       3,059
        
        INVESTMENT IN AND ADVANCES TO
          MID-CONTINENT FEDERAL SAVINGS BANK                        31,827      36,179
        
        OTHER ASSETS                                                    76         764
                                                                  --------    --------
        
        TOTAL ASSETS                                              $ 37,141    $ 40,194
                                                                  ========    ========
        
        LIABILITIES AND STOCKHOLDERS' EQUITY
        
        LIABILITIES -
          Income taxes payable                                    $    112
          Accrued and other liabilities                                222    $    212
                                                                  --------    --------
        
                   Total liabilities                                   334         212
                                                                  --------    --------
        
        STOCKHOLDERS' EQUITY
          Common stock $.10 par value, 20,000,000
           authorized, 2,248,250 and 2,251,953 shares issued           225         225
          Additional paid-in capital                                21,663      22,209
          Unearned compensation - Employee Stock Ownership Plan     (1,054)       (918)
          Unearned compensation - Management Stock Bonus Plan         (547)
          Retained earnings, substantially restricted               20,424      23,851
                                                                  --------    --------
        
                                                                    40,711      45,367

          Treasury stock, 231,500 and 290,000 shares, at cost       (3,904)     (5,385)
                                                                  --------    --------

                   Total stockholders' equity                       36,807      39,982
                                                                  --------    --------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $ 37,141    $ 40,194
                                                                  ========    ========
</TABLE>

                                       64

<PAGE>


<TABLE>
<CAPTION>

STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(Dollars in thousands)
------------------------------------------------------------------------------------

                                                        1995      1996      1997
        
<S>                                                    <C>       <C>       <C>    
        INTEREST INCOME                                $   575   $   361   $   243
        
        OTHER EXPENSES:
          Professional fees                                 82        44        40
          Merger and acquisition expenses                                      187
          Other                                            105        94        91
                                                       -------   -------   -------
        
                   Total other expense                     187       138       318
                                                       -------   -------   -------
        
        INCOME (LOSS) BEFORE INCOME TAX EXPENSE
          AND EQUITY IN UNDISTRIBUTED NET
          INCOME OF SUBSIDIARY                             388       223       (75)
        
        INCOME TAX EXPENSE (BENEFIT)                       140        85       (29)
                                                       -------   -------   -------
        
        INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED
          NET INCOME OF SUBSIDIARY                         248       138       (46)
        
        EQUITY IN UNDISTRIBUTED NET
          INCOME OF SUBSIDIARY                           3,858     2,988     4,216
                                                       -------   -------   -------
        
        NET INCOME                                     $ 4,106   $ 3,126   $ 4,170
                                                       =======   =======   =======
</TABLE>
        
        
        
        
                                       65
        
<PAGE>
        
<TABLE>
<CAPTION>
        
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(Dollars in thousands)
---------------------------------------------------------------------------------------------------
                                                                       1995       1996       1997
                
<S>                                                                  <C>        <C>        <C>    
        CASH FLOWS FROM OPERATING ACTIVITIES:
          Net income                                                 $ 4,106    $ 3,126    $ 4,170
          Adjustment to reconcile net income to
            net cash provided by operating activities:
            Equity in undistributed earnings of subsidiary            (3,858)    (2,988)    (4,216)
            Changes in:
              Other assets                                               (39)         6       (330)
              Accrued and other liabilities                               24        100        219
              Income taxes payable                                        94        (14)       156
                                                                     -------    -------    -------
        
                   Net cash flows provided by (used in)
                     operating activities                                327        230         (1)
                                                                     -------    -------    -------
        
        CASH FLOWS FROM INVESTING ACTIVITIES:
          Principal collected on notes receivable from
            Mid-Continent Federal Savings Bank                         2,968      2,342      1,892
                                                                     -------    -------    -------
        
                   Net cash flows provided by investing activities     2,968      2,342      1,892
                                                                     -------    -------    -------
        
        CASH FLOWS FROM FINANCING ACTIVITIES:
          Issuance of common stock for exercise of stock options        (995)                   43
          Receipt of funds for Management Stock Bonus Plan stock         199        199        199
          Acquisition of treasury stock                               (1,174)    (2,730)    (1,481)
          Cash dividends on common stock to stockholders                (615)      (783)      (747)
                                                                     -------    -------    -------
        
                    Net cash flows used in financing activities       (2,585)    (3,314)    (1,986)
                                                                     -------    -------    -------
        
        NET INCREASE (DECREASE) IN CASH AND CASH
          EQUIVALENTS                                                    710       (742)       (95)
        
        CASH AND CASH EQUIVALENTS:
          Beginning of year                                              319      1,029        287
                                                                     -------    -------    -------
        
          End of year                                                $ 1,029    $   287    $   192
                                                                     =======    =======    =======
        
        SUPPLEMENTAL DISCLOSURES OF NONCASH
          INVESTING AND FINANCING ACTIVITIES -
          Accrued dividends on common stock                          $   205    $   190    $   186
                                                                     =======    =======    =======
</TABLE>
        
        
        
        These  statements  should be read in  conjunction  with the other  notes
        related to the consolidated financial statements.
        
                                       66
        
<PAGE>
        

21.     SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<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 23).

<TABLE>
<CAPTION>
                                                Quarter Ended
                                    (In thousands, except earnings per share)
                             --------------------------------------------------------
                             December 31,    March 31,     June 30,     September 30,
                                1996           1997          1997            1997
        
<S>                            <C>            <C>          <C>            <C>   
        Interest income        $6,122         $6,164       $6,672         $7,089
        Interest expense        3,907          4,076        4,294          4,557
        Net interest income     2,215          2,088        2,378          2,532
        Net income              1,098            968        1,127            977 (2)
        Earnings per share -                                                   
          Net income             0.56           0.50         0.59           0.50

</TABLE>
                                                                      
        (2) Reflects a fourth quarter charge for merger expenses of $187 and the
            immediate  vesting  of all  remaining  Management  Stock  Bonus Plan
            shares (See Note 15).

22.     INTEREST RATE RISK

        The Company is engaged  principally in providing first mortgage loans to
        individuals.  For the year ending  September  30, 1997,  the Company had
        average  interest  earnings  assets of  approximately  $348,783 having a
        weighted  average  effective yield of 7.47% and average interest bearing
        liabilities  of   approximately   $330,726  having  a  weighted  average
        effective  interest rate of 5.09%.  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.


                                       67

<PAGE>



23.     FEDERAL LEGISLATION

        In  September   1996,   legislation   was  enacted   which   included  a
        comprehensive   reform  of  the  banking  and  thrift  industries.   The
        legislation  imposed a one-time assessment on qualifying thrift deposits
        to recapitalize  the Savings  Association  Insurance Fund ("SAIF"),  the
        fund which  insures  thrift  deposits,  and  ultimately  merged the Bank
        Insurance Fund ("BIF") and the SAIF, at which time banks and thrifts now
        pay the same  deposit  insurance  premiums.  The amount of the  one-time
        assessment was .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. For GNMA report only

                                     ******




                                       68


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


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

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 & COO          Executive Vice President, CFO & COO
Harold Siemens                               Harold Siemens
Senior Vice President                        Senior Vice President
Cheryl A. Wilkerson                          Cheryl A. Wilkerson
Vice President/Secretary                     Vice President/Secretary
David L. Walter                              David L. Walter
Vice President                               Vice President/Treasurer
Richard O. Nelson                            Craig Yaryan
Vice President                               Vice President
                                             William Cole
                                             Vice President
                                             Diane Griffin
                                             Vice President
                                             Larry Haury
                                             Vice President
                                             Jill Norman
                                             Vice President
                                             Tim Wooding
                                             Vice President
                                             Richard O. Nelson
                                             Vice President

                                       69
                                       
<PAGE>
Mid Continent Bancshares, Inc.
================================================================================


LEGAL COUNSEL
General Counsel                     Special Counsel
Adams, Jones, Robinson and Malone   Malizia, Spidi, Sloane & Fisch, P.C.
155 N. Market                       One Franklin Square
Wichita, KS  67202                  1301 K Street, NW - Suite 700 East
                                    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
         1420 N. Ohio                        762 N. West St.
         Augusta, KS  67010                  Wichita, KS  67203
         (316) 775-2208                      (316) 946-0202

Winfield
         1113 S. Main                        2123 N. Maize Road
         Winfield, KS  67156                 Wichita, KS  67212
         (316) 221-3830                      (316) 729-7999

         2310 S. Main                        3055 N. Rock Road
         Winfield, KS  67156                 Wichita, KS  67226
         (316) 221-0158                      (316) 634-3800

Newton                              Derby
         100 W. 12th                         300 N. Rock Road
         Newton, KS  67114                   Derby, KS  67037
         (316) 283-7310                      (316) 788-9800


                                       70