<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                  FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934

     For the Fiscal Year Ended December 31, 1999

                                       OR

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                        Commission File Number: 0-26556


                               CNS BANCORP, INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)
<TABLE>
<CAPTION>
<S>                                                            <C>
                 Delaware                                         43-1738315
-----------------------------------------------                ----------------
(State or other jurisdiction of incorporation                  (I.R.S. Employer
or organization)                                                 I.D. Number)

427 Monroe Street, Jefferson City, Missouri                         65101
-----------------------------------------------                ---------------
   (Address of principal executive offices)                      (Zip Code)

Issuer's telephone number:                                     (573) 634-3336
                                                               ---------------

Securities registered under Section 12(b) of the Exchange Act:      None
                                                               ---------------

Securities registered under Section 12(g) of the Exchange Act:       Common Stock,
                                                               par value $.01 per share
                                                               ------------------------
                                                                   (Title of Class)
</TABLE>

     Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES   X      NO
    -----       -----

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.    X
                                       ------

     The Registrant's revenues for the fiscal year under report were $5,867,629.

     As of March 1, 2000, there were issued and outstanding 1,418,286 shares of
the Registrant's common stock.  The common stock is listed for trading on the
Nasdaq SmallCap Market under the symbol "CNSB."  Based on the closing price per
share, the aggregate market value of the common stock outstanding held by the
nonaffiliates of the Registrant on March 1, 2000 was $17,745,861 (1,163,663
shares at $15.25 per share).

                      DOCUMENTS INCORPORATED BY REFERENCE

     No part of the following document is incorporated by reference.
<PAGE>

                                    PART I
Item 1.  Business
-----------------

General

     CNS Bancorp, Inc. ("Company"), a Delaware corporation, was organized in
January 1996 for the purpose of becoming the holding company for City National
Savings Bank, FSB ("Savings Bank") upon its conversion from a federal mutual
savings bank to a federal stock savings bank ("Conversion") in June 1996.

     The Savings Bank, founded in 1921, is a federally chartered savings bank
located in Jefferson City, Missouri.  The Savings Bank is regulated by the
Office of Thrift Supervision ("OTS"), its primary federal regulator, and the
Federal Deposit Insurance Corporation ("FDIC"), the insurer of its deposits.
The Savings Bank's deposits are federally insured by the FDIC under the Savings
Association Insurance Fund ("SAIF").  The Savings Bank is a member of the
Federal Home Loan Bank ("FHLB") System.  The Savings Bank is a community
oriented financial institution that engages primarily in the business of
attracting deposits from the general public and using these funds to originate
one- to four-family residential mortgage loans within the Savings Bank's market
area.  To a lesser extent, the Savings Bank's lending activities include the
origination and purchase of multi-family, commercial real estate, construction,
land, commercial and consumer and other loans.

Merger with Exchange National Bancshares, Inc.

     Pursuant to an Agreement and Plan of Merger dated as of October 27, 1999,
by and between the Company and Exchange National Bancshares, Inc. ("Exchange"),
the Company has agreed to merge with a subsidiary of Exchange with the
subsidiary being the surviving corporation.  Immediately after this merger, the
Savings Bank will merge with Exchange National Bank of Jefferson City, with
Exchange National Bank being the surviving institution.  As a result of this
transaction, the Company and the Savings Bank will cease to exist.  Exchange
intends to operate the Savings Bank's Tipton, St. Robert and California,
Missouri offices as branches of Exchange National Bank and to consolidate the
Savings Bank's two Jefferson City offices with Exchange National Bank's existing
offices in Jefferson City.  Under the merger agreement, each outstanding share
of the Company's common stock will automatically become exchangeable for $8.80
in cash and 0.15 of a share of Exchange common stock.  The merger consideration
is subject to downward adjustment if the Company's adjusted net worth falls
below $20.95 million.  The merger is subject to approval of the holders of a
majority of the outstanding stock of the Company and to regulatory approval.

Market Area

     The Company conducts operations in central Missouri through its main office
in Jefferson City, Missouri (Cole County) and branch offices located in the
cities of Jefferson City (Cole County), California (Moniteau County), Tipton
(Moniteau County) and St. Robert (Pulaski County).  Jefferson City is the state
capital of Missouri, resulting in a significant concentration of government
employment and an historically stable economy for the region.  Moniteau County
is a more rural county with a much lower population base and overall smaller
economy.  The Company's St. Robert branch is strategically located near Fort
Leonard Wood, a major military installation in south-central Missouri.  The
counties of Cole, Moniteau and Pulaski represent the Company's market area for
deposit generation and lending activity as most of its depositors live in these
areas and the majority of the Company's loans are secured by property in these
counties.  Approximately two-thirds of the Company's deposits are located in
Jefferson City.

     In general, the Company serves a limited growth market area with a
relatively small population base.  The Cole County economy is based primarily on
the presence of the state capital and government, which has resulted in a high
level of state government employees.  Manufacturing and services also constitute
a significant portion of the Cole County economy, with wholesale/retail trade,
finance, insurance, real estate and agriculture also contributing.  Conversely,
Moniteau County is a much more rural county containing a number of small towns
with an agricultural base, although a large percentage of residents also commute
into Jefferson City or nearby Columbia or Sedalia for employment.  Pulaski
County's economy is dominated by the operations of Fort Leonard Wood, a major
military

                                      -1-
<PAGE>

installation and training center for all branches of the military. In general,
the economy of the Company's market area has been relatively stable over the
past decade.

Competition

     The Company operates in a competitive market for the attraction of savings
deposits (its primary source of lendable funds) and in the origination of loans.
Its most direct competition for savings deposits has historically come from
local commercial banks, credit unions and other thrifts operating in its market
area.  As of December 31, 1999, there were ten commercial banks and one other
thrift operating in Cole County, Missouri.  Most of these financial institutions
are locally-owned community oriented banks and thrifts, however, there are three
subsidiaries of larger regional holding companies.  As a result of this
competition, the Company at times has suffered deposit declines and loss of
market share.  The Company's branches in California, Tipton and St. Robert,
Missouri also face competition from other financial institutions.  Particularly
in times of high interest rates, the Company has faced additional significant
competition for investors' funds from short-term money market securities and
other corporate and government securities.  The Company's competition for loans
also comes from mortgage bankers.

Lending Activities

     General.  The principal lending activity of the Company is the origination
and purchase of conventional mortgage loans for the purpose of purchasing,
constructing or refinancing owner-occupied, one- to four-family residential
property.  To a lesser extent, the Company also originates and purchases multi-
family, commercial real estate, construction, land, commercial and consumer and
other loans.

     Loan Portfolio Analysis.  The following table sets forth the composition of
the Company's loan portfolio by type of loan at the dates indicated. The Company
had no concentration of loans exceeding 10% of total loans other than as
disclosed below.

<TABLE>
<CAPTION>
                                                                            At December 31,
                                            ----------------------------------------------------------------------------------
                                                     1999                         1998                        1997
                                            --------------------------  --------------------------  --------------------------
                                               Amount       Percent        Amount       Percent         Amount      Percent
                                                            of Total                    of Total                    of Total
                                            ------------  ------------  ------------  ------------  ------------  ------------
                                                                         (Dollars in Thousands)
<S>                                         <C>           <C>           <C>           <C>           <C>           <C>
Mortgage loans:
     One- to four-family ................   $45,214        67.41%       $45,495         70.68%       $52,266        76.63%
     Multi-family .......................     5,351         7.98          5,460          8.48          5,234         7.68
     Commercial real estate .............     7,650        11.41          7,548         11.73          7,034        10.31
     Construction .......................     3,399         5.07          3,087          4.80          1,620         2.38
     Land ...............................       133         0.20             69          0.11            109         0.16
                                            -------       ------        -------        ------        -------       ------
          Total mortgage loans ..........    61,747        92.07         61,659         95.80         66,263        97.16

Commercial loans ........................     3,193         4.76          1,157          1.80            425         0.62
Consumer and other loans ................     2,130         3.17          1,543          2.60          1,513         2.22
                                            -------       ------        -------        ------        -------       ------
          Total loans ...................    67,070       100.00%        64,359        100.00%        68,201       100.00%
                                            -------       ======        -------        ======        -------       ======

Less:
     Loans in process ...................     2,377                       2,239                        1,287
     Deferred loan fees and discounts ...        11                          10                           14
     Allowance for loan losses ..........       419                         410                          388
                                            -------                     -------                      -------
          Total loans receivable, net ...   $64,263                     $61,700                      $66,512
                                            =======                     =======                      =======
</TABLE>

                                      -2-
<PAGE>

     The following table sets forth certain information at December 31, 1999
regarding the dollar amount of principal repayments becoming due during the
periods indicated. Demand loans, loans having no stated schedule of repayments
and no stated maturity, and overdrafts are reported as becoming due within one
year. The table does not include any estimate of prepayments which significantly
shorten the average life of all loans and may cause the Company's actual
repayment experience to differ from that shown below.

<TABLE>
<CAPTION>
                                                     After           After           After
                                                     1 Year         3 Years         5 Years
                                    Within          Through         Through         Through         Beyond
                                   One Year         3 Years         5 Years         10 Years       10 Years        Total
                                ------------     ------------    ------------    ------------    ------------    ------------
                                                                        (In Thousands)
<S>                               <C>              <C>             <C>             <C>             <C>             <C>
Mortgage loans:
 One- to four-family ..........       $1,089           $  880          $1,257          $6,432         $35,556         $45,214
 Multi-family .................           --               --           1,563           1,530           2,254           5,347
 Commercial real estate .......          376               --              27           1,764           5,487           7,654
 Construction .................        1,741            1,050              --              --             608           3,399
 Land .........................           --               28              85              --              20             133
Commercial loans ..............        1,080            1,810              78             213              12           3,193
Consumer and other loans ......          942              555             547              55              31           2,130
                                      ------           ------          ------          ------         -------         -------
  Total loans .................       $5,228           $4,323          $3,557          $9,994         $43,968         $67,070
                                      ======           ======          ======          ======         =======         =======
</TABLE>


     Scheduled contractual principal repayments of loans do not reflect the
actual life of such assets.  The average life of a loan is substantially less
than its contractual terms because of prepayments.  In addition, due-on-sale
clauses on loans generally give the Company the right to declare loans
immediately due and payable in the event, among other things, that the borrower
sells the real property subject to the mortgage and the loan is not repaid.  The
average life of mortgage loans tends to increase, however, when current mortgage
loan market rates are substantially higher than rates on existing mortgage loans
and, conversely, decrease when rates on existing mortgage loans are
substantially higher than current mortgage loan market rates.

     The following table sets forth the dollar amount of all loans due after
December 31, 2000, which have fixed interest rates and which have floating or
adjustable interest rates.

<TABLE>
<CAPTION>
                                               Fixed-             Floating or
                                               Rates            Adjustable-Rates
                                        -----------------     ------------------
                                                    (In Thousands)
<S>                                       <C>                   <C>
Mortgage loans:
   One- to four-family..............          $11,591               $32,533
   Multi-family.....................              884                 4,463
   Commercial real estate...........            4,439                 2,840
   Construction.....................            1,658                    --
   Land.............................               --                   133
Commercial loans....................              393                 1,719
Consumer and other loans............            1,149                    40
                                              -------               -------
       Total loans..................          $20,114               $41,728
                                              =======               =======
</TABLE>


     Residential Real Estate Lending. The primary lending activity of the
Company is the origination of mortgage loans to enable borrowers to purchase
existing one- to four-family homes. The Company also originates home equity
loans and second mortgages secured by one- to four-family homes. At December 31,
1999, $45.2 million, or 67.41% of the Company's total loan portfolio, consisted
of loans secured by one- to four-family residences. Of this amount, $4.9 million
were home equity or second mortgage loans.

                                      -3-
<PAGE>

     The Company presently originates both adjustable rate mortgage ("ARM")
loans and fixed-rate mortgage loans. The Company's loans are generally
underwritten and documented in accordance with the guidelines established by
Freddie Mac. The Company generally retains in its portfolio all of the ARM loans
that it originates and may sell to Freddie Mac the fixed-rate mortgage loans
that it originates. Generally, the Company sells whole loans on a servicing-
retained basis. All loans are sold without recourse. The Company's decision to
hold or sell loans is based on its asset/liability management policies and goals
and the market conditions for mortgages. Currently, fixed-rate residential loans
with yields greater than 7.5% and terms of 30 years or less are retained in the
Company's loan portfolio to meet the Company's asset/liability management
objectives. See "-- Lending Activities -- Loan Originations, Sales and
Purchases." At December 31, 1999, $42.5 million, or 70.8%, of the Company's
total loans were subject to periodic interest rate adjustments.

     The Company offers ARM loans at rates and terms competitive with market
conditions.  Substantially all of the ARM loans originated by the Company meet
the underwriting standards of Freddie Mac even though the Company originates ARM
loans primarily for its own portfolio.  The Company offers several ARM products
that adjust annually after an initial period ranging from one to three years.
Some ARM loans are originated with an option to convert the loan to a 30-year
fixed-rate loan at the then prevailing market interest rate.  These ARM products
utilize the weekly average yield on one-year or three-year U.S. Treasury
securities adjusted to a constant maturity ("CMT") of one or three years plus a
margin of 2.75% to 3.0%.  ARM loans held in the Company's portfolio do not
permit negative amortization of principal and carry no prepayment restrictions.
Prior to March 1, 1995, when the Savings Bank switched from a state mutual
charter to a federal mutual charter, the Savings Bank offered ARM loans that
were based on the Savings Bank's cost of funds.  The Company currently offers
ARM loans with initial rates below those which would prevail under the foregoing
computations, determined by the Company based on market factors and competitive
rates for loans having similar features offered by other lenders for the same
initial periods. The periodic interest rate cap (the maximum amount by which the
interest rate may be increased or decreased in a given period) on the Company's
ARM loans is generally 1.0% to 2.0% per adjustment period and the lifetime
interest rate cap is generally 5.0% to 6.0% over the initial interest rate of
the loan.  Borrower demand for ARM loans versus fixed-rate mortgage loans is a
function of the level of market interest rates, the expectations of changes in
the level of interest rates and the difference between the initial interest
rates and fees charged for each type of loan.  The relative amount of fixed-rate
mortgage loans and ARM loans that can be originated at any time is largely
determined by the demand for each in a competitive environment.

     The Company also offers ARM loans for non-owner-occupied one- to four-
family homes. The rates on these loans are generally 25 basis points higher than
for a comparable loan for an owner-occupied residence and adjust to a rate equal
to 2.875% to 3.125% above the one-year or three-year CMT index. Loans secured by
non-owner-occupied residences generally involve greater risks than loans secured
by owner-occupied residences. Payments on loans secured by such properties are
often dependent on successful operation or management of the properties. In
addition, repayment of such loans may be subject to a greater extent to adverse
conditions in the real estate market or the economy. The Company requires that
borrowers with loans secured by non-owner-occupied homes submit annual financial
statements.

     The terms and conditions of the ARM loans offered by the Company, including
the index for interest rates, may vary from time to time.  The Company believes
that the adjustment features of its ARM loans provide flexibility to meet
competitive conditions as to initial rate concessions while preserving the
Company's objectives by limiting the duration of the initial rate concession.

     The retention of ARM loans in the Company's loan portfolio helps reduce the
Company's exposure to changes in interest rates.  There are, however,
unquantifiable credit risks resulting from the potential of increased costs due
to changed rates to be paid by the customer.  It is possible that during periods
of rising interest rates the risk of default on ARM loans may increase as a
result of repricing and the increased payments required by the borrower.
Furthermore, because the ARM loans originated by the Company currently provide,
as a marketing incentive, for initial rates of interest below the rates which
would apply were the adjustment index used for pricing initially (discounting),
these loans are subject to increased risks of default or delinquency.  To lessen
this risk, borrowers are approved based on the lower of the fully indexed rate
or 2.0% above the initial rate.  Another consideration is that although ARM
loans allow the Company to increase the sensitivity of its asset base to changes
in the interest rates, the extent of this interest sensitivity

                                      -4-
<PAGE>

is limited by the periodic and lifetime interest rate adjustment limits. Because
of these considerations, the Company has no assurance that yields on ARM loans
will be sufficient to offset increases in the Company's cost of funds.

     While single-family residential real estate loans are normally originated
with 15 to 30 year terms, such loans typically remain outstanding for
substantially shorter periods. This is because borrowers often prepay their
loans in full upon sale of the property pledged as security or upon refinancing
the original loan. In addition, substantially all mortgage loans in the
Company's loan portfolio contain due-on-sale clauses providing that the Company
may declare the unpaid amount due and payable upon the sale of the property
securing the loan. Typically, the Company enforces these due-on-sale clauses to
the extent permitted by law and as business judgment dictates. Thus, average
loan maturity is a function of, among other factors, the level of purchase and
sale activity in the real estate market, prevailing interest rates and the
interest rates payable on outstanding loans.

     The Company generally requires title insurance insuring the status of its
lien or a title abstract and acceptable attorney's opinion on all loans where
real estate is the primary source of security. The Company also requires that
fire and casualty insurance (and, if appropriate, flood insurance) be maintained
in an amount at least equal to the outstanding loan balance.

     The Company's lending policies generally limit the maximum loan-to-value
ratio on mortgage loans secured by owner-occupied properties to 97% of the
lesser of the appraised value or the purchase price, with the condition that
private mortgage insurance is generally required on loans with loan-to-value
ratios greater than 80%. The maximum loan-to-value ratio on mortgage loans
secured by non-owner-occupied properties is generally 80%.

     Multi-Family Residential and Commercial Real Estate Lending.  The Company
engages in a moderate amount of multi-family residential and commercial real
estate lending primarily in the local Jefferson City market area.  As market
conditions permit, the Company sells participation interests in the larger
multi-family loans that it originates.  The Company also participates with other
Missouri financial institutions in multi-family and commercial real estate loans
secured by property in Missouri.  At December 31, 1999, the Company's loan
portfolio included $6.4 million in multi-family real estate loans and $7.7
million in commercial real estate loans.

     Multi-family and commercial real estate loans originated by the Company
have either fixed or adjustable interest rates and are generally for terms of 15
years. The maximum loan-to-value ratio for multi-family and commercial real
estate loans is generally 75%. Multi-family loans generally are secured by small
to medium sized projects. The Company's commercial real estate loan portfolio
generally consists of loans secured by small office buildings and small
commercial properties, most of which are located in central Missouri. Appraisals
on properties which secure multi-family and commercial real estate loans are
performed by an independent appraiser engaged by the Company before the loan is
made. Underwriting of multi-family and commercial real estate loans includes a
thorough analysis of the cash flows generated by the real estate to support the
debt service and the financial resources, experience, and income level of the
borrowers. Annual operating statements on each multi-family and commercial real
estate loan are required and reviewed by management. Multi-family and commercial
real estate loans and loan participations that are purchased by the Company are
underwritten to the Company's standards.

     Multi-family and commercial real estate lending affords the Company an
opportunity to receive interest at rates higher than those generally available
from one- to four-family residential lending.  However, loans secured by such
properties usually are greater in amount, more difficult to evaluate and monitor
and, therefore, involve a greater degree of risk than one- to four-family
residential mortgage loans.  Because payments on loans secured by multi-family
and commercial properties are often dependent on the successful operation and
management of the properties, repayment of such loans may be affected by adverse
conditions in the real estate market or the economy.  The Company seeks to
minimize these risks by limiting the maximum loan-to-value ratio to 75% and
strictly scrutinizing the financial condition of the borrower, the quality of
the collateral and the management of the property securing the loan.  The
Company also obtains loan guarantees from financially capable parties based on a
review of personal financial statements.

                                      -5-
<PAGE>

     Construction Lending. The Company originates residential construction loans
to individuals and, occasionally, to builders, to construct one- to four-family
homes. In addition, from time to time the Company originates or participates in
construction loans for multi-family or commercial properties. Construction loans
are generally made in connection with permanent financing. Construction loans
that are not made in connection with the granting of permanent financing on the
property are for terms of six to 12 months.

     Construction lending is considered to involve a higher level of risk as
compared to one- to four-family residential lending because of the inherent
difficulty in estimating both a property's value at completion of the project
and the estimated cost of the project.  The nature of these loans is such that
they are more difficult to evaluate and monitor.  If the estimate of value
proves to be inaccurate, the Company may be confronted at, or prior to, the
maturity of the loan, with a project the value of which is insufficient to
assure full repayment.  The Company attempts to minimize these risks by limiting
the maximum loan-to-value ratio on construction loans to 85% for residential
construction loans and 80% for non-residential construction loans and by
conditioning disbursements on the presentation of itemized bills and an
inspection of the construction site.  For non-residential construction loans,
the Company generally obtains personal guarantees and requires borrowers to
submit annual financial statements.

     Land Lending. The Company occasionally originates loans for the acquisition
of land upon which the purchaser can then build or upon which the purchaser
makes improvements necessary to build upon or to sell as improved lots. Land
loans originated by the Company have a term to maturity of up to three years and
are based on a ten-year amortization schedule.

     Loans secured by undeveloped land or improved lots involve greater risks
than one- to four-family residential mortgage loans because such loans are more
difficult to evaluate. If the estimate of value proves to be inaccurate, in the
event of default and foreclosure the Company may be confronted with a property
the value of which is insufficient to assure full repayment. The Company
attempts to minimize this risk by limiting the maximum loan-to-value ratio on
loans secured by undeveloped land to 65% and by improved lots to 85%.

     Commercial Lending.  The Company engages in a small amount of commercial
business lending.  Commercial loans originated by the Company have both fixed
and adjustable rates and are generally for terms of five to 10 years.  These
loans are typically secured by equipment, inventory or other available assets.
Commercial loans generally have shorter terms and higher interest rates than
mortgage loans.  The security on these loans is usually more difficult to
evaluate and monitor and often depreciates rapidly.  Because the repayment on
these loans is often dependent on successful operation and management of a
business, repayment may be adversely affected by changes in the economy or the
specific industry of the business.  The Company attempts to minimize risks by
scrutinizing the financial condition and creditworthiness of the borrower and
the quality of the collateral.  The Company also obtains personal guarantees on
commercial loans from financially capable parties based on a review of personal
financial statements.

     Consumer and Other Lending. Consumer lending traditionally has been a small
part of the Company's business. Consumer loans generally have shorter terms to
maturity and higher interest rates than mortgage loans. The Company's consumer
and other loans consist primarily of deposit account loans, unsecured loans and
automobile loans. The Company makes deposit account loans with the account
pledged as collateral to secure the loan. Loans may be made up to 90% of the
account balance. Deposit account loans are payable in monthly payments of
principal and interest or in a single payment. At December 31, 1999, total loans
on deposit accounts amounted to $772,000. The Company makes unsecured loans to
individuals for personal, family or household purposes. Generally, unsecured
loans are made to current customers with an established relationship with the
Company. Such loans may be for a term of up to 24 months. At December 31, 1999,
unsecured loans totaled $265,000.

     Consumer loans entail greater risk than do residential mortgage loans,
particularly in the case of consumer loans that are unsecured or secured by
rapidly depreciating assets such as automobiles.  In such cases, any repossessed
collateral for a defaulted consumer loan may not provide an adequate source of
repayment of the outstanding loan balance as a result of the greater likelihood
of damage, loss or depreciation.  The remaining deficiency often does not
warrant further substantial collection efforts against the borrower beyond
obtaining a deficiency judgment.  In addition,

                                      -6-
<PAGE>

consumer loan collections are dependent on the borrower's continuing financial
stability, and thus are more likely to be adversely affected by job loss,
divorce, illness or personal bankruptcy. Furthermore, the application of various
federal and state laws, including federal and state bankruptcy and insolvency
laws, may limit the amount that can be recovered on such loans. At December 31,
1999, the Company had no material delinquencies in its consumer loan portfolio.

     Loan Solicitation and Processing.  Loan applicants come primarily through
existing customers, referrals by realtors, previous and present customers of the
Company and business acquaintances, and walk-ins.  The Company also uses radio
and newspaper advertising to create awareness of its loan products.  Upon
receipt of a loan application from a prospective borrower, a credit report and
other data are obtained to verify specific information relating to the loan
applicant's employment, income and credit standing.  An appraisal of the real
estate offered as collateral generally is undertaken by an independent fee
appraiser certified by the State of Missouri.

     Mortgage loans up to $100,000 for owner-occupied residential properties
must be approved by the Savings Bank's Loan Committee, which consists of the
Chief Executive Officer and two officers, or by the Board of Directors' Loan
Committee, which consists of the Chief Executive Officer and three directors.
Loans of $100,000 to $250,000 must be approved by the Board of Director's Loan
Committee, and loans exceeding $250,000 must be approved by the Board of
Directors. Interest rates are subject to change if the approved loan is not
closed within the time of the commitment. The Company's loan approval process
allows mortgage loans to be approved in approximately 21 days and closed in 30
days.

     Loan Originations, Sales and Purchases.  While the Company originates both
adjustable-rate and fixed-rate loans, its ability to generate each type of loan
is dependent upon relative customer demand for loans in its market.  Of the
$35.0 million of loans originated and purchased during 1999, 24.28% were
adjustable-rate loans and 75.72% were fixed-rate loans.

     In recent periods, the Company has sold its 30-year and 20-year and a
portion of its 15-year fixed-rate single-family residential mortgage loans to
Freddie Mac. During 1999, the Company retained most of the fixed-rate mortgage
loans that it originated. Sales are made on a non-recourse basis. Sales of loans
for the years ended December 31, 1999, 1998 and 1997 totaled $8.4 million, $18.9
million and $1.5 million, respectively. The Company generally sells loans on a
servicing-retained basis. See "-- Lending Activities -- Loan Servicing." At
December 31, 1999 the Company had no loans held for sale.

     The Company also purchases whole loans and loan participation interests,
primarily during periods of reduced loan demand in its market area.  It has been
the practice of the Company in recent years only to purchase loans secured by
real estate located in Missouri.  All purchases are made in conformance with the
Company's underwriting standards.

                                      -7-
<PAGE>

     The following table shows total loans originated, purchased, sold and
repaid during the periods indicated.

<TABLE>
<CAPTION>
                                                Year Ended December 31,
                                       ----------------------------------------
                                           1999          1998          1997
                                       ------------  ------------  ------------
<S>                                      <C>           <C>           <C>
                                                    (In Thousands)
Loans originated:
Mortgage loans:
   One- to four-family...............       $15,990       $21,527       $14,555
   Multi-family......................           206           650            --
   Commercial........................           249           612         1,315
   Construction......................         1,779         2,627         1,148
   Land..............................           142            16            49
Commercial loans.....................         6,020         1,133           415
Consumer and other loans.............         2,077         1,558         1,894
                                            -------       -------       -------
       Total loans originated........        26,463        28,123        19,376
                                            -------       -------       -------

Loans purchased:
Mortgage loans:
   One- to four-family...............         1,934         5,035         3,140
   Multi-family......................         4,921           518           551
   Commercial........................         1,750         2,700           625
                                            -------       -------       -------
       Total loans purchased.........         8,605         8,253         4,316
                                            -------       -------       -------

Loans sold:
       Total loans sold..............         8,358        18,900         1,524
                                            -------       -------       -------

Mortgage loan principal                      24,147        22,289        16,636
   repayments........................       -------       -------       -------


Net increase (decrease) in loans            $ 2,563       $(4,813)      $ 5,532
   receivable, net...................       =======       =======       =======

</TABLE>

     Loan Commitments.  The Company issues commitments to originate loans
conditioned upon the occurrence of certain events.  Such commitments are made in
writing on specified terms and conditions and are honored for up to 45 days from
the date of loan approval.  The Company had outstanding net loan commitments of
approximately $4.4 million, including $383,000 in fixed rate loan commitments in
first mortgage loans, $412,000 in variable rate loan commitments in first
mortgage loans, $2.4 million in unfunded portions of construction loans and
lines of credit of $1.2 million at December 31, 1999.

     Loan Origination and Other Fees.  The Company, in some instances, receives
loan origination fees.  Loan fees are a fixed dollar amount or a percentage of
the principal amount of the mortgage loan which is charged to the borrower for
funding the loan.  The amount of fees charged by the Company is currently $300
for loans secured by single-family homes.  Current accounting standards require
fees received (net of certain loan origination costs) for originating loans to
be deferred and amortized into interest income over the contractual life of the
loan.  Net deferred fees or costs associated with loans that are prepaid are
recognized as income at the time of prepayment.  The Company had $11,000 of net
deferred mortgage loan fees at December 31, 1999.

     Loan Servicing. The Company sells loans to Freddie Mac and private
investors on a servicing retained basis and receives fees in return for
performing the traditional services of collecting individual payments and
managing the loans. At December 31, 1999, the Company was servicing $30.0
million of loans for Freddie Mac and $6.2 million of loans for private
investors. Loan servicing includes processing payments, accounting for loan
funds and collecting and paying real estate taxes, hazard insurance and other
loan-related items such as private mortgage insurance. When the

                                      -8-
<PAGE>

Company receives the gross mortgage payment from individual borrowers, it remits
to the investor in the mortgage a predetermined net amount based on the yield on
that mortgage. The difference between the coupon on the underlying mortgage and
the predetermined net amount paid to the investor is the gross loan servicing
fee. For the year ended December 31, 1999, loan servicing fees totaled $70,000.
In addition, the Company retains certain amounts in escrow for the benefit of
Freddie Mac for which the Company incurs no interest expense but is able to
invest. At December 31, 1999, the Savings Bank held $23,000 in escrow for its
portfolio of loans serviced for Freddie Mac.

     Nonperforming Assets and Delinquencies. When a mortgage loan borrower fails
to make a required payment when due, the Company institutes collection
procedures. The first notice is mailed to the borrower approximately ten days
after the payment is due in order to permit the borrower to make the payment
before the imposition of a late fee. A second notice is generated when a payment
becomes 30 days past due. Attempts to contact the borrower by telephone or
letter generally begin soon after the first notice is mailed to the borrower. If
a satisfactory response is not obtained, continuous follow-up contacts are
attempted until the loan has been brought current. Before the 90th day of
delinquency, attempts to interview the borrower, preferably in person, are made
to establish (i) the cause of the delinquency, (ii) whether the cause is
temporary, (iii) the attitude of the borrower toward the debt, and (iv) a
mutually satisfactory arrangement for curing the default.

     In most cases, delinquencies are cured promptly; however, if by the 91st
day of delinquency, or sooner if the borrower is chronically delinquent and all
reasonable means of obtaining payment on time have been exhausted, foreclosure,
according to the terms of the security instrument and applicable law, is
initiated. Interest income on loans is reduced by the full amount of accrued and
uncollected interest.

     The Board of Directors is informed on a monthly basis as to the status of
all loans that are delinquent more than 30 days, the status on all loans
currently in foreclosure, and the status of all foreclosed and repossessed
property owned by the Company.

                                      -9-
<PAGE>

     The following table sets forth information with respect to the Company's
nonperforming assets and restructured loans within the meaning of Statement of
Financial Accounting Standards ("SFAS") No. 15 at the dates indicated.  It is
the policy of the Company to cease accruing interest on loans 90 days or more
past due.

<TABLE>
<CAPTION>
                                                                      At December 31,
                                                       ----------------------------------------------
                                                            1999            1998             1997
                                                       ------------    -------------    -------------
<S>                                                      <C>             <C>              <C>
                                                                   (Dollars in Thousands)
Loans accounted for on
  a nonaccrual basis:
       Mortgage loans:
               One- to four-family.................           $  39            $  --            $ 132
               Commercial real estate..............             151              156               --
                                                              -----            -----            -----
                      Total........................             190              156              132
                                                              -----            -----            -----

Accruing loans which are
   contractually past due
   90 days or more.................................              --               --               --
                                                              -----            -----            -----

Total nonaccrual and                                            190              156              132
   90 days past due loans..........................           -----            -----            -----


Real estate owned, net.............................              --               46               --
                                                              -----            -----            -----

                      Total nonperforming assets...           $ 190            $ 202            $ 132
                                                              =====            =====            =====

Restructured loans.................................           $  --            $  18            $  85

Nonaccrual and 90 days or more
   past due loans as a percentage
   of loans receivable, net........................            0.30             0.25             0.19

Nonaccrual and 90 days or more
   past due loans as a percentage
   of total assets.................................            0.21             0.16             0.13

Nonperforming assets as a
   percentage of total assets......................            0.21             0.21             0.13
</TABLE>

     Interest income that would have been recorded for the year ended December
31, 1999 had nonaccruing loans been current in accordance with their original
terms amounted to approximately $3,000. The amount of interest included in
interest income on such loans for the year ended December 31, 1999 amounted to
approximately $19,000.

     Real Estate Owned and Held for Investment.  Real estate acquired by the
Company as a result of foreclosure or by deed-in-lieu of foreclosure is
classified as real estate owned ("REO") until it is sold.  When property is
acquired it is recorded at the lower of its cost, which is the unpaid principal
balance of the related loan plus foreclosure costs, or fair value.  Subsequent
to foreclosure, REO held for sale is carried at the lower of the carrying amount
or fair value, less estimated selling costs.  At December 31, 1999, the Company
had no REO.

     In June 1997, the Company invested in a real estate joint venture in
Waynesville, Missouri, known as Briar Pointe Development Co., LLC.  During 1999,
the Company acquired the interest of its joint venture partner and now owns the
entire project.  At December 31, 1999, the Company's investment was $622,000.
Briar Pointe, LLC will develop and sell 125 building lots for single family
homes in a new subdivision known as Briar Pointe located in the

                                      -10-
<PAGE>

city of Waynesville, Missouri. The project is expected to be completed within
the next few years. Through December 31, 1999, 19 lots have been sold at an
average price of $18,800.

     Asset Classification.  The OTS has adopted various regulations regarding
problem assets of savings institutions.  The regulations require that each
insured institution review and classify its assets on a regular basis.  In
addition, in connection with examinations of insured institutions, OTS examiners
have authority to identify problem assets and, if appropriate, require them to
be classified.  There are three classifications for problem assets: substandard,
doubtful and loss.  Substandard assets have one or more defined weaknesses and
are characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected.  Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that the
weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a high
possibility of loss.  An asset classified as loss is considered uncollectible
and of such little value that continuance as an asset of the institution is not
warranted.  If an asset or portion thereof is classified as loss, the insured
institution establishes specific allowances for loan losses for the full amount
of the portion of the asset classified as loss.  All or a portion of general
loan loss allowances established to cover possible losses related to assets
classified substandard or doubtful may be included in determining an
institution's regulatory capital, while specific valuation allowances for loan
losses generally do not qualify as regulatory capital.  Assets that do not
currently expose the insured institution to sufficient risk to warrant
classification in one of the aforementioned categories but possess weaknesses
are placed on a "watch list" and monitored by the Company.

     The following table sets forth the composition of the Company's classified
assets at December 31, 1999:


<TABLE>
<CAPTION>
                                            Loss                          Doubtful                     Substandard
                                  --------------------------     --------------------------     --------------------------
                                    Number        Principal        Number        Principal        Number        Principal
                                   of Loans        Amount         of Loans        Amount         of Loans        Amount
                                  ----------    ------------     ----------    ------------     ----------    ------------
<S>                               <C>           <C>              <C>           <C>              <C>           <C>
                                                                       (In Thousands)
Mortgage loans:
 One- to four-family ........        --             $--              --             $--               2            $ 52
 Multi-family ...............        --              --              --              --              --              --
 Commercial real estate .....        --              --              --              --               1             151
 Construction ...............        --              --              --              --              --              --
 Land .......................        --              --              --              --              --              --
Commercial loans ............        --              --              --              --              --              --
Consumer and other loans ....         1               1              --              --               4               5
</TABLE>

     Allowance for Loan Losses.  The Company has established a systematic
methodology for the determination of provisions for loan losses.  The
methodology is set forth in a formal policy and takes into consideration the
need for an overall general valuation allowance as well as specific allowances
that are tied to individual loans.

     In originating loans, the Company recognizes that losses will be
experienced and that the risk of loss will vary with, among other things, the
type of loan being made, the creditworthiness of the borrower over the term of
the loan, general economic conditions and, in the case of a secured loan, the
quality of the security for the loan.  The Company increases its allowance for
loan losses by charging provisions for loan losses against the Company's income.

     The general valuation allowance is maintained to cover losses inherent in
the portfolio of performing loans.  Management's periodic evaluation of the
adequacy of the allowance is based on the Company's past loan loss experience,
known and inherent risks in the portfolio, adverse situations that may affect
the borrower's ability to repay, the estimated value of any underlying
collateral, and current economic conditions.  Specific valuation allowances are
established to absorb losses on loans for which full collectibility may not be
reasonably assured.  The amount of the

                                      -11-
<PAGE>

allowance is based on the estimated value of the collateral securing the loan
and other analyses pertinent to each situation. Generally, a provision for
losses is charged against income on a quarterly basis to maintain the
allowances.

     At December 31, 1999, the Company had an allowance for loan losses of
$419,000.  Management believes that the amount maintained in the allowances will
be adequate to absorb losses inherent in the portfolio.  Although management
believes that it uses the best information available to make such
determinations, future adjustments to the allowance for loan losses may be
necessary and results of operations could be significantly and adversely
affected if circumstances differ substantially from the assumptions used in
making the determinations.

     While the Company believes it has established its existing allowance for
loan losses in accordance with generally accepted accounting principles, there
can be no assurance that regulators, in reviewing the Company's loan portfolio,
will not request the Company to increase significantly its allowance for loan
losses.  In addition, because future events affecting borrowers and collateral
cannot be predicted with certainty, there can be no assurance that the existing
allowance for loan losses is adequate or that substantial increases will not be
necessary should the quality of any loans deteriorate as a result of the factors
discussed above.  Any material increase in the allowance for loan losses may
adversely affect the Company's financial condition and results of operations.

     The following table sets forth an analysis of the Company's allowance for
loan losses for the periods indicated.  Where specific loan loss reserves have
been established, any differences between the loss allowances and the amount of
loss realized has been charged or credited to current income.

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                       ----------------------------------------------
                                                            1999            1998             1997
                                                       ------------    -------------    -------------
<S>                                                      <C>             <C>              <C>
                                                                   (Dollars in Thousands)

Allowance at beginning of period .....................      $   410          $   388          $   383
                                                            -------          -------          -------

Provision for loan losses ............................           11               63                5
                                                            -------          -------          -------

Total recoveries .....................................           --               --               --
                                                            -------          -------          -------

Total charge-offs ....................................            2               41               --
                                                            -------          -------          -------

Net charge-offs ......................................            2               41               --
                                                            -------          -------          -------

Balance at end of period .............................      $   419          $   410          $   388
                                                            =======          =======          =======

Allowance for loan losses as a percentage
   of total loans outstanding at the end
   of the period .....................................          .65%            0.67%            0.58%

Net charge-offs as a percentage of average
   loans outstanding during the period ...............         .003             0.06               --

Allowance for loan losses as a percentage
   of nonperforming loans at end of period ...........       220.53           262.82           293.94
</TABLE>

                                      -12-
<PAGE>

     The following table sets forth the breakdown of the allowance for loan
losses by loan category for the periods indicated.  Management believes that the
allowance can be allocated by category only on an approximate basis.  The
allocation of the allowance to each category is not necessarily indicative of
future losses and does not restrict the use of the allowance to absorb losses in
any other category.

<TABLE>
<CAPTION>
                                                                    At December 31,
                                        -------------------------------------------------------------------------
                                                 1999                     1998                      1997
                                        -----------------------  -----------------------  -----------------------
                                                         % of                     % of                     % of
                                                        Loans                    Loans                    Loans
                                                       in Each                  in Each                  in Each
                                                      Category                 Category                 Category
                                                      to Total                 to Total                 to Total
                                          Amount        Loans      Amount        Loans      Amount        Loans
                                        -----------------------  -----------------------  -----------------------
<S>                                       <C>         <C>          <C>         <C>          <C>         <C>
                                                                (Dollars in Thousands)
Mortgage loans:
     One- to four-family ............    $ 200          47.73%      $ 219        70.79%      $ 204       76.63%
     Multi-family ...................       68          16.23          55         8.50          52        7.68
     Commercial real estate .........       91          21.72          76        11.74         103       10.31
     Construction ...................       10           2.39          21         4.66           3        2.38
     Land ...........................        1           0.24           1         0.11           1        0.16
Commercial loans ....................       34           8.11          27         1.80           4        0.62
Consumer and other loans ............       15           3.58          11         2.40          13        2.21
Unallocated .........................       --            N/A          --          N/A           8         N/A
                                         -----         ------       -----       ------       -----      ------

          Total allowance for
             loan losses ............    $ 419         100.00%      $ 410       100.00%      $ 388      100.00%
                                         =====         ======       =====       ======       =====      ======
</TABLE>

Investment Activities

     The Savings Bank is permitted under federal and state law to invest in
various types of liquid assets, including U.S. Treasury obligations, securities
of various federal agencies and of state and municipal governments, deposits at
the FHLB-Des Moines, certificates of deposit of federally insured institutions,
certain bankers' acceptances and federal funds. Subject to various restrictions,
the Savings Bank may also invest a portion of its assets in commercial paper and
corporate debt securities. The Savings Bank is also required to maintain an
investment in FHLB-Des Moines stock. The Savings Bank is required under federal
regulations to maintain a minimum amount of liquid assets. See "REGULATION."

     It is the intention of management to classify all securities in the
Company's investment portfolio as available for sale. SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," requires the investments
be categorized as "held to maturity," "trading securities" or "available for
sale," based on management's intent as to the ultimate disposition of each
security. SFAS No. 115 allows debt securities to be classified as "held to
maturity" and reported in financial statements at amortized cost only if the
reporting entity has the positive intent and ability to hold those securities to
maturity. Securities that might be sold in response to changes in market
interest rates, changes in the security's prepayment risk, increases in loan
demand, or other similar factors cannot be classified as "held to maturity."
Debt and equity securities held for current resale are classified as "trading
securities." Such securities are reported at fair value, and unrealized gains
and losses on such securities would be included in earnings. Debt and equity
securities not classified as either "held to maturity" or "trading securities"
are classified as "available for sale." Such securities are reported at fair
value, and unrealized gains and losses on such securities are excluded from
earnings and reported as a net amount in a separate component of equity.

                                      -13-
<PAGE>

     A committee consisting of the Chief Executive Officer, the Chief Financial
Officer and three outside Directors determines appropriate investments in
accordance with the Board of Directors' approved investment policies and
procedures.  The Company's investment policies generally limit investments to
U.S. Government and agency securities, municipal bonds, certificates of
deposits, marketable corporate debt obligations, mortgage-backed securities and
certain types of mutual funds.  The Company's investment policy does not permit
engaging directly in hedging activities or purchasing high risk mortgage
derivative products or corporate bonds rated less than BBB.  Investments are
made based on certain considerations, which include the interest rate, yield,
settlement date and maturity of the investment, the Company's liquidity
position, and anticipated cash needs and sources (which in turn include
outstanding commitments, upcoming maturities, estimated deposits and anticipated
loan amortization and repayments).  The effect that the proposed investment
would have on the Company's credit and interest rate risk, and risk-based
capital is also given consideration during the evaluation.

     The following table sets forth the composition of the Company's investment
and mortgage-backed securities portfolios at the dates indicated, all of which
were classified as available for sale.

<TABLE>
<CAPTION>
                                                                    At December 31,
                                       ----------------------------------------------------------------------------
                                                1999                      1998                      1997
                                       ------------------------  ------------------------  ------------------------
                                        Carrying    Percent of    Carrying    Percent of    Carrying    Percent of
                                          Value      Portfolio      Value      Portfolio      Value      Portfolio
                                       ----------  ------------  ----------  ------------  ----------  ------------
<S>                                    <C>         <C>           <C>         <C>           <C>         <C>
                                                                   (Dollars in Thousands)

Investment securities:
 U.S. Government and federal
    agency obligations ............     $ 5,619       45.36%       $ 3,869        21.84%     $ 5,806       26.79%
 Mutual funds .....................          --          --          5,310        29.97        5,376       24.81
                                        -------      ------        -------       ------      -------      ------
     Total investment securities ..       5,619       45.36          9,179        51.81       11,182       51.60
Mortgage-backed securities ........       6,768       54.64          8,536        48.19       10,489       48.40
                                        -------      ------        -------       ------      -------      ------

     Total available-for-sale .....     $12,387      100.00%       $17,715       100.00%     $21,671      100.00%
                                        =======      ======        =======       ======      =======      ======
</TABLE>

     The table below sets forth certain information regarding the carrying
value, weighted average yields and maturities or periods to repricing of the
Company's investment and mortgage-backed securities at December 31, 1999.

<TABLE>
<CAPTION>
                                                                    At December 31, 1999
                        ------------------------------------------------------------------------------------------------------------
                                                                Amount Due or Repricing Within:

                                One Year           Over One to           Over Five to          Over Ten
                                or Less            Five Years            Ten Years              Years                Totals
                        --------------------  --------------------  --------------------  --------------------  --------------------
                                    Weighted              Weighted              Weighted              Weighted              Weighted
                         Carrying   Average    Carrying   Average    Carrying   Average    Carrying   Average    Carrying   Average
                          Value      Yield      Value      Yield      Value      Yield      Value      Yield      Value      Yield
                        ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                                                     (Dollars in Thousands)
<S>                     <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
U.S. Government and
   federal agency
   obligations .......   $3,190      5.63%      $2,429     5.63%      $ --        --%        $ --       --%      $ 5,619     5.63%
Mortgage-backed
   securities ........    6,485      5.61           66     7.70        217      7.84           --       --         6,768     5.70
                         ------                 ------                ----                   ----                -------
     Total ...........   $9,675      5.61       $2,495     5.83       $217      7.84         $ --       --       $12,387     5.67
                         ======                 ======                ====                   ====                =======
</TABLE>

                                      -14-

<PAGE>

     Mortgage-Backed Securities. At December 31, 1999, the Company's net
mortgage-backed securities totaled $6.8 million at fair value ($7.0 million at
amortized cost) and had a weighted average yield of 5.70%. At December 31, 1999,
68.1% of the Company's mortgage-backed securities were adjustable-rate and 31.9%
were fixed-rate. The Company purchased most of its mortgage-backed securities in
1991 through 1993 and has not purchased any mortgage-backed securities since
that time. The Company currently intends to use available funds to invest in
higher yielding loans and does not intend to increase its mortgage-backed
securities portfolio.

     Mortgage-backed securities (which also are known as mortgage participation
certificates or pass-through certificates) typically represent a participation
interest in a pool of single-family or multi-family mortgages.  The principal
and interest payments on these mortgages are passed from the mortgage
originators, through intermediaries (generally U.S. Government agencies and
government sponsored enterprises) that pool and resell the participation
interests in the form of securities, to investors such as the Company.  Such
U.S. Government agencies and government sponsored enterprises, which guarantee
the payment of principal and interest to investors, primarily include Freddie
Mac, Fannie Mae and the Government National Mortgage Association.  Mortgage-
backed securities typically are issued with stated principal amounts, and the
securities are backed by pools of mortgages that have loans with interest rates
that fall within a specific range and have varying maturities.  Mortgage-backed
securities generally yield less than the loans that underlie such securities
because of the cost of payment guarantees and credit enhancements.  In addition,
mortgage-backed securities are usually more liquid than individual mortgage
loans and may be used to collateralize certain liabilities and obligations of
the Company.  These types of securities also permit the Company to optimize its
regulatory capital because they have low risk weighting.

     At December 31, 1999, $217,000 of the Company's mortgage-backed securities
had contractual maturities under ten years and the remainder had contractual
maturities over ten years. However, the actual maturity of a mortgage-backed
security may be less than its stated maturity due to prepayments of the
underlying mortgages. Prepayments that are faster than anticipated may shorten
the life of the security and may result in a loss of any premiums paid and
thereby reduce the net yield on such securities. Although prepayments of
underlying mortgages depend on many factors, including the type of mortgages,
the coupon rate, the age of mortgages, the geographical location of the
underlying real estate collateralizing the mortgages and general levels of
market interest rates, the difference between the interest rates on the
underlying mortgages and the prevailing mortgage interest rates generally is the
most significant determinant of the rate of prepayments. During periods of
declining mortgage interest rates, if the coupon rate of the underlying
mortgages exceeds the prevailing market interest rates offered for mortgage
loans, refinancing generally increases and accelerates the prepayment of the
underlying mortgages and the related security. Under such circumstances, the
Company may be subject to reinvestment risk because, to the extent that the
Company's mortgage-backed securities amortize or prepay faster than anticipated,
the Company may not be able to reinvest the proceeds of such repayments and
prepayments at a comparable rate.

Deposit Activities and Other Sources of Funds

     General.  Deposits and loan repayments are the major sources of the
Company's funds for lending and other investment purposes.  Scheduled loan
repayments are a relatively stable source of funds, while deposit inflows and
outflows and loan prepayments are influenced significantly by general interest
rates and money market conditions.  The Company may use borrowings through the
FHLB-Des Moines on a short-term basis to compensate for reductions in the
availability of funds from other sources.  Presently, the Company has no other
borrowing arrangements.

     Deposit Accounts.  Substantially all of the Company's depositors are
residents of the State of Missouri.  Deposits are attracted from within the
Company's market area through the offering of a broad selection of deposit
instruments, including negotiable order of withdrawal ("NOW") accounts, money
market deposit accounts, regular savings accounts, certificates of deposit and
retirement savings plans.  Deposit account terms vary, according to the minimum
balance required, the time periods the funds must remain on deposit and the
interest rate, among other factors.  In determining the terms of its deposit
accounts, the Company considers current market interest rates, profitability to
the Company, matching deposit and loan products and its customer preferences and
concerns.  The Company reviews

                                      -15-

<PAGE>

its deposit mix and pricing weekly. The Company does not accept brokered
deposits, nor has it aggressively sought jumbo certificates of deposit.

     The Company currently offers certificates of deposit for terms not
exceeding 48 months.  As a result, the Company believes that it is better able
to match the repricing of its liabilities to the repricing of its loan
portfolio.

     The following table indicates the amount of the Company's jumbo
certificates of deposit by time remaining until maturity as of December 31,
1999.  Jumbo certificates of deposit are certificates in amounts of $100,000 or
more.

<TABLE>
<CAPTION>
                Maturity Period                            Amount
                ---------------                            ------
                                                       (In Thousands)
<S>                                                       <C>
Three months or less ...........................           $ 814
Over three through six months ..................             917
Over six through 12 months .....................             184
Over 12 months .................................             460
                                                           -----
     Total jumbo certificates of deposit .......          $2,375
                                                          ======
</TABLE>

       The following table sets forth the balances (inclusive of interest
credited) and changes in dollar amounts of deposits in the various types of
accounts offered by the Company between the dates indicated.

<TABLE>
<CAPTION>
                                                                                     At December 31,
                                       ------------------------------------------------------------------------------------------
                                                  1999                               1998                                 1997
                                       ------------------------------------------------------------------------------------------
                                                   Percent                             Percent                           Percent
                                                     of       Increase                   of        Increase                 of
                                       Amount      Total     (Decrease)    Amount        Total     (Decrease)    Amount    Total
                                     ---------   --------   ----------   ---------    --------     ----------    -------  --------
<S>                                   <C>        <C>         <C>           <C>        <C>           <C>       <C>        <C>
                                                                        (Dollars in Thousands)

Noninterest-bearing accounts.........  $ 1,214     1.76%      $   233     $   945       1.30%       $    501     $   480    0.66%
NOW checking accounts................    4,511     6.55            92       4,419       6.08             404       4,015    5.51
Regular savings accounts ............    5,956     8.64          (416)      6,408       8.82            (366)      6,738    9.25
Money market deposit accounts
 ("MMDAs") ..........................    6,523     9.47           257       6,266       8.62             926       5,340    7.33
Fixed-rate certificates which mature:
 Within 1 year ......................   37,438    54.33        (2,268)     39,706      54.62            (683)     40,389   55.41
 After 1 year, but within 2 years ...    8,711    12.64        (4,500)     13,211      18.17           4,482       8,729   11.97
 After 2 years, but within 5 years ..    4,554     6.61         2,820       1,734       2.39         ( 5,458)      7,192    9.87
                                       -------   ------       -------     -------     ------        --------     -------  ------
          Total deposits ............  $68,907   100.00%      $(3,782)    $72,689     100.00%       $   (194)    $72,883  100.00%
                                       =======   ======       =======     =======     ======        ========     =======  ======
</TABLE>

  The following table sets forth the Company's time deposits categorized by
rates at the dates indicated.

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                       ---------------------------------------------
                                                            1999             1998            1997
                                                       ------------     ------------    ------------
<S>                                                      <C>              <C>             <C>
                                                                       (In Thousands)

0.00 - 3.99% .........................................    $    10          $    13         $    13
4.00 - 4.99% .........................................     26,457           11,051             471
5.00 - 5.99% .........................................     23,727           39,523          49,273
6.00 - 6.99% .........................................        509            3,981           6,474
7.00 - 7.99% .........................................         --               83              78
                                                          -------          -------         -------
    Total                                                 $50,703          $54,651         $56,309
                                                          =======          =======         =======
</TABLE>

                                      -16-
<PAGE>

     The following table sets forth the amount and maturities of time deposits
at December 31, 1999.

<TABLE>
<CAPTION>
                                                                                Amount Due
                                              ------------------------------------------------------------------------------
                                                Less Than           1 - 2           2 - 3          3 Years
                                                 One Year           Years           Years         and After        Total
                                              ------------     -------------    ------------    ------------    ------------
                                                                              (In Thousands)
<S>                                             <C>               <C>             <C>             <C>            <C>
0.00 - 3.99% .............................      $    10            $   --          $   --          $   --         $    10
4.00 - 4.99% .............................       21,683             3,070             574           1,129          26,457
5.00 - 5.99% .............................       15,410             5,467           1,926             925          23,727
6.00 - 6.99% .............................          334               175              --              --             509
                                                -------            ------          ------          ------         -------
       Total .............................      $37,437            $8,712          $2,500          $2,054         $50,703
                                                =======            ======          ======          ======         =======
</TABLE>

     The following table sets forth the deposit activities of the Company for
the periods indicated.

<TABLE>
<CAPTION>
                                                  Year Ended December 31,
                                        ----------------------------------------
                                            1999          1998          1997
                                        ------------  ------------  ------------
<S>                                       <C>           <C>           <C>
                                                     (In Thousands)

Beginning balance .....................      $72,689       $72,883       $72,880
Net deposits (withdrawals)
   before interest credited ...........       (6,398)       (3,101)       (2,905)
Interest credited .....................        2,616         2,907         2,908
                                             -------       -------       -------
Net increase (decrease) in deposits ...       (3,782)         (194)            3
                                             -------       -------       -------
Ending balance ........................      $68,907       $72,689       $72,883
                                             =======       =======       =======
</TABLE>

     Borrowings.  The Company has the ability to use advances from the FHLB-Des
Moines to supplement its supply of lendable funds and to meet deposit withdrawal
requirements.  The FHLB-Des Moines functions as a central reserve bank providing
credit for savings associations and certain other member financial institutions.
As a member of the FHLB-Des Moines, the Company is required to own capital stock
in the FHLB-Des Moines and is authorized to apply for advances on the security
of such stock and certain of its mortgage loans and other assets (principally
securities that are obligations of, or guaranteed by, the U.S. Government)
provided certain creditworthiness standards have been met.  Advances are made
pursuant to several different credit programs.  Each credit program has its own
interest rate and range of maturities.  Depending on the program, limitations on
the amount of advances are based on the financial condition of the member
institution and the adequacy of collateral pledged to secure the credit.  At
December 31, 1999, the Company had $794,000 borrowed from the FHLB-Des Moines.
The Company borrowed $600,000 on a mortgage match advance in October 1997 to
fund a loan on commercial property with a yield to the Company of 8.50%.

                                      -17-

<PAGE>

  The following table sets forth certain information regarding short-term
borrowings by the Company at the dates and for the periods indicated:

<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                  ------------------------------------------------
                                                                       1999              1998              1997
                                                                  ------------     -------------     -------------
                                                                                 (Dollars in Thousands)
<S>                                                                 <C>              <C>               <C>
Amount of FHLB advances outstanding at end of period ..........      $ 794              $ 571             $ 596
Maximum amount of FHLB advances outstanding
   at any month end ...........................................        794                594               600
Approximate average FHLB advances outstanding
   during the period ..........................................        568                584               164
Approximate weighted average rate paid on
   FHLB advances during the period ............................       6.33%              6.51%             6.10%
Weighted average rate paid on FHLB advances at end of period ..       6.35%              6.35%             6.35%
</TABLE>

Personnel

     As of December 31, 1999, the Company had 24 full-time and four part-time
employees.  The employees are not represented by a collective bargaining unit.
The Company believes its relationship with its employees is good.

Subsidiary Activities

     Federal savings associations generally may invest up to 3% of their assets
in service corporations, provided that at least one-half of any amount in excess
of 2% is used primarily for community, inner-city and community development
projects.  The Savings Bank's investment in its service corporation, Parity
Insurance Agency, Inc. ("Parity"), did not exceed these limits at December 31,
1999.  Parity previously sold mortgage life and disability insurance to the
Savings Bank's borrowers and continues to collect commissions.  Parity also owns
City National Real Estate, Inc., which is inactive.  At December 31, 1999, the
Savings Bank's investment in its subsidiaries was $107,000.

     In 1999, the Company terminated its joint venture for the development of
the Briar Pointe subdivision in Waynesville, Missouri and acquired 100%
ownership of Briar Point Development, L.L.C., which owns the subdivision.  At
December 31, 1999, 97 lots remained to be developed and 19 lots had been sold.

                          REGULATION AND SUPERVISION
General

     As a savings and loan holding company, the Company is required by federal
law to file reports with, and otherwise comply with, the rules and regulations
of the OTS.  The Savings Bank is subject to extensive regulation, examination
and supervision by the OTS, as its primary federal regulator, and the FDIC, as
the deposit insurer.  The Savings Bank is a member of the FHLB System and its
deposit accounts are insured up to applicable limits by the SAIF managed by the
FDIC.  The Savings Bank must file reports with the OTS and the FDIC concerning
its activities and financial condition in addition to obtaining regulatory
approvals prior to entering into certain transactions such as mergers with, or
acquisitions of, other savings institutions.  The OTS and/or the FDIC conduct
periodic examinations to test the Savings Bank's safety and soundness and
compliance with various regulatory requirements.  This regulation and
supervision establishes a comprehensive framework of activities in which an
institution can engage and is intended primarily for the protection of the
insurance fund and depositors.  The regulatory structure also gives the
regulatory authorities extensive discretion in connection with their supervisory
and enforcement activities and examination policies, including policies with
respect to the classification of assets and the establishment of adequate loan
loss reserves for
                                      -18-

<PAGE>

regulatory purposes.  Any change in such regulatory
requirements and policies, whether by the OTS, the FDIC or the Congress, could
have a material adverse impact on the Company, the Savings Bank and their
operations.  Certain of the regulatory requirements applicable to the Savings
Bank and to the Company are referred to below or elsewhere herein.  The
description of statutory provisions and regulations applicable to savings
institutions and their holding companies set forth in this report does not
purport to be a complete description of such statutes and regulations and their
effects on the Savings Bank and the Company.

Holding Company Regulation

     The Company is a nondiversified unitary savings and loan holding company
within the meaning of federal law.  As a unitary savings and loan holding
company, the Company generally is not restricted under existing laws as to the
types of business activities in which it may engage, provided that the Savings
Bank continues to be a qualified thrift lender.  See "Federal Savings
Institution Regulation - QTL Test."  Upon any non-supervisory acquisition by the
Company of another savings institution or savings bank that meets the qualified
thrift lender test and is deemed to be a savings institution by the OTS, the
Company would become a multiple savings and loan holding company (if the
acquired institution is held as a separate subsidiary) and would generally be
limited to activities permissible for bank holding companies under Section
4(c)(8) of the Bank Holding Company Act, subject to the prior approval of the
OTS, and certain activities authorized by OTS regulation.

     A savings and loan holding company is prohibited from, directly or
indirectly, acquiring more than 5% of the voting stock of another savings
institution or savings and loan holding company, without prior written approval
of the OTS and from acquiring or retaining control of a depository institution
that is not insured by the FDIC.  In evaluating applications by holding
companies to acquire savings institutions, the OTS considers the financial and
managerial resources and future prospects of the company and institution
involved, the effect of the acquisition on the risk to the deposit insurance
funds, the convenience and needs of the community and competitive factors.

     The OTS may not approve any acquisition that would result in a multiple
savings and loan holding company controlling savings institutions in more than
one state, subject to two exceptions: (i) the approval of interstate supervisory
acquisitions by savings and loan holding companies and (ii) the acquisition of a
savings institution in another state if the laws of the state of the target
savings institution specifically permit such acquisitions.  The states vary in
the extent to which they permit interstate savings and loan holding company
acquisitions.

     Although savings and loan holding companies are not subject to specific
capital requirements or specific restrictions on the payment of dividends or
other capital distributions, federal regulations do prescribe such restrictions
on subsidiary savings institutions as described below. The Savings Bank must
notify the OTS 30 days before declaring any dividend to the Company.  In
addition, the financial impact of a holding company on its subsidiary
institution is a matter that is evaluated by the OTS and the agency has
authority to order cessation of activities or divestiture of subsidiaries deemed
to pose a threat to the safety and soundness of the institution.

Federal Savings Institution Regulation

     Business Activities.  The activities of federal savings institutions are
governed by federal law and regulations.  These laws and regulations delineate
the nature and extent of the activities in which federal associations may
engage.  In particular, many types of lending authority for federal association,
e.g., commercial, non-residential real property loans and consumer loans, are
limited to a specified percentage of the institution's capital or assets.

     Capital Requirements.  The OTS capital regulations require savings
institutions to meet three minimum capital standards: a 1.5% tangible capital
ratio, a 4% leverage ratio and an 8% risk-based capital ratio.  In addition, the
prompt corrective action standards discussed below also establish, in effect, a
minimum 2% tangible capital standard, a 4% leverage ratio (3% for institutions
receiving the highest rating on the CAMEL financial institution rating system),
and, together with the risk-based capital standard itself, a 4% Tier 1 risk-
based capital standard.  The OTS regulations also require that, in meeting the
tangible, leverage and risk-based capital standards, institutions must generally
deduct

                                      -19-

<PAGE>

investments in and loans to subsidiaries engaged in activities as principal that
are not permissible for a national bank.

     The risk-based capital standard for savings institutions requires the
maintenance of Tier 1 (core) and total capital (which is defined as core capital
and supplementary capital) to risk-weighted assets of at least 4% and 8%,
respectively.  In determining the amount of risk-weighted assets, all assets,
including certain off-balance sheet assets, are multiplied by a risk-weight
factor of 0% to 100%, assigned by the OTS capital regulation based on the risks
believed inherent in the type of asset.  Core (Tier 1) capital is defined as
common stockholders' equity (including retained earnings), certain noncumulative
perpetual preferred stock and related surplus, and minority interests in equity
accounts of consolidated subsidiaries less intangibles other than certain
mortgage servicing rights and credit card relationships.  The components of
supplementary capital currently include cumulative preferred stock, long-term
perpetual preferred stock, mandatory convertible securities, subordinated debt
and intermediate preferred stock, the allowance for loan and lease losses
limited to a maximum of 1.25% of risk-weighted assets and up to 45% of
unrealized gains on available-for-sale equity securities with readily
determinable fair market values.  Overall, the amount of supplementary capital
included as part of total capital cannot exceed 100% of core capital.

     The capital regulations also incorporate an interest rate risk component.
Savings institutions with "above normal" interest rate risk exposure are subject
to a deduction from total capital for purposes of calculating their risk-based
capital requirements.  For the present time, the OTS has deferred implementation
of the interest rate risk component.  At December 31, 1999, the Savings Bank met
each of its capital requirements.

     Prompt Corrective Regulatory Action.  The OTS is required to take certain
supervisory actions against undercapitalized institutions, the severity of which
depends upon the institution's degree of undercapitalization.  Generally, a
savings institution that has a ratio of total capital to risk weighted assets of
less than 8%, a ratio of Tier 1 (core) capital to risk-weighted assets of less
than 4% or a ratio of core capital to total assets of less than 4% (3% or less
for institutions with the highest examination rating) is considered to be
"undercapitalized."  A savings institution that has a total risk-based capital
ratio less than 6%, a Tier 1 capital ratio of less than 3% or a leverage ratio
that is less than 3% is considered to be "significantly undercapitalized" and a
savings institution that has a tangible capital to assets ratio equal to or less
than 2% is deemed to be "critically undercapitalized."  Subject to a narrow
exception, the OTS is required to appoint a receiver or conservator for an
institution that is "critically undercapitalized."  The regulation also provides
that a capital restoration plan must be filed with the OTS within 45 days of the
date a savings institution receives notice that it is "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized."  Compliance
with the plan must be guaranteed by any parent holding company.  In addition,
numerous mandatory supervisory actions become immediately applicable to an
undercapitalized institution, including, but not limited to, increased
monitoring by regulators and restrictions on growth, capital distributions and
expansion.  The OTS could also take any one of a number of discretionary
supervisory actions, including the issuance of a capital directive and the
replacement of senior executive officers and directors.

     Insurance of Deposit Accounts.  Deposits of the Savings Bank are presently
insured by the SAIF.  The FDIC maintains a risk-based assessment system by which
institutions are assigned to one of three categories based on their
capitalization and one of three subcategories based on examination ratings and
other supervisory information.  An institution's assessment rate depends upon
the categories to which it is assigned.  Assessment rates for SAIF member
institutions are determined semiannually by the FDIC and currently range from
zero basis points for the healthiest institutions to 27 basis points for the
riskiest.

     In addition to the assessment for deposit insurance, institutions are
required to make payments on bonds issued in the late 1980s by the Financing
Corporation ("FICO") to recapitalize the predecessor to the SAIF.  During 1999,
FICO payments for SAIF members approximated 6.10 basis points, while Bank
Insurance Fund ("BIF") members paid 1.22 basis points.  By law, there is equal
sharing of FICO payments between SAIF and BIF members beginning January 1, 2000.

                                      -20-

<PAGE>

     The FDIC has authority to increase insurance assessments.  A significant
increase in SAIF insurance premiums would likely have an adverse effect on the
operating expenses and results of operations of the Savings Bank.  Management
cannot predict what insurance assessment rates will be in the future.

     Insurance of deposits may be terminated by the FDIC upon a finding that the
institution has engaged in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC or the OTS.  The
management of the Savings Bank does not know of any practice, condition or
violation that might lead to termination of deposit insurance.

     Loans to One Borrower.  Federal law provides that savings institutions are
generally subject to the limits on loans to one borrower applicable to national
banks.  A savings institution may not make a loan or extend credit to a single
or related group of borrowers in excess of 15% of its unimpaired capital and
surplus.  An additional amount may be lent, equal to 10% of unimpaired capital
and surplus, if secured by specified readily-marketable collateral.  At December
31, 1999, the Savings Bank's limit on loans to one borrower was $2.7 million,
and the Savings Bank's largest aggregate outstanding balance of loans to one
borrower was $2.5 million.

     QTL Test.  Federal law requires savings institutions to meet a qualified
thrift lender test.  Under the test, a savings association is required to either
qualify as a "domestic building and loan association" under the Internal Revenue
Code or maintain at least 65% of its "portfolio assets" (total assets less: (i)
specified liquid assets up to 20% of total assets; (ii) intangibles, including
goodwill; and (iii) the value of property used to conduct business) in certain
"qualified thrift investments" (primarily residential mortgages and related
investments, including certain mortgage-backed securities) in at least nine
months out of each 12 month period.

     A savings institution that fails the qualified thrift lender test is
subject to certain operating restrictions and may be required to convert to a
bank charter.  As of December 31, 1999, the Savings Bank met the qualified
thrift lender test.  Recent legislation has expanded the extent to which
education loans, credit card loans and small business loans may be considered
"qualified thrift investments."

     Limitation on Capital Distributions.  OTS regulations impose limitations
upon all capital distributions by a savings institution, including cash
dividends, payments to repurchase its shares and payments to shareholders of
another institution in a cash-out merger.  Under the current regulations, an
application to and the prior approval of the OTS will be required prior to any
capital distribution if the institution does not meet the criteria for
"expedited treatment" of applications under OTS regulations (i.e., generally,
examination ratings in the two top categories), the total capital distributions
for the calendar year exceed net income for that year plus the amount of
retained net income for the preceding two years, the institution would be
undercapitalized following the distribution or the distribution would otherwise
be contrary to a statute, regulation or agreement with OTS.  If an application
is not required, the institution must still provide prior notice to OTS of the
capital distribution.  In the event the Savings Bank's capital fell below its
regulatory requirements or the OTS notified it that it was in need of more than
normal supervision, the Savings Bank's ability to make capital distributions
could be restricted.  In addition, the OTS could prohibit a proposed capital
distribution by any institution, which would otherwise be permitted by the
regulation, if the OTS determines that such distribution would constitute an
unsafe or unsound practice.

     Liquidity.  The Savings Bank is required to maintain an average daily
balance of specified liquid assets equal to a monthly average of not less than a
specified percentage of its net withdrawable deposit accounts plus short-term
borrowings.  This liquidity requirement is currently 4%, but may be changed from
time to time by the OTS to any amount within the range of 4% to 10%.  Monetary
penalties may be imposed for failure to meet these liquidity requirements.  The
Savings Bank's liquidity ratio at December 31, 1999 exceeded the applicable
requirements. The Savings Bank has never been subject to monetary penalties for
failure to meet its liquidity requirements.

     Assessments.  Savings institutions are required to pay assessments to the
OTS to fund the agency's operations.  The general assessments, paid on a semi-
annual basis, are computed upon the savings institution's total assets,
including consolidated subsidiaries, as reported in the Savings Bank's latest
quarterly thrift financial report.

                                      -21-

<PAGE>

     Transactions with Related Parties.  The Savings Bank's authority to engage
in transactions with "affiliates" (e.g., any company that controls or is under
common control with an institution, including the Company and its non-savings
institution subsidiaries) is limited by federal law.  The aggregate amount of
covered transactions with any individual affiliate is limited to 10% of the
capital and surplus of the savings institution.  The aggregate amount of covered
transactions with all affiliates is limited to 20% of the savings institution's
capital and surplus.  Certain transactions with affiliates are required to be
secured by collateral in an amount and of a type described in federal law.  The
purchase of low quality assets from affiliates is generally prohibited.  The
transactions with affiliates must be on terms and under circumstances, that are
at least as favorable to the institution as those prevailing at the time for
comparable transactions with non-affiliated companies.  In addition, savings
institutions are prohibited from lending to any affiliate that is engaged in
activities that are not permissible for bank holding companies and no savings
institution may purchase the securities of any affiliate other than a
subsidiary.

     The Savings Bank's authority to extend credit to executive officers,
directors and 10% shareholders ("insiders"), as well as entities such persons
control, is also governed by federal law.  Such loans are required to be made on
terms substantially the same as those offered to unaffiliated individuals and
not involve more than the normal risk of repayment.  Recent legislation created
an exception for loans made pursuant to a benefit or compensation program that
is widely available to all employees of the institution and does not give
preference to insiders over other employees.  The law limits both the individual
and aggregate amount of loans the Savings Bank may make to insiders based, in
part, on the Savings Bank's capital position and requires certain board approval
procedures to be followed.

     Enforcement.  The OTS has primary enforcement responsibility over savings
institutions and has the authority to bring actions against the institution and
all institution-affiliated parties, including stockholders, and any attorneys,
appraisers and accountants who knowingly or recklessly participate in wrongful
action likely to have an adverse effect on an insured institution.  Formal
enforcement action may range from the issuance of a capital directive or cease
and desist order to removal of officers and/or directors to institution of
receivership, conservatorship or termination of deposit insurance.  Civil
penalties cover a wide range of violations and can amount to $25,000 per day, or
even $1 million per day in especially egregious cases.  The FDIC has the
authority to recommend to the Director of the OTS that enforcement action to be
taken with respect to a particular savings institution.  If action is not taken
by the Director, the FDIC has authority to take such action under certain
circumstances.  Federal law also establishes criminal penalties for certain
violations.

     Standards for Safety and Soundness.  The federal banking agencies have
adopted Interagency Guidelines prescribing Standards for Safety and Soundness.
The guidelines set forth the safety and soundness standards that the federal
banking agencies use to identify and address problems at insured depository
institutions before capital becomes impaired.  If the OTS determines that a
savings institution fails to meet any standard prescribed by the guidelines, the
OTS may require the institution to submit an acceptable plan to achieve
compliance with the standard.

Federal Home Loan Bank System

     The Savings Bank is a member of the Federal Home Loan Bank System, which
consists of 12 regional Federal Home Loan Banks.  The Federal Home Loan Bank
provides a central credit facility primarily for member institutions.  The
Savings Bank, as a member of the Federal Home Loan Bank, is required to acquire
and hold shares of capital stock in that Federal Home Loan Bank in an amount at
least equal to 1.0% of the aggregate principal amount of its unpaid residential
mortgage loans and similar obligations at the beginning of each year, or 1/20 of
its advances (borrowings) from the Federal Home Loan Bank, whichever is greater.
The Savings Bank was in compliance with this requirement with an investment in
Federal Home Loan Bank stock at December 31, 1999, of $663,000.  Federal Home
Loan Bank advances must be secured by specified types of collateral.

     The Federal Home Loan Banks are required to provide funds for the
resolution of insolvent thrifts in the late 1980s and to contribute funds for
affordable housing programs.  These requirements could reduce the amount of
dividends that the Federal Home Loan Banks pay to their members and could also
result in the Federal Home Loan Banks imposing a higher rate of interest on
advances to their members.  If dividends were reduced, or interest on future

                                      -22-

<PAGE>

FHLB advances increased, The Savings Bank's net interest income would likely
also be reduced. Recent legislation has changed the structure of the Federal
Home Loan Banks funding obligations for insolvent thrifts, revised the capital
structure of the Federal Home Loan Banks and implemented entirely voluntary
membership for Federal Home Loan Banks. Management cannot predict the effect
that these changes may have with respect to its FHLB membership.

Federal Reserve System

     The Federal Reserve Board regulations require savings institutions to
maintain non-interest earning reserves against their transaction accounts
(primarily NOW and regular checking accounts).  The regulations generally
provide that reserves be maintained against aggregate transaction accounts as
follows: for accounts aggregating $44.3 million or less (subject to adjustment
by the Federal Reserve Board) the reserve requirement is 3%; and for accounts
aggregating greater than $44.3 million, the reserve requirement is $1.329
million plus 10% (subject to adjustment by the Federal Reserve Board between 8%
and 14%) against that portion of total transaction accounts in excess of $44.3
million.  The first $4.9 million of otherwise reservable balances (subject to
adjustments by the Federal Reserve Board) are exempted from the reserve
requirements.  The Savings Bank complies with the foregoing requirements.

                          FEDERAL AND STATE TAXATION

Federal Taxation

     General.  The Company and the Savings Bank report their income on a fiscal
year, consolidated basis and the accrual method of accounting, and are subject
to federal income taxation in the same manner as other corporations with some
exceptions, including particularly the Savings Bank's reserve for bad debts
discussed below.  The following discussion of tax matters is intended only as a
summary and does not purport to be a comprehensive description of the tax rules
applicable to the Savings Bank or the Company. The Savings Bank has not been
audited by the IRS in the last five years.  For its 1999 taxable year, the
Savings Bank is subject to a maximum federal income tax rate of 34%.

     Bad Debt Reserves.  For fiscal years beginning prior to December 31, 1995,
thrift institutions which qualified under certain definitional tests and other
conditions of the Internal Revenue Code were permitted to use certain favorable
provisions to calculate their deductions from taxable income for annual
additions to their bad debt reserve.  A reserve could be established for bad
debts on qualifying real property loans (generally secured by interests in real
property improved or to be improved) under (i) the percentage of taxable income
method or (ii) the experience method.  The reserve for nonqualifying loans was
computed using the experience method.

     Congress repealed the reserve method of accounting for bad debts for tax
years beginning after 1995 and required savings institutions to recapture (i.e.,
take into income) certain portions of their accumulated bad debt reserves.
Thrift institutions eligible to be treated as "small banks" (assets of $500
million or less) are allowed to use the experience method applicable to such
institutions, while thrift institutions that are treated as large banks (assets
exceeding $500 million) are required to use only the specific charge-off method.
Thus, the percentage of taxable income method of accounting for bad debts is no
longer available for any financial institution.

     A thrift institution required to change its method of computing reserves
for bad debts will treat such change as a change in method of accounting,
initiated by the taxpayer, and having been made with the consent of the Internal
Revenue Service.  Any Section 481(a) adjustment required to be taken into income
with respect to such change generally will be taken into income ratably over a
six-taxable year period, beginning with the first taxable year beginning after
1995, subject to a two year suspension if the "residential loan requirement" is
satisfied.

     Under the residential loan requirement provision, the required recapture
will be suspended for each of two successive taxable years, beginning with the
Savings Bank's 1996 taxable year, in which the Savings Bank originates a minimum
of certain residential loans based upon the average of the principal amounts of
such loans made by the Savings Bank during its six taxable years preceding its
current taxable year.

                                      -23-

<PAGE>

     The Savings Bank is required to recapture (i.e., take into income) over a
six year period the excess of the balance of its tax bad debt reserves as of
December 31, 1995 over the balance of such reserves as of December 31, 1987.  As
a result of such recapture, the Savings Bank will incur an additional tax
liability of approximately $76,000 which has been taken into income since 1998
over a six year period.

     Distributions.  If the Savings Bank makes "non-dividend distributions" to
the Company, such distributions will be considered to have been made from the
Savings Bank's unrecaptured tax bad debt reserves (including the balance of its
reserves as of December 31, 1987) to the extent thereof, and then from the
Savings Bank's supplemental reserve for losses on loans, to the extent thereof,
and an amount based on the amount distributed (but not in excess of the amount
of such reserves) will be included in the Savings Bank's income.  Non-dividend
distributions include distributions in excess of the Savings Bank's current and
accumulated earnings and profits, as calculated for federal income tax purposes,
distributions in redemption of stock, and distributions in partial or complete
liquidation.  Dividends paid out of the Savings Bank's current or accumulated
earnings and profits will not be so included in the Savings Bank's income.

     The amount of additional taxable income triggered by a non-dividend is an
amount that, when reduced by the tax attributable to the income, is equal to the
amount of the distribution.  Thus, if the Savings Bank makes a non-dividend
distribution to the Company, approximately one and one-half times the amount of
such distribution (but not in excess of the amount of such reserves) would be
includable in income for federal income tax purposes, assuming a 35% federal
corporate income tax rate.  The Savings Banks do not intend to pay dividends
that would result in a recapture of any portion of its bad debt reserves.

State Taxation

     Missouri.  Missouri-based thrift institutions, such as the Savings Bank,
are subject to a special financial institutions tax, based on net income without
regard to net operating loss carryforwards, at the rate of 7% of net income.
This tax is in lieu of certain other state taxes on thrift institutions, on
their property, capital or income, except taxes on tangible personal property
owned by the Savings Bank and held for lease or rental to others and on real
estate, contributions paid pursuant to the Unemployment Compensation Law of
Missouri, social security taxes, sales taxes and use taxes.  In addition, the
Savings Bank is entitled to credit against this tax all paid to the State of
Missouri or any political subdivision, except taxes on tangible personal
property owned by the Savings Bank and held for lease or rental to others and on
real estate, contributions paid pursuant to the Unemployment Compensation Law of
Missouri, social security taxes, sales and use taxes, and taxes imposed by the
Missouri Financial Institutions Tax Law.  Missouri thrift institutions are not
subject to the regular corporate income tax.

     Delaware.  As a Delaware holding company not earning income in Delaware,
the Company is exempted from Delaware corporate income tax, but is required to
file an annual report with, and pay an annual franchise tax to, the State of
Delaware.

Item 2.  Description of Property
--------------------------------

     The Company operates five full service facilities in Jefferson City (2),
California, Tipton and St. Robert, Missouri, all of which it owns.  At December
31, 1999, the net book value of the property (including land and building) and
the Company's fixtures, furniture and equipment was $1.5 million.

Item 3.  Legal Proceedings
--------------------------

     Periodically, there have been various claims and lawsuits involving the
Savings Bank, such as claims to enforce liens, condemnation proceedings on
properties on which the Savings Bank holds security interests, claims involving
the making and servicing of real property loans and other issues incident to the
Savings Bank's business.  Neither the Company nor the Savings Bank is a party to
any pending legal proceedings that it believes would have a material adverse
effect on the financial condition or operations of the Company.

                                      -24-

<PAGE>

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

     No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1999.

                                    PART II

Item 5.  Market for Common Equity and Related Stockholder Matters
------------------------------------------------------------------

     The common stock of the Company is listed on the Nasdaq SmallCap Market
under the symbol "CNSB."  The table below shows the price range of common stock
for the calendar years of 1999 and 1998.  This information was provided by the
Nasdaq Stock Market.

<TABLE>
<CAPTION>
                                                Common Stock
                                -----------------------------------------------
                                     High            Low            Dividends
                                ------------    ------------     --------------
<S>                               <C>             <C>              <C>
Fiscal 1998
   First Quarter............         $19.000         $17.500        $ 0.06
   Second Quarter...........          18.250          17.500          0.06
   Third Quarter............          17.625          13.250          0.075
   Fourth Quarter...........          13.500          11.125          0.075

Fiscal 1999
   First Quarter............          13.500          10.500          0.075
   Second Quarter...........          12.500          10.375          0.075
   Third Quarter............          12.250           9.625          0.09
   Fourth Quarter...........          16.688          11.065          0.09
</TABLE>

     Dividend payment decisions are made based on a variety of factors including
earnings, financial condition, market considerations, and regulatory
restrictions.  Restrictions on dividend payments are described on Note 13 of the
Notes to Consolidated Financial Statements included in this report.

     As of December 31, 1999 the Company had approximately 392 stockholders of
record and 1,418,286 outstanding shares of common stock.

Item 6.  Management's Discussion and Analysis of Financial Condition and
-------------------------------------------------------------------------
         Results of Operations or Plan of Operations
         -------------------------------------------

     The Company's results of operations primarily depend upon the difference
(or "spread") between the average yield earned on loans, mortgage-backed
securities and investment securities and the average rate paid on deposits and
borrowings, as well as the relative amounts of such assets and liabilities.  The
interest rate spread is affected by regulatory, economic and competitive factors
that influence interest rates, loan demand and deposit flows.  The Company, like
other thrift institutions, is subject to interest-rate risk to the degree that
its interest-earning assets mature or reprice at different times, or on a
different basis, than its interest-bearing liabilities.

     The Company's results of operations are also affected by, among other
things, provision for loan losses, loan servicing income, fee income, income
from real estate owned, gain on sale of assets, other expenses and income taxes.
Other expenses include compensation and benefits, occupancy and equipment,
federal deposit insurance premiums and other general expenses.

                                      -25-
<PAGE>

     The Company is significantly affected by prevailing economic conditions
including federal monetary and fiscal policies as well as by federal regulation
of financial institutions.  Deposit balances are influenced by a number of
factors including interest rates paid on competing investments and the level of
personal income and savings within the Company's market area.  Lending
activities are influenced by consumer demand as well as competition from other
lending institutions.  The primary sources of funds for the Company's lending
activities include deposits, loan payments, borrowings, and funds provided by
operations.

Financial Condition at December 31, 1999 compared to December 31, 1998.

     The Company's total assets decreased $3.6 million, or 3.81%, to $91.8
million at December 31, 1999 from $95.4 million at December 31, 1998.  The
decrease was primarily attributable to a $5.3 million decrease in securities
available-for-sale, a $1.8 million decrease in loans held-for-sale and a
$224,000 decrease in other assets, offset by a $907,000 increase in cash and due
from depository institutions, a $2.6 million increase in net loans receivable
and a $378,000 increase in income tax receivable.

     Cash and due from depository institutions increased 9.24% to $10.7 million
at December 31, 1999 from $9.8 million at December 31, 1998 due primarily to
loan repayments and maturity or sale of investment securities.

     Securities available-for-sale decreased 30.08%, to $12.4 million at
December 31, 1999 from $17.7 million at December 31, 1998 due to the sale of
mutual funds in 1999.  The sale of the mutual funds was required by the
Agreement and Plan of Merger with Exchange.

     The Company had no loans held-for-sale at December 31, 1999 compared to
$1.8 million at December 31, 1998.  The Company did not sell any loans during
the last part of 1999 due to the rise in interest rates.

     Net loans receivable increased 4.15% to $64.3 million at December 31, 1999
from $61.7 million at December 31, 1998.  The increase in loans receivable was
primarily the result of strong loan originations and purchases and fewer loan
sales in 1999.  During 1999 the Company originated and purchased $17.9 million
of one- to four-family residential mortgage loans, $9.0 million of other
residential and nonresidential mortgage loans and $8.1 million of nonmortgage
loans.

     Income tax receivable increased to $545,000 at December 31, 1999 from
$166,356 at December 31, 1998.  The increase is primarily due to the tax benefit
from the loss of the sale of mutual funds in 1999.

     Other assets decreased $224,000 to $469,000 at December 31, 1999 from
$693,000 at December 31, 1998.  The primary reason for the decrease is the
dissolution of the Bales Brothers, Inc. joint venture during 1999.

     Deposits decreased $3.8 million to $68.9 million at December 31, 1999 from
$72.7 million at December 31, 1998.  The primary reason for the decrease is a
general shift in investments by customers out of insured deposit accounts into
equity investments.

Comparison of Operating Results for the Years Ended December 31, 1999 and 1998

     Net Income.  The Company's net income decreased $799,000 to $63,000 for the
year ended December 31, 1999 from $862,000 for the year ended December 31, 1998.
The change was primarily the result of a pre-tax loss of $755,000 on the sale of
mutual funds, which was required under the terms of the Company's pending merger
with Exchange.  Diluted earnings per share decreased to $0.05 for the year ended
December 31, 1999 from $0.54 for the year ended December 31, 1998.

     Net Interest Income.  Net interest income decreased $150,000, or 6.08%, to
$3.1 million for the year ended December 31, 1999 from $3.3 million for the year
ended December 31, 1998.  Total interest income decreased $528,000, or 10.19%,
to $6.4 million for the year ended December 31, 1999 from $6.9 million for the
year ended

                                      -26-
<PAGE>

December 31, 1998. The decrease in total interest income was primarily due to a
decrease in interest income from mortgage loans, investment securities and
mortgage-backed securities offset by an increase in interest income from
consumer and other loans and other interest-earnings assets. Interest income
from mortgage loans, investment securities and mortgage-backed securities
decreased $592,000, or 11.61%, $46,000, or 12.45% and $150,000, or 26.06%,
respectively, due a lower average balance and average yield during 1999.
Interest income from consumer and other loans increased $139,000, or 68.35% due
to an increase in commercial real estate lending in the Waynesville area during
1999. Interest income from other interest-earning assets increased $121,000, or
19.13% due to a higher average balance and average yield during 1999. Total
interest expense decreased $378,000, or 13.93% due to a lower average deposit
balance and a lower average cost of funds.

     Provision for Loan Losses.   The provision for loan losses decreased to
$11,000 for the year ended December 31, 1999 from $63,000 in 1998.  The decrease
in the provision for loan losses was primarily due to a smaller charge-off of
$2,000 in 1999 compared to $41,000 in 1998.  The allowance for loan losses
increased to $419,000, or .65% of total loans at December 31, 1999 compared to
$410,000, or .67% of total loans at December 31, 1998.

     Provisions for loan losses are charged to earnings to bring the total
allowance for loan losses to a level considered by management to be adequate to
provide for estimated losses based on management's assessment of current
economic conditions, past loss and collection experience, and risk
characteristics of the loan portfolio.  Management also reviews individual loans
for which full collectibility may not be reasonably assured and considers among
other factors, the estimated fair value of the underlying collateral.

     Non-interest Income.  Non-interest income decreased $1.1 million to
($485,000) for the year ended December 31, 1999 from $570,000 for the year ended
December 31, 1998.  Non-interest income decreased primarily as a result of a
$62,000 decrease in loan servicing fees and a $1 million decrease in net gain on
sale of assets offset by a $33,000 increase in income from other non-interest
income.  Loan servicing fees decreased due to decreased mortgage loans
originated of $18.4 million in 1999 from $25.4 million in 1998.  Net gain on
sale of assets decreased due to decreased loan sales of $8.3 million in 1999
from $18.9 million in 1998 and the sale of the mutual funds at a loss of
$755,000 in 1999.

     Non-interest Expense.  Non-interest expense increased $193,000 in 1999
primarily due to an increase in professional fees in preparation for the planned
merger with Exchange.

     Provision for Income Taxes.  The provision for income taxes decreased
$546,000 in 1999 to $41,000 for the year ended December 31, 1999 from $587,000
for the year ended December 31, 1998.  This was a result of lower income before
taxes primarily due to the loss on the sale of mutual funds.

Comparison of Operating Results for the Years Ended December 31, 1998 and 1997

     Net Income.  The Company's net income decreased $2,000 to $862,000 for the
year ended December 31, 1998 from $864,000 for the year ended December 31, 1997.
The change was primarily the result of a $139,000 decrease in net interest
income, a $58,000 increase in provision for loan losses, a $32,000 increase in
non-interest expense and a $142,000 increase in provision for income taxes
offset by a $369,000 increase in non-interest income.  Diluted earnings per
share increased to $0.54 for the year ended December 31, 1998 from $0.52 for the
year ended December 31, 1997 due primarily to the purchase of 201,079 shares of
treasury stock in 1998.

     Net Interest Income.  Net interest income decreased $139,000, or 5.44%, to
$3.3 million for the year ended December 31, 1998 from $3.4 million for the year
ended December 31, 1997.  Total interest income decreased $176,000, or 3.34%, to
$6.9 million for the year ended December 31, 1998 from $7.1 million for the year
ended December 31, 1997.  The decrease in total interest income was primarily
due to a decrease in interest on investment securities and mortgage-backed
securities offset by an increase in interest on loans and other interest-earning
assets.  Interest income from investment securities decreased $167,000, or
31.20% to $370,000 for the year ended December 31,1998 from $537,000 for the
year ended December 31, 1997.  Interest income on investment securities
decreased due

                                      -27-
<PAGE>

to a lower average balance of investment securities, which decreased to $3.6
million in 1998 from $7.9 million in 1997 and a lower average yield on
investment securities which was 5.80% in 1998 compared to 5.94% in 1997.
Interest income on mortgage-backed securities decreased $118,000, or 16.94%, to
$575,000 for the year ended December 31, 1998 from $693,000 for the year ended
December 31, 1997. Interest income on mortgage-backed securities decreased due
to a lower average balance on mortgage-backed securities, which decreased to
$9.8 million in 1998 from $11.5 million in 1997. During 1998, the Company
continued to allow mortgage-backed securities to be reduced by principal
repayments. Interest income on loans increased by $29,000 for the year ended
December 31, 1998 as a result of a higher average balance of loans receivable,
which increased to $65.9 million in 1998 from $65.2 million in 1997 offset by a
decrease in the average yield on loans to 8.05% in 1998 from 8.09% in 1997.
Interest income from other interest-earning assets increased $79,000, or 14.38%
to $633,000 for the year ended December 31, 1998 from $554,000 for the year
ended December 31, 1997. Interest income from other interest-earning assets
increased due to a higher average balance on other interest-earning assets.
Total interest expense decreased $37,000, or 1.36%, to $3.61 million for the
year ended December 31, 1998 from $3.65 million for the year ended December 31,
1997. Interest expense decreased due to a lower average deposit balance which
decreased to $72.6 million in 1998 from $72.9 million in 1997 and a decrease in
average cost to 4.92% for 1998 from 4.99% for 1997.

     Provision for Loan Losses. The provision for loan losses increased to
$63,000 for the year ended December 31, 1998 from $5,000 in 1997. The increase
in the provision for loan losses primarily resulted from a shift in the
composition of the loan portfolio to include a smaller percentage of one-to
four-family, owner occupied mortgages, for which a lower loss reserve is
maintained. The allowance for loan losses increased to $410,000, or .67% of
total loans at December 31, 1998 compared to $387,000, or .58% of total loans at
December 31, 1997.

     Non-interest Income.  Non-interest income increased $369,000 to $570,000
for the year ended December 31, 1998 from $201,000 for the year ended December
31, 1997.  Non-interest income increased primarily as a result of a $68,000
increase in loan servicing fees and a $328,000 increase in net gain on sale of
assets offset by a $16,000 decrease in income from real estate owned and a
decrease of $11,000 in other non-interest income.  Loan servicing fees increased
due to increased loans originated of $28.1 million in 1998 from $19.4 million in
1997.  Net gain on sale of assets increased due to increased loan sales of $19.3
million in 1998 from $1.5 million in 1997.

     Non-interest Expense.  Non-interest expense increased $32,000 in 1998.  The
increase in non-interest expense in 1998 is primarily due to an increase in
compensation and benefits and occupancy and equipment offset by decreases in
deposit insurance and other non-interest expense.  Compensation and benefits
increased $42,000 to $1.4 million for the year ended December 31, 1998 from $1.3
million for the year ended December 31, 1997.  The increase in compensation and
benefits is primarily due to a $103,000 increase in MRDP stock benefit plan
expense offset by a $45,000 decrease in ESOP compensation expense and a $14,000
decrease in directors fees.  Occupancy and equipment expense increased $9,000 to
$255,000 for the year ended December 31, 1998 due to year 2000 compliance
requirements.  Deposit insurance decreased $2,000 to $45,000 in 1998 from
$47,000 in 1997 due to a lower average deposit balance.  Other non-interest
expenses decreased $16,000 to $644,000 for the year ended December 31, 1998 from
$660,000 for the year ended December 31, 1997.  The decrease in other non-
interest expenses was due primarily to a $31,000 decrease in franchise taxes
offset by a $15,000 increase in other professional fees.

     Provision for Income Taxes.   The provision for income taxes increased
$142,000 in 1998 to $587,000 for the year ended December 31, 1998 from $445,000
for the year ended December 31, 1997.  This is a result of higher income before
taxes, which increased $140,000 to $1.5 million for the year ended December 31,
1998 and a higher effective tax rate in 1998.  The tax rate increase is due to
the expiration of tax credits from a Missouri financial institution tax and the
difference between book and tax reporting of MRDP and ESOP compensation expense
in 1998.

                                      -28-
<PAGE>

<TABLE>
<CAPTION>

                                                     Year Ended December 31,
-----------------------------------------------------------------------------------------------------------------------------------
                                                           1997                                          1998
                                         ----------------------------------------     ------------------------------------------
                                         Average                      Average            Average                    Average
                                         Balance    Interest        Yield/Cost           Balance       Interest    Yield/Cost
-----------------------------------------------------------------------------------------------------------------------------------
                                                                        (Dollars in thousands)
<S>                                         <C>        <C>             <C>              <C>           <C>        <C>
Interest-earning assets:
   Loans receivable, net (1).............   $61,494       $4,849        7.89%          $65,868       $5,303           8.05%
   Mortgage-backed securities............     7,775          425        5.47             9,763          575           5.89
   Investment securities.................     5,347          282        5.27             5,718          318           5.56
   Mutual funds..........................     5,149          268        5.20             5,986          326           5.45
   FHLB stock............................       663           42        6.33               743           50           6.73
   Interest-bearing deposits.............     9,541          487        5.10             5,889          309           5.25
                                            -------       ------                       -------       ------

    Total interest-bearing assets........    89,969        6,353        7.06            93,967        6,881           7.32
                                            -------       ------                       -------       ------

Noninterest-earning assets...............     3,719                                      3,513
                                            -------                                    -------

    Total average assets.................   $93,688                                    $97,480
                                            =======                                    =======

Interest-bearing liabilities:
   Regular savings accounts..............   $ 6,304          178           2.82        $ 6,470          184           2.84
   MMDAs.................................     6,237          237           3.82          5,673          217           3.83
   Demand and NOW accounts...............     5,486          113           2.06          4,896          106           2.17
   Certificates of deposit...............    52,772        2,668           5.06         55,570        3,065           5.52
                                            -------       ------                       -------       ------
    Total average deposits...............    70,799        3,196           4.52         72,609        3,572           4.92
                                            -------       ------                       -------       ------
   FHLB advances.........................       568           36           6.34            584           38           6.51
                                            -------       ------                       -------       ------
    Total interest-bearing liabilities...    71,367        3,232           4.53         73,193        3,610           4.93
  Noninterest-bearing liabilities........       670                                        920
                                            -------                                    -------
    Total average liabilities............    72,037                                     74,113
                                            -------                                    -------
Average retained earnings................    21,651                                     23,367
                                            -------                                    -------
Total liabilities and retained earnings..   $93,688                                    $97,480
                                            =======                                    =======
Net interest income......................                  $3,121                                   $ 3,271
                                                           ======                                    ======
Interest rate spread.....................                                  2.53%                                      2.39%
Net interest margin......................                    3.47%                                     3.48%
Ratio of average interest-earning assets
 to average interest-bearing liabilities.    126.07%                                    128.38%

<CAPTION>

                                                     Year Ended December 31,
--------------------------------------------------------------------------------
                                                                1997
                                           -------------------------------------
                                            Average                 Average
                                            Balance    Interest     Yield/Cost
--------------------------------------------------------------------------------
                                                     (Dollars in thousands)
<S>                                        <C>          <C>        <C>
Interest-earning assets:
   Loans receivable, net (1).............   $65,160        $5,274          8.09%
   Mortgage-backed securities............    11,491           693          6.03
   Investment securities.................     7,929           471          5.94
   Mutual funds..........................     5,990           362          6.04
   FHLB stock............................       939            66          7.03
   Interest-bearing deposits.............     3,608           191          5.29
                                            -------        ------          ----
    Total interest-bearing assets........    95,117         7,057          7.42
                                            -------        ------
Noninterest-earning assets...............     2,875
                                            -------
   Total average assets..................   $97,992
                                            =======
Interest-bearing liabilities:
   Regular savings accounts..............   $ 6,802           207          3.04
   MMDAs.................................     5,050           193          3.82
   Demand and NOW accounts...............     4,093            91          2.22
   Certificates of deposit...............    56,973         3,146          5.52
                                            -------        ------
    Total average deposits...............    72,918         3,637          4.99
                                            -------        ------
   FHLB advances.........................       164            10          6.10
                                            -------         -----
    Total interest-bearing liabilities...    73,082         3,647          4.99
                                                            -----
Noninterest-bearing liabilities..........       805
                                             ------
      Total average liabilities..........    73,887
                                             ------
Average retained earnings................    24,105
                                            -------
Total liabilities and retained earnings..   $97,992
                                            =======
Net interest income......................                  $3,410
                                                           ======
Interest rate spread.....................                                  2.43%
Net interest margin......................                    3.58%
Ratio of average interest-earning assets
 to average interest-bearing liabilities.    130.15%

</TABLE>
-----------------------------
(1) Average loans receivable includes nonperforming loans.  Interest income does
    not include interest on loans 90 days or more past due.
(2) Yields on average mortgage-backed and investment securities available for
    sale have been calculated based upon the historical cost bases of the
    underlying securities.

                                      -29-
<PAGE>

Yields Earned and Rates Paid

     The Company's results of operations are determined primarily by net
interest income and, to a lesser extent, fee income, other operating income and
operating expenses.  Net interest income is determined by the interest rate
spread between the yields earned on its interest-earning assets and the rate
paid on interest-bearing liabilities and by the relative amounts of interest
earning assets and interest-bearing liabilities.

     The following table sets forth the weighted average effective interest rate
earned by the Company on its loan and investment portfolios, the weighted
average effective cost of the Company's deposits and borrowings, the interest
rate spread of the Company, and the net yield on weighted average interest-
earning assets for the periods and at the dates indicated.

<TABLE>
<CAPTION>
                                                                                              Year Ended December 31,
                                                       At December 31,           ---------------------------------------------------
                                                            1999                     1999                 1998             1997
                                                     ----------------------      ---------------      ---------------    -----------
<S>                                                             <C>                <C>                  <C>              <C>
Weighted average yield on:
   Loans receivable, net                                        7.91%                7.89%                8.05%            8.09%
   Mortgage-backed securities                                   5.70                 5.47                 5.89             6.09
   Investment securities                                        5.59                 5.27                 5.56             5.94
   Mutual funds                                                   --                 5.20                 5.45             6.04
   FHLB stock                                                   6.35                 6.33                 6.73             7.03
   Interest-bearing deposits                                    5.66                 5.44                 5.25             5.29

All interest-earning assets                                     7.31                 7.11                 7.32             7.42

Weighted average paid on:
   Regular savings accounts                                     2.85                 2.82                 2.84             3.04
   MMDA's                                                       3.84                 3.82                 3.83             3.82
   Demand and NOW accounts                                      2.17                 2.06                 2.17             2.22
   Certificates of deposit                                      5.04                 5.06                 5.52             5.52
   FHLB advances                                                6.12                 6.34                 6.51             6.10

All interest-bearing liabilities                                4.54                 4.53                 4.93             4.99

Interest rate spread (spread between                            2.76                 2.53                 2.39             2.43
   weighted average rate on all interest-
   earning assets and all interest-bearing
   liabilities)

Net interest margin (net interest income                        3.55                 3.47                 3.48             3.58
   as a percent of average interest-
   earning assets)
</TABLE>

                                      -30-
<PAGE>

Rate/Volume Analysis

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

<TABLE>
<CAPTION>
                                                        1999 Compared to 1998                    1998 Compared to 1997
                                                      Increase (Decrease) Due to               Increase (Decrease) Due to
                                      ----------------------------------------------------------------------------------------------
                                                                      Rate/                                      Rate/
                                             Rate        Volume      Volume      Total        Rate    Volume    Volume     Total
                                      ----------------------------------------------------------------------------------------------
                                                                                (In thousands)
<S>                                       <C>            <C>        <C>        <C>        <C>         <C>        <C>        <C>
Interest-earning assets:
   Loans receivable, net                  $(105)     $(356)       $ 7      $(454)         $ (28)     $  57        $ 0      $  29
   Mortgage-backed securities               (41)      (117)         8       (150)           (16)      (104)         2       (118)
   Investment securities                    (17)       (20)         1        (36)           (30)      (131)         8       (153)
   Mutual funds                             (15)       (45)         2        (58)           (35)         0          0        (35)
   FHLB stock                                (3)        (5)         0         (8)            (3)       (14)         1        (16)
   Interest-bearing deposits                 (8)       191         (5)       178             (2)       121         (1)       118
                                          -----      -----        ---      -----          -----      -----        ---       ----
      Total net change in income on        (189)      (352)        13       (528)          (114)       (71)        10       (175)
         interest-earning assets          -----      -----        ---      -----          -----      -----        ---      -----

Interest-bearing liabilities:
   Regular savings accounts                  (1)        (6)         1         (6)           (14)       (10)         1        (23)
   MMDAs                                     (1)        22         (1)        20              0         24          0         24
   Demand and NOW accounts                   (5)        13         (1)         7             (3)        18          0         15
   Certificates of deposit                 (256)      (154)        13       (397)            (4)       (77)         0        (81)
   FHLB advances                             (1)        (3)         2         (2)             1         25          2         28
                                          -----      -----        ---      -----          -----      -----        ---      -----
      Total net change in expense on
         interest-bearing liabilities      (264)      (128)        14       (378)           (20)       (20)         3        (37)
                                          -----      -----        ---      -----          -----      -----        ---      -----
Net change in net interest income         $  75      $(224)       $(1)     $(150)         $ (94)     $ (51)       $ 7      $(138)
                                          =====      =====        ===      =====          =====      =====        ===      =====
</TABLE>


Asset and Liability Management

     The Company's principal financial objective is to achieve long-term
profitability while reducing its exposure to fluctuating interest rates.  The
Company has sought to reduce exposure of its earnings to changes in market
interest rates by attempting to manage the mismatch between asset and liability
maturities and interest rates.  The principal element in achieving this
objective is to increase the interest-rate sensitivity of the Company's
interest-earning assets by retaining for its portfolio loans with interest rates
subject to periodic adjustment to market conditions and selling substantially
all of its fixed-rate one- to four-family mortgage loans.  In addition, the
Company maintains an investment portfolio with adjustable-rate mortgage-backed
securities and laddered maturities in shorter-term debt securities.   The
Company relies on retail deposits as its primary source of funds.  Management
believes retail deposits, compared to brokered deposits, reduce the effects of
interest rate fluctuations because they generally represent a more stable source
of funds.  As part of its interest rate risk management strategy, the Company
promotes transaction accounts and certificates of deposit with terms up to four
years.

                                      -31-
<PAGE>

     Using data from the Savings Bank's quarterly reports to the OTS, the
Company receives a report which measures interest rate risk by modeling the
change in Net Portfolio Value ("NPV") over a variety of interest rate scenarios.
This procedure for measuring interest rate risk was developed by the OTS to
replace the "gap" analysis (the difference between interest-earning assets and
interest-bearing liabilities that mature or reprice within a specific time
period).  NPV is the present value of expected cash flows from assets,
liabilities, and off-balance sheet contracts.  The calculation is intended to
illustrate the change in NPV that will occur in the event of an immediate change
in interest rates of at least 200 basis points with no effect given to any steps
that management might take to counter the effect of that interest rate movement.

<TABLE>
<CAPTION>
                                                                         Net Portfolio as %
                        Net Portfolio Value                           Portfolio Value of Assets
                   ----------------------------------            --------------------------------------
 Change
in Rates            $ Amount               $ Change                % Change                NPV Ratio                  Change
--------           ------------           -----------            -------------            -------------            --------------
 <S>                <C>                    <C>                    <C>                      <C>                      <C>
(300) bp              $15,688               $(2,700)                 (15)%                   18.39%                    (217) bp
(200) bp               16,737                (1,651)                  (9)                    19.28                     (128)
(100) bp               17,662                  (725)                  (4)                    20.03                      (54)
0 bp                   18,387                    --                   --                     20.57                       --
100 bp                 18,850                   463                    3                     20.86                       29
200 bp                 19,269                   882                    5                     21.10                       53
300 bp                 19,854                 1,467                    8                     21.48                       91
</TABLE>

     Management reviews the OTS measurements on a quarterly basis.  In addition
to monitoring selected measures on NPV, management also monitors effects on net
interest income resulting from increases or decreases in rates.  The measure is
used in conjunction with NPV measures to identify excessive interest rate risk.

Liquidity and Capital Resources

     The Company's primary sources of funds are customer deposits, proceeds from
principal and interest payments on the sale of loans, maturing securities and
FHLB advances.  While maturities and scheduled amortization of loans area
predictable source of funds, deposit flows and mortgage prepayments are greatly
influenced by general interest rates, economic conditions, and competition.

     The Company must maintain an adequate level of liquidity to ensure the
availability of sufficient funds to support loan growth and deposit withdrawals,
to satisfy financial commitments and to take advantage of investment
opportunities.  The Company generally maintains sufficient cash and short-term
investments to meet short-term liquidity needs.  At December 31, 1999, cash and
due from depository institutions totaled $10.7 million, or 11.68% of total
assets, and investment securities classified as available-for-sale that matured
in one year or less totaled $4.3 million, or 4.7% of total assets.  In addition,
the Company maintains a credit facility with the FHLB which provides for
immediately available advances.  The Company had FHLB advances outstanding of
$794,000 at December 31, 1999.

     Federal regulations require a savings institution to maintain an average
daily balance of liquid assets (cash and eligible investments) equal to at least
4% of the average daily balance of its net withdrawable deposits and short-term
borrowing.  The Company consistently maintains liquidity levels in excess of
regulatory requirements, and believes this is an appropriate strategy for proper
asset and liability management.  At December 31, 1999 the liquidity ratio was
27.13%.

     The Company uses its liquid resources principally to meet on-going
commitments, to fund maturing certificates of deposits and deposit withdrawals,
to invest, to fund existing and future loan commitments, to maintain liquidity
and to meet operating expenses.  The Company anticipates that it will have
sufficient funds available to meet current loan commitments.  At December 31,
1999 the Company had outstanding commitments

                                      -32-
<PAGE>

to extend credit which totaled $3.2 million and lines of credit which totaled
$1.2 million. Management anticipates that it will have sufficient funds
available to meet its current loan origination commitments.

     The primary investing activity of the Company is the origination and
purchase of mortgage loans.  During years ended December 31, 1997, 1998 and
1999, the Company originated loans in the amounts of $19.4 million, $28.1
million and $26.5 million, and purchased loans in the amounts of $4.3 million,
$8.3 million and $8.6 million, respectively.

Effect of Inflation and Changing Prices

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

Year 2000 Considerations

     The Company completed the Year 2000 Action Plan which management used to
identify and correct Year 2000 compliance issues.  The Company reviewed all
services and operation components to identify technical and non-technical
issues.  Having identified internal components and external components, the
Company replaced its computer hardware with Year 2000 compliant equipment.  The
Company requested third party providers to insure Year 2000 compliance with
software and services and required testing of these services to assure
compliance.

     The Company has not experienced any operational or financial problems
related to the Year 2000 date change.  The Company will continue to monitor all
processing to ensure that no Year 2000 issues arise in the future.  The Company
has taken the necessary steps to validate and test its contingency plan in order
to minimize the impact should there be a system failure in the future.
Management believes that the Year 2000 issue will not pose any future
operational problems.


Item 7.   Financial Statements
------------------------------

    The financial statements listed at Item 13 of this Form 10-KSB are
incorporated by reference into this Item 7 of Part II of this Form 10-KSB.

Item 8.   Changes in and Disagreements with Accountants on Accounting and
-------------------------------------------------------------------------
Financial Disclosure
--------------------

    Not applicable.

                                      -33-
<PAGE>

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
-------  -------------------------------------------------------------
         Compliance with Section 16(a) of the Exchange Act
          ------------------------------- --- ------------

Directors

     The following persons are currently directors of the Company.

<TABLE>
<CAPTION>
                                              Director
Name                            Age(1)         Since            Principal Occupation
------                        --------     ---------------    ----------------------------------------------------------
 <S>                           <C>          <C>                <C>
Robert E. Chiles                 64             1967             President and Chief Executive Officer of the Savings
                                                                 Bank since 1974, President and Chief Executive Officer
                                                                 of the Company since 1996.
Richard E. Caplinger             66             1975             Retired in 1996 as owner of Caplinger's Inc., a men's
                                                                 clothing store.  Chairman of the Board of Directors
                                                                 since 1993 and Chairman of the Company since 1996.
Michael A. Dallmeyer             47             1994             Partner in the law firm of Hendren and Andrae,
                                                                 Jefferson City, Missouri since 1977.
John C. Kolb                     51             1989             President and part-owner of Jefferson City Oil Co.,
                                                                 Inc., an oil and fuel distributor, since 1973.
James F. McHenry                 69             1964             Retired Circuit Court Judge for Cole County.
Ronald D. Roberson               61             1983             Owner of R.D. Roberson & Associates, a financial and
                                                                 management consulting firm founded in 1990.

-------------------------------------
(1) As of December 31, 1999
</TABLE>

<TABLE>
<CAPTION>

Executive Officers

     The following table sets forth certain information regarding the executive officers of the Company.

Name                            Age(1)        Position
------                        --------     ---------------
 <S>                           <C>          <C>
Robert E. Chiles                 64         President and Chief Executive Officer

David L. Jobe                    51         Treasurer and Secretary

Delphine E. Prenger              62         Vice President

Jason E. Schwartz                31         Vice President
</TABLE>
________________________________
(1)   As of December 31, 1999.


    Robert E. Chiles serves as President, Chief Executive Officer and Director
of the Savings Bank, positions he has held since 1974.  Mr. Chiles has also
served as President, Chief Executive Officer and Director of the Company since
its formation in 1996.  Mr. Chiles is currently a member of the Loan Review
Committee, the

                                      -34-
<PAGE>

Planning Committee, the Investment Committee and the In-House
Loan Committee.  Mr. Chiles served as a member of the FHLB-Des Moines Board from
1989 to 1994 and as Vice Chairman in 1994.

    David L. Jobe currently serves as the Treasurer and Secretary of the Savings
Bank, positions which he has held since 1984.  Mr. Jobe also served as the
Treasurer of the Jefferson City Chamber of Commerce in 1996.

    Delphine E. Prenger has been associated with the Savings Bank since 1968 and
has served as Vice-President since 1983.  Ms. Prenger is also a member of the
Jefferson City Chamber of Commerce.

    Jason E. Schwartz has been with the Company since 1995 and served as Vice-
President since 1997.  Mr. Schwartz is currently Treasurer-Elect of the
Jefferson City Chamber of Commerce.



Item 10.  Executive Compensation
--------------------------------

Summary Compensation Table

    The following information is furnished for the Chief Executive Officer of
the Company.  No other executive officer of the Company or the Savings Bank
received salary and bonus in excess of $100,000 during the year ended December
31, 1999.

<TABLE>
<CAPTION>
                                                                                          Long-Term Compensation
                                               Annual Compensation                               Awards
                                 --------------------------------------------        ----------------------------
                                                                                     Restricted      Securities
                                                           Other Annual                Stock         Underlying        All Other
Name and Position         Year   Salary ($)   Bonus ($)   Compensation ($)(1)         Awards ($)      Options (#)   Compensation ($)
------------------        ----   ----------   ---------   -------------------        -----------     ------------   ----------------
<S>                      <C>     <C>          <C>          <C>                        <C>            <C>              <C>
Robert E. Chiles          1999     102,000       --           12.000(2)                     --            --           $43,422(4)
 Chief Executive Officer  1998      99,100       --           12.000                        --            --            20,401
 and President            1997      96,100       --           12.000                   258,281(3)     33,000            18,907
</TABLE>
------------------------------------
(1) Does not include perquisites which did not exceed the lesser of $50,000 or
    10% of salary and bonus.
(2)  Consists of directors' fees.
(3) Represents the total value of the award of 16,530 shares of restricted stock
    on June 17, 1997, which award will vest ratably over a five-year period.  At
    December 31, 1999, the value of the unvested restricted stock award was
    $153,730.  Dividends are paid on the restricted stock.
(4) Consists of employer contributions to ESOP.


Option Exercise/Value Table

     The following information with respect to options exercised during the
fiscal year ended December 31, 1999 and remaining unexercised at the end of the
fiscal year is presented for Mr. Chiles.

<TABLE>
<CAPTION>
                                                              Number of Securities               Value of Unexercised
                                                             Underlying Unexercised              In-the-Money Options
                             Shares                                Options                      at Fiscal Year End ($)(1)
                           Acquired on       Value         ---------------------------       -----------------------------
Name                      Exercise (#)    Realized ($)     Exercisable   Unexercisable       Exercisable    Unexercisable
                          ------------    -----------      ----------    -------------       -----------   ---------------
<S>                       <C>             <C>               <C>           <C>                  <C>          <C>
Robert E. Chiles                --          $    --           13,200         19,800              $  --         $  --
</TABLE>
--------------------------------------------------------------------------------
(1) Value of unexercised in-the-money options equals market value of shares
    covered by in-the-money options on December 31, 1999 less the option
    exercise price.  Options are in-the-money if the market value of the shares
    covered by the option is greater than the option exercise price.

                                      -35-
<PAGE>

Employment Agreement

     On June 11, 1996, the Company and the Savings Bank entered into a three-
year employment agreement with Mr. Chiles.  Mr. Chiles' base salary under the
agreement currently is $102,000, which amount is paid by the Savings Bank and
may be increased at the discretion of the Board of Directors or an authorized
committee of the board.  On each anniversary of the commencement date of the
agreement, the term of the agreement may be extended for an additional year.
The agreement is terminable by the Company and the Savings Bank at any time or
upon the occurrence of certain events specified by federal regulations.

     The employment agreement provides for severance payments and other benefits
in the event of involuntary termination of employment in connection with any
change in control of the Company and the Savings Bank.  Severance payments also
will be provided on a similar basis in connection with a voluntary termination
of employment where, subsequent to a change in control, Mr. Chiles is assigned
duties inconsistent with his position, duties, responsibilities and status
immediately prior to such change in control.

     The severance payment from the Employers will equal 2.99 times Mr. Chiles'
average annual taxable compensation during the five-year period preceding the
change in control.  Such amount will be paid in a lump sum within ten business
days following the termination of employment.  Section 280G of the Internal
Revenue Code of 1986, as amended, states that severance payments which equal or
exceed three times the base compensation of the individual are deemed to be
"excess parachute payments" if they are contingent upon a change in control.
Individuals receiving excess parachute payments are subject to a 20% excise tax
on the amount that exceeds base compensation, and the Company would not be
entitled to deduct such amount.

     The agreement restricts Mr. Chiles' right to compete against the Company
and the Savings Bank for a period of one year from the date of termination of
the agreement if Mr. Chiles voluntarily terminates employment, except in the
event of a change in control.

Directors' Compensation

     Directors of the Savings Bank currently receive a monthly retainer of
$1,000.  Director Roberson participates in the Savings Bank's medical and dental
insurance plans at his own expense.  No separate fees are paid for service on
the Board of Directors of the Company.

     During the year ended December 31, 1997, each non-employee director
received a grant of 3,305 shares of restricted stock at no cost to the director
under the Company's 1997 Management Recognition and Development Plan.  Each non-
employee director also received options to acquire 8,265 shares of common stock
at an exercise price of $15.625 under the Company's 1997 Stock Option Plan.
Both the restricted stock and the stock options vest ratably over a five-year
period.

Item 11.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

     (a) Security Ownership of Certain Beneficial Owners

     The following table provides information as of December 31, 1999, with
respect to persons known to the Company to be the beneficial owners of more than
5% of the Company's outstanding common stock.

                                      -36-
<PAGE>

<TABLE>
<CAPTION>
                                               Number of Shares                   Percent of Common
Name and Address                              Beneficially Owned                  Stock Outstanding
---------------------                     --------------------------        ------------------------------
<S>                                            <C>                               <C>
City National Savings Bank, FSB                    127,625(1)                           9.00%
Employee Stock Ownership Plan
427 Monroe Street
Jefferson City, Missouri 65101
</TABLE>
--------------------------------------------------------------------------------
(1) Under the terms of the ESOP, the trustees will vote unallocated shares and
    allocated shares for which no voting instructions are received in the same
    proportion as shares for which the trustees have received voting
    instructions from participants.  The trustees of the ESOP are John C. Kolb,
    Michael A. Dallmeyer and Robert E. Chiles.

  The following table provides information about the shares of the Company's
common stock that may be considered to be owned by each director of the Company
and by all directors and executive officers of the Company as a group as of
December 31, 1999.  A person may be considered to own any shares of common stock
over which he or she has, directly or indirectly, sole or shared voting or
investing power.

<TABLE>
<CAPTION>
                                                                                   Number of Shares
                                                                                      That May Be
                                                                Number of           Acquired Within          Percent of
                                                                  Shares               60 Days By            Common Stock
   Name/Title                                                   Owned(1)           Exercising Options      Outstanding(2)
  --------------------------------------                   ------------------    ----------------------  ------------------
 <S>                                                         <C>                       <C>                     <C>
  Richard E. Caplinger                                           16,322                     3,306                1.38%
     Chairman of the Board

  Robert E. Chiles                                               31,684(3)                 13,200                3.14
    President, Chief Executive Officer and
    Director

  Michael A. Dallmeyer                                           11,322                     3,306                1.03
    Director

  John C. Kolb                                                   11,322(4)                  3,306                1.03
    Director

  James F. McHenry                                               16,322                     3,306                1.38
    Director

  Ronald D. Roberson                                             15,661                     3,306                1.33
    Director

  All directors and executive officers as a group               151,063(3)                 41,330               13.18
  (nine persons)
</TABLE>
-----------------------------------------
(1) The table does not include 39,279 unvested shares of restricted stock held
    by a trust under CNS's 1997 Management Recognition and Development Plan for
    which the non-employee directors serve as trustees and exercise voting
    power.  Participants in the plan have no voting or investment power for
    restricted shares awarded under the plan until such shares vest in
    accordance with plan provisions.  After vesting, the participant has sole
    investment and voting power.
(2) Based on 1,418,286 shares of CNS common stock outstanding and entitled to
    vote as of December 31, 1999, plus the number of shares that may be acquired
    within 60 days by each individual (or group of individuals) by exercising
    options.
(3) Shares allocated under the Savings Bank's ESOP as of December 31, 1999 over
    which the individual has shared voting power but not investment power are
    included as follows: Mr. Chiles, 10,072 shares and all directors and
    executive officers as a group, 24,066 shares.
(4) Includes 5,000 shares held by Mr. Kolb's spouse and 5,000 shares held by Mr.
    Kolb's daughters.

                                      -37-
<PAGE>

   (b)    Changes in Control

   The Company is not aware of any arrangements, including any pledge by any
person of securities of the Company, the operation of which may at a subsequent
date result in a change in control of the Company.

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

   Federal regulations require all loans or extensions of credit to executive
officers and directors be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons (unless the loan or extension of credit is made
under a benefit program generally available to all other employees and does not
give preference to any insider over any other employee) and must not involve
more than the normal risk of repayment or present other unfavorable features. In
addition, loans made to a director or executive officer in an amount that, when
aggregated with the amount of all other loans to such person and his or her
related interests, are in excess of the greater of $25,000 or 5% of the Savings
Bank's capital and surplus (up to a maximum of $500,000) must be approved in
advance by a majority of the disinterested members of the Board of Directors.
The Company's policy is not to make any new loans or extensions of credit to
executive officers and directors at different rates or terms than those offered
to the general public and to have the Board of Directors approve all loans to
executive officers and directors.

                                      -38-
<PAGE>

                                    PART IV

Item 13.  Exhibits List and Reports on Form 8-K
-----------------------------------------------

(a)    Financial Statements
       The following are filed as part of this report, beginning on page F-1:
   .   Independent Auditor's Report
   .   Consolidated Balance Sheets as of December 31, 1998 and 1999
   .   Consolidated Statements of Income for the Years Ended December 31, 1997,
       1998 and 1999
   .   Consolidated Statements of Changes in Equity Capital for the
       Years Ended December 31, 1997, 1998 and 1999
   .   Consolidated Statements of Cash Flows for the Years Ended December 31,
       1997, 1998 and 1999
   .   Notes to Consolidated Financial Statements

 (b)   Exhibits

 2     Agreement and Plan of Merger dated as of October 27, 1999 by and among
       Exchange National Bancshares, Inc., ENB Holdings, Inc and CNS Bancorp,
       Inc. (incorporated by reference to Exhibit 2.1 to the Company's
       Current Report on Form 8-K filed November 1, 1999)
3.1    Certificate of Incorporation of CNS Bancorp, Inc. (incorporated by
       reference to Exhibit 3.1 to the Company's Registration Statement on
       Form S-1 (File No. 333-01880))
3.2    Amended and Restated Bylaws of CNS Bancorp, Inc. (incorporated by
       reference to Exhibit 3.2 to the Company's Annual Report on Form 10-KSB
       for the year ended December 31, 1998)
10.1   Employment Agreement with Robert E. Chiles (incorporated by reference
       to Exhibit 10.1 to the Company's Annual Report on Form 10-KSB for the
       year ended December 31, 1998)
10.2   CNS Bancorp, Inc. 1997 Stock Option Plan (incorporated by reference to
       Exhibit A to the Company's Proxy Statement dated March 19, 1997)
       (incorporated by reference to Exhibit 10.2 to the Company's Annual
       Report on Form 10-KSB for the year ended December 31, 1998)
10.3   CNS Bancorp, Inc. 1997 Management Recognition and Development Plan
       (incorporated by reference Exhibit B to the Company's Proxy Statement
       dated March 19, 1997)
21     Subsidiaries of the Registrant
23     Consent of Independent Auditors
27     Financial Data Schedule

(c)    Reports on Form 8-K

  A Report on Form 8-K was filed on November 1, 1999 reporting under Item 5
  the execution of an Agreement and Plan of Merger with Exchange National
  Bancshares, Inc.

                                      -39-
<PAGE>

                                   SIGNATURES

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

                                 CNS BANCORP, INC.


Date:  March 14, 2000            By: /s/ Robert E. Chiles
                                     ------------------------------------
                                     Robert E. Chiles
                                     President and Chief Executive Officer

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

SIGNATURES                         TITLE                      DATE
----------                         -----                      ----



/s/ Robert E. Chiles               President, Chief           March 14, 2000
----------------------------
Robert E. Chiles                   Executive Officer and
                                   Director (Principal
                                   Executive Officer)


/s/ David L. Jobe                  Treasurer and Secretary    March 14, 2000
----------------------------
David L. Jobe                      (Principal Financial
                                   and Accounting Officer)


/s/ Richard E. Caplinger           Chairman of the Board      March 14, 2000
----------------------------
Richard E. Caplinger


/s/ Michael A. Dallmeyer           Director                   March 14, 2000
----------------------------
Michael A. Dallmeyer


/s/ John C. Kolb                   Director                   March 14, 2000
----------------------------
John C. Kolb


/s/ James F. McHenry               Director                   March 14, 2000
----------------------------
James F. McHenry


/s/ Ronald D. Roberson             Director                   March 14, 2000
----------------------------
Ronald D. Roberson



<PAGE>

                       [WILLIAMS KEEPERS LLC LETTERHEAD]



                         INDEPENDENT AUDITORS' REPORT


To the Board of Directors of
CNS Bancorp, Inc. and Subsidiaries

We have audited the accompanying consolidated statements of financial condition
of CNS Bancorp, Inc. and subsidiaries (Company) as of December 31, 1998 and
1999, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1999. 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, the consolidated financial statements referred to in the first
paragraph present fairly, in all material respects, the consolidated financial
position of CNS Bancorp, Inc. and subsidiaries as of December 31, 1998 and 1999,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1999, in conformity with generally
accepted accounting principles.



/s/ Williams Keepers LLC
---------------------------
February 4, 2000

                                      F-1
<PAGE>

                      CNS BANCORP, INC. AND SUBSIDIARIES


                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                          December 31, 1998 and 1999

<TABLE>
<CAPTION>
                          ASSETS                                                            1998               1999
                                                                                        ------------       ------------
<S>                                                                                     <C>                <C>
Cash and due from depository institutions (including interest-bearing                   $  9,813,816       $ 10,720,442
  accounts totaling $8,578,960 in 1998 and $8,450,484 in 1999)
Securities available-for-sale (Note 2)                                                    17,715,083         12,386,970
Stock in Federal Home Loan Bank (Note 2)                                                     662,500            662,500
Loans held-for-sale, net (Note 3)                                                          1,767,075                  -
Loans receivable, net (Note 3)                                                            61,699,912         64,263,384
Accrued interest receivable (Note 4)                                                         561,175            574,883
Real estate owned, net (Note 5)                                                              710,085            621,591
Premises and equipment, net (Note 6)                                                       1,611,454          1,521,752
Income taxes (Note 7)                                                                        166,356            545,257
Other assets (Note 8)                                                                        693,189            469,039
                                                                                        ------------       ------------
          Total assets                                                                  $ 95,400,645       $ 91,765,818
                                                                                        ============       ============

     LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits (Note 10)                                                                      $ 72,689,165       $ 68,906,887
Borrowed funds (Note 11)                                                                     570,983            794,346
Advances from borrowers for taxes and insurance                                               34,287             40,731
Accrued expenses and other liabilities                                                       365,419            437,446
                                                                                        ------------       ------------
          Total liabilities                                                               73,659,854         70,179,410
                                                                                        ------------       ------------

Stockholders' equity
Common stock, $.01 par value:
  Authorized, 6,000,000 shares; 1,653,125 shares issued                                       16,531             16,531
Additional paid-in capital                                                                16,121,656         16,142,402
Retained earnings, substantially restricted (Notes 12, 13)                                11,007,233         10,628,692
Deferred compensation - Employee Stock Ownership Plan (ESOP)
  (Note 14)                                                                                (951,361)          (820,084)
Deferred compensation - Management Recognition and Development
  Plan (MRDP) (Note 14)                                                                    (723,243)          (487,665)
Stock held in trust for Executive Deferred Compensation Plan (Note 14)                      (94,258)          (130,587)
Treasury stock, 201,079 and 234,839 shares at cost in 1998 and 1999,
  respectively                                                                           (3,182,279)        (3,585,067)
Accumulated other comprehensive loss (Note 2)                                              (453,488)          (177,814)
                                                                                        ------------       ------------
                           Total stockholders' equity                                     21,740,791         21,586,408
                                                                                        ------------       ------------
                           Total liabilities and stockholders' equity                   $ 95,400,645       $ 91,765,818
                                                                                        ============       ============
</TABLE>

     The notes to consolidated financial statements are an integral part of
                               these statements.

                                      F-2
<PAGE>

                      CNS BANCORP, INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME
                 Years Ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
INTEREST INCOME                                                      1997            1998            1999
                                                                 ----------      ----------      ----------
<S>                                                              <C>             <C>             <C>
   Mortgage loans                                                $5,070,798      $5,099,846      $4,507,782
   Consumer and other loans                                         202,896         202,899         341,578
   Investment securities                                            537,151         369,543         323,553
   Mortgage-backed securities                                       692,680         575,329         425,408
   Other interest-earning assets                                    553,648         633,251         754,418
                                                                 ----------      ----------      ----------
               Total interest income                              7,057,173       6,880,868       6,352,739
                                                                 ----------      ----------      ----------
INTEREST EXPENSE
   Deposits                                                       3,636,701       3,572,420       3,195,863
   Borrowed funds (Note 11)                                          10,298          37,638          35,980
                                                                 ----------      ----------      ----------
               Total interest expense                             3,646,999       3,610,058       3,231,843
                                                                 ----------      ----------      ----------
               Net interest income                                3,410,174       3,270,810       3,120,896
PROVISION FOR LOAN LOSSES (Note 3)                                    5,000          62,889          10,580
                                                                 ----------      ----------      ----------
               Net interest income after provision
                  for loan losses                                 3,405,174       3,207,921       3,110,316
                                                                 ----------      ----------      ----------
NON-INTEREST INCOME
   Loan servicing fees                                               64,389         132,430         70,194
   Income (loss) from real estate owned (Note 5)                     11,790         (4,040)        (11,162)
   Net gain (loss) on sale of assets (Note 15)                       17,714         345,285       (673,299)
   Other (Note 16)                                                  107,059          96,277         129,157
                                                                 ----------      ----------      ----------
               Total non-interest income (loss)                     200,952         569,952       (485,110)
                                                                 ----------      ----------      ----------
NON-INTEREST EXPENSE
   Compensation and benefits                                      1,343,923       1,385,382       1,401,356
   Occupancy and equipment                                          246,300         254,875         264,913
   Deposit insurance premiums                                        46,873          44,519          42,759
   Other (Note 16)                                                  659,466         643,701         812,055
                                                                 ----------      ----------      ----------
               Total non-interest expense                         2,296,562       2,328,477       2,521,083
                                                                 ----------      ----------      ----------
               Income before income taxes                         1,309,564       1,449,396         104,123
PROVISION FOR INCOME TAXES (Note 7)                                 445,264         587,014          40,689
                                                                 ----------      ----------      ----------
               Net income                                        $  864,300      $  862,382      $   63,434
                                                                 ==========      ==========      ==========

               Earnings per share (Note 17)                      $     0.56      $     0.58      $     0.05
                                                                 ==========      ==========      ==========

               Diluted earnings per share (Note 17)              $     0.52      $     0.54      $     0.05
                                                                 ==========      ==========      ==========
</TABLE>

    The notes to consolidated financial statements are an integral part of
                               these statements.

                                      F-3
<PAGE>

                      CNS BANCORP, INC. AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  Year Ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
                                                  Common Stock
                                              ---------------------
                                                                        Additional                     Deferred       Deferred
                                                                         Paid-in        Retained     Compensation    Compensation
                                                Shares     Amount        Capital        Earnings         ESOP           MRDP
                                              ---------- ----------    -----------    -----------    ------------   ------------
<S>                                           <C>        <C>           <C>            <C>            <C>            <C>
Balance, December 31, 1996                     1,653,125    $16,531    $16,003,502    $10,044,280    $(1,249,411)   $         -
-------------------------------------------------------------------------------------------------------------------------------
Establishment of MRDP                                  -          -              -              -              -     (1,033,203)

Compensation expense recognized
  for ESOP                                             -          -        117,389              -        166,771              -

Compensation expense recognized
  for MRDP                                             -          -              -              -              -        103,320

Valuation adjustment for MRDP trust
  receivable                                           -          -        (97,741)             -              -              -

Earnings on the executive deferred
  compensation plan                                    -          -              -              -              -              -

Dividends paid ($ .22 per share)                       -          -              -       (363,688)             -              -

Net income                                             -          -              -        864,300              -              -

Net change in unrealized loss on
  securities available-for-sale, net of
  deferred taxes                                       -          -              -              -              -              -
                                              ---------- ----------    -----------    -----------    -----------     -----------
Balance, December 31, 1997                     1,653,125     16,531     16,023,150     10,544,892     (1,082,640)      (929,883)

Compensation expense recognized
  for ESOP                                             -          -         80,503              -        131,279              -

Compensation expense recognized
  for MRDP                                             -          -              -              -              -        206,640

Valuation adjustment for MRDP trust
  receivable                                           -          -         18,003              -              -              -

Net change in executive deferred
  compensation plan                                    -          -              -              -              -              -

Dividends paid ($ .27 per share)                       -          -              -       (400,041)             -              -

Acquisition of 201,079 common
  shares to be held as treasury stock                  -          -              -              -              -              -

Net income                                             -          -              -        862,382              -              -

Net change in unrealized loss on securities
available-for-sale, net of deferred taxes              -          -              -              -              -              -
                                              ---------- ----------    -----------    -----------    -----------     -----------
Balance, December 31, 1998                     1,653,125     16,531     16,121,656     11,007,233       (951,361)      (723,243)


<CAPTION>
                                              Stock Held In
                                               Trust For
                                               Executive                 Accumulated
                                               Deferred                     Other                     (Memo)
                                              Compensation   Treasury   Comprehensive              Comprehensive
                                                 Plan          Stock       Income         Total       Income
                                              ------------  ----------  -------------  ----------- -------------
<S>                                           <C>           <C>         <C>            <C>         <C>
Balance, December 31, 1996                    $  (127,428)  $        -  $    (488,196) $24,199,278 $           -
----------------------------------------------------------------------------------------------------------------
Establishment of MRDP                                   -            -              -   (1,033,203)            -

Compensation expense recognized
  for ESOP                                              -            -              -      284,160             -

Compensation expense recognized
  for MRDP                                              -            -              -      103,320             -

Valuation adjustment for MRDP trust
  receivable                                            -            -              -      (97,741)            -

Earnings on the executive deferred
  compensation plan                               (34,968)           -              -      (34,968)            -

Dividends paid ($ .22 per share)                        -            -              -     (363,688)            -

Net income                                              -            -              -      864,300       864,300

Net change in unrealized loss on
  securities available-for-sale, net of
  deferred taxes                                        -            -          2,668        2,668         2,668
                                              -----------   ----------  -------------  ----------- -------------
Balance, December 31, 1997                       (162,396)           -       (485,528)  23,924,126       866,968
                                                                                                   =============
Compensation expense recognized
  for ESOP                                              -            -              -      211,782             -

Compensation expense recognized
  for MRDP                                              -            -              -      206,640             -

Valuation adjustment for MRDP trust
  receivable                                            -            -              -       18,003             -

Net change in executive deferred
  compensation plan                                68,138            -              -       68,138             -

Dividends paid ($ .27 per share)                        -            -              -     (400,041)            -

Acquisition of 201,079 common                           -   (3,182,279)             -   (3,182,279)            -
  shares to be held as treasury stock

Net income                                              -            -              -      862,382       862,382

Net change in unrealized loss on securities
available-for-sale, net of deferred taxes               -            -         32,040       32,040        32,040
                                              -----------   ----------  -------------  ----------- -------------
Balance, December 31, 1998                        (94,258)  (3,182,279)      (453,488)  21,740,791      $894,422
                                                                                                   =============
</TABLE>

 The notes to consolidated financial statements are an integral part of these
                                  statements.

                                      F-4
<PAGE>

                      CNS BANCORP, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY- Continued
                 Years Ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
                                                  Common Stock
                                              ---------------------
                                                                        Additional                     Deferred       Deferred
                                                                         Paid-in        Retained     Compensation    Compensation
                                                Shares     Amount        Capital        Earnings         ESOP           MRDP
                                              ---------- ----------    -----------    -----------    ------------   ------------
<S>                                           <C>        <C>           <C>            <C>            <C>            <C>
Compensation expense recognized
--------------------------------------------------------------------------------------------------------------------------------
  for ESOP                                             -          -         29,027              -         131,277              -

Compensation expense recognized
  for MRDP                                             -          -              -              -               -        227,297

MRDP shares forfeited                                  -          -         (8,281)             -               -          8,281

Net change in executive
deferred compensation plan                             -          -              -              -               -              -

Dividends paid ($ .33 per share                        -          -              -       (441,975)              -              -

Acquisition of 33,760 common
  shares to be held as treasury stock                  -          -              -              -               -              -

Net income                                             -          -              -         63,434               -              -

Net change in unrealized loss
  on securities available-for-sale, net
  of deferred taxes                                    -          -              -              -               -              -
                                              ----------    -------    -----------    -----------       ---------      ---------
Balance, December 31, 1999                     1,653,125    $16,531    $16,142,402    $10,628,692       $(820,084)     $(487,665)
                                              ==========    =======    ===========    ===========       =========      =========

<CAPTION>
                                              Stock Held In
                                               Trust For
                                               Executive                 Accumulated
                                               Deferred                     Other                     (Memo)
                                              Compensation   Treasury   Comprehensive              Comprehensive
                                                 Plan          Stock       Income         Total       Income
                                              ------------  ----------  -------------  ----------- -------------
<S>                                           <C>           <C>         <C>            <C>         <C>
Compensation expense recognized
----------------------------------------------------------------------------------------------------------------
  for ESOP                                             -            -            -         160,304   $         -

Compensation expense recognized
  for MRDP                                             -            -            -         227,297             -

MRDP shares forfeited                                  -            -            -               -             -

Net change in executive
deferred compensation plan                       (36,329)           -            -         (36,329)            -

Dividends paid ($ .33 per share                        -            -            -        (441,975)            -

Acquisition of 33,760 common
  shares to be held as treasury stock                  -     (402,788)           -        (402,788)            -

Net income                                             -            -            -          63,434        63,434

Net change in unrealized loss
  on securities available-for-sale, net
  of deferred taxes                                    -            -      275,674         275,674       275,674
                                              ----------  -----------    ---------     -----------      --------
Balance, December 31, 1999                    $ (130,587) $(3,585,067)   $(177,814)    $21,586,408      $339,108
                                              ==========  ===========    =========     ===========      ========
</TABLE>

 The notes to consolidated financial statements are an integral part of these
                                  statements.

                                      F-5
<PAGE>

                      CNS BANCORP, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 Years Ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES                                    1997              1998               1999
                                                                ------------------ ------------------ ------------------
<S>                                                             <C>                <C>                <C>
 Net income                                                          $    864,300      $     862,382       $     63,434
 Adjustments to reconcile net income to net cash
   flows provided by operating activities:
     Compensation expense - ESOP                                          284,160            211,782            160,304
     Compensation expense - MRDP                                          103,320            206,640            227,297
     Amortization of premiums on                                           23,666             75,833             47,232
      securities available-for-sale
     Proceeds from the sale of loans held-for-sale                      1,523,816         18,899,608          8,358,384
     Origination of loans held-for-sale                                (1,057,990)       (20,112,977)        (6,562,829)
     Depreciation                                                         127,900            128,345            133,433
     Provision for losses on loans and real estate owned                    5,000             67,989             10,580
     Loss on sale of securities available-for-sale                              -             13,414            755,000
     Loss on sale of assets                                                     -                  -              9,112
     Gain on sales of loans held-for-sale                                 (17,714)          (106,958)           (28,480)
 Adjustments for (increases) decreases in operating
   assets and increases (decreases) in operating
   liabilities:
     Other assets                                                        (484,187)            16,677            212,492
     Accrued expenses and other liabilities                               115,055            (93,626)            72,027
     Income taxes receivable                                              184,568            112,065           (562,684)
                                                                -----------------  -----------------  -----------------

          Net cash provided by operating activities                     1,671,894            281,174          2,895,302
                                                                -----------------  -----------------  -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Loan (originations) payments, net of principal repayments             (1,545,170)        12,951,379          6,030,828
 Purchases of:
     Loans receivable                                                  (4,315,320)        (8,252,738)        (8,604,880)
     Securities available-for-sale                                     (2,401,243)        (2,050,000)        (3,609,385)
 Proceeds from maturity of:
     Securities available-for-sale                                      8,285,624          5,878,401          3,464,723
     Securities held-to-maturity                                                -            276,800                  -
 Proceeds from sales of securities available-for-sale                           -             91,585          5,130,000
 Purchase of real estate held for investment                             (897,543)           (11,390)                 -
 Proceeds from sales of real estate owned                                 244,748                  -             77,332
 Purchase of premises and equipment                                       (95,616)          (114,662)           (43,731)
                                                                -----------------  -----------------  -----------------
          Net cash (used) provided by investing
            activities                                                   (724,520)         8,769,375          2,444,887
                                                                -----------------  -----------------  -----------------
</TABLE>

 The notes to consolidated financial statements are an integral part of these
                                  statements.

                                      F-6
<PAGE>

               CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                 Years Ended December 31, 1996, 1997, and 1998

<TABLE>
<CAPTION>
              CASH FLOWS FROM FINANCING ACTIVITIES                      1997               1998               1999
                                                                -----------------  ----------------  ------------------
<S>                                                             <C>                <C>               <C>
Net (decrease) increase in deposits                                         2,379          (193,645)         (3,782,278)
Net increase (decrease) in borrowed funds                                 595,985           (25,002)            223,363

Net increase (decrease) in advance payments by
  borrowers                                                               (28,470)            5,458               6,444
Change in Company stock held in trust for executive                       (34,968)           68,138             (36,329)
  deferred compensation plan
Funding provided to MRDP trust                                         (1,200,000)                -                   -
Purchase of treasury stock                                                      -        (3,182,279)           (402,788)
Dividends                                                                (363,688)         (400,041)           (441,975)
                                                                -----------------  ----------------  ------------------

               Net cash (used) by financing activities                 (1,028,762)       (3,727,371)         (4,433,563)
                                                                -----------------  ----------------  ------------------
               Increase (decrease) in cash and cash
                equivalents                                               (81,388)        5,323,178             906,626

Cash and cash equivalents at beginning of year                          4,572,026         4,490,638           9,813,816
                                                                -----------------  ----------------  ------------------
Cash and cash equivalents at end of year                           $    4,490,638    $    9,813,816     $    10,720,442
                                                                =================  ================  ==================
Cash paid for:
     Interest                                                      $    3,831,630    $    3,606,418     $     3,235,888
     Income taxes                                                  $      235,328    $      577,128     $       419,590
Non-cash transactions:
     Valuation adjustment for MRDP trust receivable                $       97,741    $       18,003     $             -
     Transfer from loans receivable to foreclosed real
      estate                                                       $            -    $       51,000     $             -
</TABLE>

 The notes to consolidated financial statements are an integral part of these
                                  statements.

                                      F-7
<PAGE>

                      CNS BANCORP, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of operations: CNS Bancorp, Inc. (Company) is a Delaware corporation
incorporated on January 16, 1996, for the purpose of becoming the holding
company of City National Savings Bank, FSB (Bank).The Bank was formerly known as
City National Savings and Loan Association prior to its March 1, 1995 conversion
from a state to a federal charter. On June 16, 1996, the Bank converted from a
mutual to a stock form of ownership and the Company completed its initial public
offering with one-half of the net proceeds used to acquire all of the issued and
outstanding capital stock of the Bank.

The Bank provides a variety of financial services to individuals and corporate
customers through its headquarters office in Jefferson City, Missouri, and its
four branches in Jefferson City, California, Tipton and Waynesville, Missouri.
The Bank's primary deposit products are interest-bearing checking and savings
accounts and certificates of deposit. Its primary lending products are one-to
four-family residential loans.

Principles of consolidation: The accompanying consolidated financial statements
include the accounts of the Company and its wholly owned subsidiary, the Bank.
The Bank's wholly-owned subsidiary is Parity Insurance Agency, Inc. and its
wholly-owned subsidiary is City National Real Estate, Inc. The Bank's
subsidiaries have been relatively inactive in recent years, but are authorized
to sell insurance products as well as develop and sell real estate.

Use of estimates: The preparation of 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 at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for losses on loans and the
valuation of real estate owned held-for-sale. In connection with the
determination of the allowances for losses on loans and real estate owned
held-for-sale, management obtains independent appraisals for significant
properties.

A majority of the Bank's loan portfolio consists of one-to four-family
residential loans in the Central Missouri area. The Central Missouri economy is
primarily dependent upon state government and, to a lesser extent, upon light
manufacturing and agriculture. Accordingly, the ultimate collectibility of a
substantial portion of the Bank's portfolio is susceptible to changes in local
market conditions.

While management uses available information to recognize losses on loans and
foreclosed real estate, future changes to the allowances may be necessary based
on changes in local economic conditions. In addition, regulatory agencies, as an
integral part of their examination process, periodically review the Bank's
allowances for losses on loans and foreclosed real estate. Such agencies may
require the Bank to make changes to the allowances based on their judgments
about information available to them at the time of their examination. Because of
these factors, the likelihood of a material change in the allowances for losses
on loans and real estate owned held-for-sale is more than remote.

Regulation: The Bank is subject to examination and regulation by the Office of
Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC).

                                      F-8
<PAGE>

Cash and cash equivalents:  Cash and cash equivalents are composed of cash,
Federal Home Loan Bank (FHLB) daily time deposits, certificates of deposit and
due from depository institutions. The Bank considers all highly liquid debt
instruments with original maturities when purchased of three months or less to
be cash equivalents.

Securities available-for-sale: Securities available-for-sale consist of mutual
funds, bonds, notes, debentures, and mortgage-backed securities not classified
as trading securities nor as held-to-maturity securities.

Unrealized gains and losses, net of tax, on available-for-sale securities are
reported as a net amount in a separate component of stockholders' equity until
realized.

Any declines in the fair value of individual available-for-sale securities below
their cost that are other than temporary result in write-downs of the individual
securities to their fair value. The related write-downs are included in earnings
as realized losses.

Gains and losses on the sale of securities available-for-sale are determined
using the specific-identification method.

Premiums and discounts are recognized in interest income using the interest
method over the period to maturity.

Loans held-for-sale: Mortgage loans originated and intended for sale in the
secondary market are carried at the lower of cost or estimated market value in
the aggregate. Gains and losses on the sales of these loans are included as
non-interest income.

Loans receivable: Loans receivable that management has the intent and ability to
hold until maturity or pay-off are reported at their outstanding principal
balances adjusted for any charge-offs, the allowance for loan losses, any
deferred fees or costs on originated loans and unamortized premiums or discounts
on purchased loans.

Loan origination fees and certain direct origination costs are capitalized and
recognized as an adjustment of the yield of the related loan. Discounts and
premiums on purchased loans are amortized to income using the interest method
over the remaining period to contractual maturity, adjusted for anticipated
prepayments. Commitment fees and costs relating to commitments, the likelihood
of exercise of which is remote, are recognized over the commitment period on a
straight-line basis. If the commitment is subsequently exercised during the
commitment period, the remaining unamortized commitment fee at the time of
exercise is recognized over the life of the loan as an adjustment of yield.

Uncollectible interest on loans that are contractually past due is charged off,
or an allowance is established based on management's periodic evaluation. The
allowance is established by a charge to interest income equal to all interest
previously accrued and outstanding. Income is subsequently recognized only to
the extent that cash payments are received until, in management's judgment, the
borrower's ability to make periodic interest and principal payments is back to
normal, in which case the loan is returned to accrual status.

The allowance for loan losses is increased by charges to income and decreased by
charge-offs (net of recoveries). Management utilizes a systematic, documented
approach in determining the appropriate level of the allowance for loan losses.
Management's approach, which provides for general and specific allowances, is
based, among other factors, on the Bank's past loan loss and collection
experience, known and inherent risks in the portfolio, adverse situations that
may affect the borrower's ability to repay, the estimated value of any
underlying collateral, and current economic conditions.

                                      F-9
<PAGE>

Management applies its normal loan review procedures in determining when a loan
is impaired. Management considers impaired loans to be all loans classified as
substandard, doubtful, or loss except for smaller balance homogeneous loans
(primarily consumer installment loans) which are collectively evaluated for
impairment. Impaired loans are charged off when deemed to be uncollectible by
management.

Management has elected to continue to use its existing nonaccrual methods for
recognizing interest income on impaired loans.

Real estate owned: Real estate properties acquired through, or in lieu of, loan
foreclosure and held-for-sale are initially recorded at fair value at the date
of foreclosure establishing a new cost basis. After foreclosure, valuations are
periodically performed by management and the real estate is carried at the lower
of carrying amount or fair value less cost to sell. Increases or decreases in
the valuation allowance are charged or credited to income from real estate
owned.

Foreclosed assets held for the production of income are carried at cost, less
accumulated depreciation, computed principally by the straight-line method over
the estimated useful lives of the depreciable assets.

Real estate properties acquired for investment are carried at the lower of cost,
including cost of improvements and amenities incurred subsequent to acquisition,
or net realizable value. Costs relating to development and improvement of
property are capitalized, whereas costs relating to the holding of property are
expensed. The portion of interest costs relating to the development of real
estate is capitalized.

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

Premises and equipment: Land is carried at cost. Buildings and furniture,
fixtures, and equipment are carried at cost, less accumulated depreciation and
amortization computed principally by the straight-line method over the estimated
useful lives of the assets.

Loan servicing: The cost of mortgage servicing rights is amortized in proportion
to, and over the period of, estimated net servicing revenues. Impairment of
mortgage servicing rights is assessed based on the fair value of those rights.
Fair values are estimated using discounted cash flows based on a current market
interest rate. For purposes of measuring impairment, the rights are stratified
based on the following predominant risk characteristics of the underlying loans:
loan type, interest rate, and term. The amount of impairment recognized is the
amount by which the capitalized mortgage servicing rights for a stratum exceed
their fair value.

Transfers of financial assets: Transfers of financial assets are accounted for
as sales, when control over the assets has been surrendered. Control over
transferred assets is deemed to be surrendered when (1) the assets have been
isolated from the Bank, (2) the transferee obtains the right (free of conditions
that constrain it from taking advantage of that right) to pledge or exchange the
transferred assets, and (3) the Bank does not maintain effective control over
the transferred assets through an agreement to repurchase them before their
maturity.

Income taxes: Deferred tax assets and liabilities are reflected at currently
enacted income tax rates applicable to the period in which the deferred tax
assets or liabilities are expected to be realized and settled. As changes in tax
law or rates are enacted, deferred tax assets and liabilities are adjusted
through the provision for income taxes.

Employee stock ownership plan: In conjunction with the Bank's conversion, the
Company formed an ESOP for the benefit of eligible employees. Common stock of
the Company acquired for the ESOP is recorded as deferred compensation, which is
a reduction to stockholders' equity. ESOP shares are considered uncommitted
until such time the shares are released (committed) to the ESOP trustee for
distribution to the plans' participants. As the committed shares are released,
compensation expense is recognized for the then fair value

                                      F-10
<PAGE>

of the stock and deferred compensation for the committed shares is reduced by
the amount of the shares' acquisition cost. Any difference between the
acquisition cost and the then fair value is credited or charged to additional
paid-in capital. Dividends paid on uncommitted ESOP shares are recognized as
compensation expense and dividends paid on allocated shares are recognized as a
reduction of retained earnings.

Earnings per share: Earnings per share of common stock have been computed on the
basis of the weighted average number of shares of common stock outstanding,
including committed ESOP shares and excluding treasury stock. Uncommitted ESOP
shares and granted stock options are included in the weighted average number of
common shares outstanding for computing diluted earnings per share.

Advertising:  The Company expenses the production costs of advertising as
incurred.

Comprehensive income: The Company adopted SFAS No. 130, Reporting Comprehensive
Income, as of January 1, 1998. Accounting principles generally require that
recognized revenues, expenses, gains and losses be included in net income.
Although certain changes in net assets and liabilities, such as unrealized gains
and losses on available-for-sale securities, are reported as a separate
component of the equity section of the statement of financial condition, such
items, along with net income, are components of comprehensive income. The
adoption of SFAS No. 130 had no effect on the Company's net income or
stockholders' equity.

The Company has elected to report its comprehensive income in the consolidated
statement of stockholders' equity. The only element of other comprehensive
income that the Company has is the unrealized gain or losses on
available-for-sale securities.

The components of other comprehensive income and related tax effects for the
years ended are as follows:

<TABLE>
<CAPTION>
                                                                      1997           1998            1999
                                                                    --------       ---------      ----------
<S>                                                                 <C>            <C>            <C>
Unrealized holdings gains (losses) on available-for-sale             $ 4,042        $ 35,131       $(295,541)
  securities
Reclassification adjustment for losses realized in income                  -          13,414         755,000
                                                                    --------       ---------      ----------
Net unrealized gain                                                    4,042          48,545         459,459
Tax effect                                                            (1,374)        (16,505)       (183,785)
                                                                    --------       ---------      ----------
Net-of-tax amount                                                    $ 2,668        $ 32,040       $ 275,674
                                                                    ========       =========      ==========
</TABLE>

                                      F-11
<PAGE>

2.   SECURITIES

The amortized cost and fair values of investment securities at December 31 are
as follows:

<TABLE>
<CAPTION>
                                                                             Gross           Gross
                                                           Amortized      Unrealized      Unrealized         Fair
                          1998                               Cost            Gains          Losses           Value
                                                        ---------------  --------------  --------------  ---------------
<S>                                                     <C>               <C>             <C>               <C>
Available-for-Sale
Mutual funds, which invest in adjustable rate
  mortgage-backed securities of U.S. government
  agencies and short-term government debt
  securities                                              $   5,885,000     $         -     $   575,000     $ 5,310,000
U.S. government and federal agency                            3,850,686          18,591               -       3,869,277
Mortgage-backed securities of U.S. government agencies        8,735,210           5,349         204,753       8,535,806
                                                        ---------------  --------------  --------------  ---------------
                                                          $  18,470,896     $    23,940     $   779,753     $17,715,083
                                                        ===============  ==============  ==============  ===============

                                                                             Gross           Gross
                                                           Amortized      Unrealized      Unrealized         Fair
                          1999                               Cost            Gains          Losses           Value
                                                        ---------------  --------------  --------------  ---------------
<S>                                                     <C>               <C>             <C>               <C>
Available-for-Sale
FHLB certificate of deposit, 5.8% due 4/8/00              $   1,150,000     $         -     $         -     $ 1,150,000
U.S. government and federal agency                            4,507,238               -          37,828       4,469,410
Mortgage-backed securities of U.S. government agencies        7,026,089           3,087         261,616       6,767,560
                                                        ---------------  --------------  --------------  ---------------
                                                          $  12,683,327     $     3,087     $   299,444     $12,386,970
                                                        ===============  ==============  ==============  ===============
</TABLE>

Gross realized and unrealized gains and losses on sales of securities
available-for-sale for the year ended and as of December 31 were as follows:

<TABLE>
<CAPTION>
                                                                      1997               1998               1999
                                                                ------------------   ---------------  -----------------
<S>                                                             <C>                  <C>              <C>
Gross realized gains                                                  $          -   $            -      $           -
Gross realized losses                                                            -          (13,414)          (755,000)
                                                                ------------------  ---------------  -----------------
          Net (loss) on sale of securities (Note 15)                  $          -   $      (13,414)     $    (755,000)

                                                                ==================  ===============  =================

Gross unrealized gains                                                $     33,551   $       23,937      $       3,087
Gross unrealized losses                                                   (842,767)        (779,753)          (299,444)
                                                                ------------------  ---------------  -----------------
          Net unrealized losses                                           (809,216)        (755,816)          (296,357)
Deferred tax asset (Note 7)                                                323,688          302,328            118,543
                                                                ------------------  ---------------  -----------------
          Unrealized loss on securities available-
           for-sale, net of deferred taxes                            $   (485,528)  $     (453,488)     $    (177,814)
                                                                ==================  ===============  =================
</TABLE>

                                      F-12
<PAGE>

The amortized cost and fair value of securities available-for-sale at December
31, 1999, by contractual maturity are shown below. Expected maturities will
differ from contractual maturities as securities may have the right to call or
prepay with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Amounts maturing in:                                        Amortized Cost       Fair Value
                                                            --------------     -------------
<S>                                                         <C>                <C>
One year or less                                            $    3,200,025     $   3,189,559
More than one year less than five years                          2,457,213         2,429,851
Mortgage-backed securities                                       7,026,088         6,767,560
                                                            --------------     -------------
                                                            $   12,683,326     $  12,386,970
                                                            ==============     =============
</TABLE>

The investment in FHLB stock of $662,500 at December 31, 1998 and 1999 is
recorded at cost and is considered a restricted asset.

The Bank has pledged certain mortgage-backed securities to secure advances from
the FHLB. At December 31, 1998 and 1999, these pledged assets had a carrying
value of $1,683,476 and $1,407,310 respectively.


3.   LOANS RECEIVABLE

Loans receivable at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                                  1998              1999
                                                               -----------      ------------
<S>                                                            <C>              <C>
Mortgage loans (principally conventional):
  One-to four-family residences                                $45,495,028      $ 45,213,880
  Other properties                                              13,007,630        13,001,467
  Construction loans                                             3,087,108         3,399,010
  Land                                                              69,176           132,949
                                                               -----------      ------------
                                                                61,658,942        61,747,306
Less:
  Undisbursed portion of mortgage loans                          2,239,218         2,377,346
  Net deferred loan-origination fees                                10,203            10,582
                                                               -----------      ------------
Net mortgage loans                                              59,409,521        59,359,378
                                                               -----------      ------------
Commercial loans                                                 1,156,858         3,193,067
                                                               -----------      ------------
Consumer and other loans:
  Automobile                                                       512,494           998,239
  Manufactured home                                                 46,234            44,737
  Share loans                                                      613,994           771,988
  Other                                                            370,609           314,831
                                                               -----------      ------------
                                                                 1,543,331         2,129,795
                                                               -----------      ------------
Net loans before allowance for loan losses                      62,109,710        64,682,240
Less allowance for loan losses                                     409,798           418,856
                                                               -----------      ------------
Loans receivable, net                                          $61,699,912      $ 64,263,384
                                                               ===========      ============
</TABLE>

Loans held-for-sale of $1,767,075 and $0 at December 31, 1998 and 1999,
respectively, are carried at cost, which approximated market value at year-end.

                                      F-13
<PAGE>

Activity in the allowance for loan losses is summarized as follows for the years
ended December 31:

<TABLE>
<CAPTION>
                                                            1997        1998        1999
                                                         --------- ----------- -----------
<S>                                                      <C>       <C>         <C>
Beginning balance                                         $382,449    $387,449    $409,798
Provision charged to income                                  5,000      62,889      10,580
Charge-offs                                                      -     (40,540)     (1,522)
                                                         --------- ----------- -----------
Ending balance                                            $387,449    $409,798    $418,856
                                                         ========= =========== ===========
</TABLE>

Loans to directors and executive officers approximated $522,000 and $652,000 as
of December 31, 1998 and 1999, respectively.

The following information relates to impaired loans as of and for the years
ended December 31, 1998 and 1999:

<TABLE>
<CAPTION>
                                                                                        1998         1999
                                                                                      --------     --------
<S>                                                                                   <C>          <C>
Recorded investment in impaired loans for which a valuation allowance of $10,000      $ 19,270     $ 18,313
and $11,215 is provided for 1998 and 1999, respectively, based upon the measure
of  the loan's fair value of underlying collateral

Recorded investment in impaired loans for which there is no need for a valuation       156,103      190,455
allowance, based upon the measure of the loan's fair value of underlying
collateral
                                                                                      --------     --------
               Total recorded investment in impaired loans                            $175,373     $208,768
                                                                                      ========     ========
Average recorded investment in impaired loans                                         $156,302     $106,516
                                                                                      ========     ========
</TABLE>

Interest income recognized for cash payments received on impaired loans during
1998 and 1999 totaled $10,466 and $19,303, respectively.


4.   ACCRUED INTEREST RECEIVABLE

Accrued interest receivable at December 31 is summarized as follows:

<TABLE>
<CAPTION>
                                                                                        1998         1999
                                                                                    ----------     --------
<S>                                                                                 <C>            <C>
Investment securities                                                                 $ 94,563     $112,777
Mortgage-backed securities                                                              65,473       50,869
Loans receivable and loans held-for-sale                                               401,139      411,237
                                                                                    ----------     --------
                                                                                      $561,175     $574,883
                                                                                    ==========     ========
</TABLE>

                                      F-14
<PAGE>

5.   REAL ESTATE OWNED

Real estate owned consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                               1998         1999
                                                                            ----------   ----------
<S>                                                                         <C>          <C>
Real estate acquired for investment                                         $  664,185   $  621,591
Foreclosed real estate held-for-sale                                            51,000            -
                                                                            ----------   ----------
                                                                               715,185      621,591
Allowance for losses                                                            (5,100)           -
                                                                            ----------   ----------
                                                                            $  710,085   $  621,591
                                                                            ==========   ==========
</TABLE>

The real estate acquired for investment consisted of an equity interest in a
joint venture engaged in the development of real estate which was fully acquired
by the Company in 1999.

Income (loss) from real estate owned for the years ended December 31 is as
follows:

<TABLE>
<CAPTION>
                                                                   1997          1998       1999
                                                              -----------     --------     --------
<S>                                                           <C>             <C>          <C>
Income (loss) from real estate owned, net                         $11,790      $(4,040)    $      -
Net loss on sale of real estate owned                                   -            -      (11,162)
                                                              -----------     --------     --------
                                                                  $11,790      $(4,040)    $(11,162)
                                                              ===========     ========     ========
</TABLE>

The Company had a provision for loss on foreclosed real estate in the amount of
$0, $5,100 and $0 in 1997, 1998, and 1999, respectively.

6.   PREMISES AND EQUIPMENT

Premises and equipment at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                                               1998          1999
                                                                           -----------   -----------
<S>                                                                        <C>           <C>
Land                                                                       $   237,356   $   237,356
Buildings                                                                    2,131,701     2,135,058
Furniture, fixtures and equipment                                              487,410       492,932
                                                                           -----------   -----------
                                                                             2,856,467     2,865,346
Accumulated depreciation                                                    (1,245,013)   (1,343,594)
                                                                           -----------   -----------
                                                                           $ 1,611,454   $ 1,521,752
                                                                           ===========   ===========
</TABLE>

Depreciation expense for the years ended December 31, 1997, 1998, 1999 totaled
$127,900, $128,345, and $133,433, respectively.

                                      F-15
<PAGE>

7.   INCOME TAXES

The Company and its subsidiaries file consolidated federal income tax and
individual state tax returns on a calendar year basis. Historically, the Bank
was allowed a special bad-debt deduction based on a percentage of taxable income
or on specified experience formulas. The Small Business Job Protection Act of
1996 (Act) repealed the percentage of taxable income method of computing bad
debt deductions for tax years beginning after December 31, 1995. Effective 1996,
the Bank was required to compute its bad debt deduction based on specified
experience formulas. The Act also required the Bank to bring into taxable income
post-1987 tax bad debt reserves. Tax on this income will be payable over a six
year period beginning in 1998 and is included in deferred taxes in the
accompanying consolidated statements of financial condition.

Generally accepted accounting principles allow an exception to providing a
deferred tax liability on bad debt reserves for tax purposes of qualified thrift
lenders such as the Bank that arose in fiscal years beginning before December
31, 1987. Such bad debt reserve for the Bank amounted to approximately
$2,932,000 with an income tax effect of approximately $997,000 at December 31,
1999. This bad debt reserve would become taxable if the Bank does not maintain
certain qualifying assets as defined, if the reserve is charged for other than
bad debt losses, if the Bank does not maintain its thrift charter, or in the
event of a merger, if the surviving entity is not a bank. However, in the event
of a merger, if the surviving entity is not a thrift, a deferred tax liability
would have to be provided on such bad debt reserve which arose in fiscal years
beginning before December 31, 1987. No deferred taxes for such bad debt reserve
have been included in these financial statements.

Income taxes receivable (payable) at December 31 are summarized as follows:

                                                         1998          1999
                                                      ---------     ---------
Current                                               $(166,105)    $  56,061
Deferred                                                332,461       489,196
                                                      ---------     ---------
          Income taxes receivable                     $ 166,356     $ 545,257
                                                      =========     =========

At December 31, 1999 and 1998, a valuation allowance wasn't needed for deferred
income taxes.

The consolidated provision (benefit) for income taxes consisted of the following
for the years ended December 31:

                                           1997          1998         1999
                                         --------      --------     ---------
Federal:
  Current                                $293,982      $397,793     $ 306,557
  Deferred                                111,541       123,542      (340,520)
                                         --------      --------     ---------
                                          405,523       521,335       (33,963)
State:
  Current                                  39,741        65,679        74,652
                                         --------      --------     ---------
       Provision for income taxes        $445,264      $587,014     $  40,689
                                         ========      ========     =========

                                      F-16
<PAGE>

Differences between the statutory federal income tax rates and the effective tax
rates are summarized as follows:

<TABLE>
<CAPTION>
                                                                        1997     1998     1999
                                                                     --------  -------  --------
     <S>                                                             <C>       <C>      <C>
     Statutory federal income tax rates                                 34.0%    34.0%    34.
     Increase (decrease) resulting from:
          State income taxes, net of federal tax benefit                 6.2%     4.8%     6.7%
          Tax-exempt interest                                           (1.4)%   (0.8)%   (1.9)%
          Other                                                         (4.8)%    2.5%     0.3%
                                                                     -------   ------   ------
                                                                        34.0%    40.5%    39.1%
                                                                     =======   ======   ======
</TABLE>

The tax effects of temporary differences between the financial reporting basis
and income tax basis of assets and liabilities that are included in the net
deferred tax asset at December 31 relate to the following:

<TABLE>
<CAPTION>
                                                                           1998            1999
                                                                        ----------     ------------
<S>                                                                     <C>            <C>
Deferred tax assets:
 Allowances for losses on loans                                         $   95,126         $116,535
 Deferred compensation                                                      46,464           65,847
 Unrealized loss on securities available-for-sale (Note 2)                 302,328          118,543
 Contribution carryforward                                                 276,430          261,422
 Capital loss carryforward                                                       -          317,546
 Other                                                                      21,253           43,558
                                                                        ----------     ------------
                   Total deferred tax assets                               741,601          923,451
                                                                        ----------     ------------
Deferred tax liabilities:
 FHLB stock dividends                                                      127,305          138,141
 Cash/accrual differences                                                    7,492            5,806
 Involuntary conversion                                                    166,684          174,141
 Mortgage servicing rights                                                 107,659          116,167
                                                                        ----------     ------------
                   Total deferred tax liabilities                          409,140          434,255
                                                                        ----------     ------------
                   Net deferred tax asset                               $  332,461         $489,196
                                                                        ==========     ============
</TABLE>

8.   OTHER ASSETS

Other assets at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                                           1998               1999
                                                                        ----------        -----------
<S>                                                                     <C>               <C>
Mortgage servicing rights, net (Note 9)                                   $277,757           $276,200
Equity interest in joint venture partnership (residential                  219,616                  -
  construction)
Deferred directors fees                                                    101,067            102,899
Miscellaneous                                                               94,749             89,940
                                                                        ----------        -----------
                                                                          $693,189           $469,039
                                                                        ==========        ===========
</TABLE>

                                      F-17
<PAGE>

9.   LOAN SERVICING

Mortgage loans serviced for others are not included in the accompanying
consolidated statements of financial condition. The unpaid principal balance of
mortgage loans serviced for others was $33,065,560 and $36,190,419 at December
31, 1998 and 1999, respectively.

Custodial escrow balances maintained in connection with the foregoing loan
servicing were $29,206 and $21,525 at December 31, 1998 and 1999, respectively.

Activity of mortgage servicing rights (MSR's) for the years ended December 31
was as follows:

                                                       1998           1999
                                                     --------       --------
Beginning balance                                    $ 33,156       $277,757
MSR's capitalized (Note 15)                           251,747         51,171
Amortization of MSR's                                  (7,146)       (52,728)
                                                     --------       --------
Ending balance                                       $277,757       $276,200
                                                     ========       ========

The unamortized balance approximates the fair value at December 31, 1998 and
1999, respectively, and is included in other assets in the accompanying
consolidated statement of financial condition.


10.  DEPOSITS

Deposits at December 31 are summarized as follows:

                                                         1998            1999
                                                     -----------      ----------
Demand deposits                                      $   945,322      $ 1,213,60
Savings deposits                                      17,092,782       16,990,73
Time deposits                                         54,651,061       50,702,55
                                                     -----------      ----------
                                                     $72,689,165      $68,906,88
                                                     ===========      ==========

The aggregate amount of short-term certificates of deposit with a minimum
denomination of $100,000 was approximately $2,755,000 and $2,375,000 at December
31, 1998 and 1999, respectively. The portions of deposits which exceed $100,000
are not federally insured.

At December 31, 1999, scheduled maturities of time deposits are as follows:

<TABLE>
<CAPTION>
                                                   Year Ending December 31,
                                 ------------------------------------------------------------
Interest Rates:                      2000        2001        2002        2003        Total
                                 -----------  ----------  ----------  ----------  -----------
<S>                              <C>          <C>         <C>         <C>         <C>
         0.0 to 3.99%            $    10,000  $        -  $        -  $        -  $    10,000
         4.0 to 4.99%             21,683,168   3,069,949     574,498   1,129,249   26,456,864
         5.0 to 5.99%             15,409,839   5,466,787   1,925,703     924,616   23,726,945
         6.0 to 6.99%                334,335     174,407           -           -      508,742
                                 -----------  ----------  ----------  ----------  -----------
                                 $37,437,342  $8,711,143  $2,500,201  $2,053,865  $50,702,551
                                 ===========  ==========  ==========  ==========  ===========
</TABLE>

                                      F-18
<PAGE>

11.  BORROWED FUNDS

Borrowed funds at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                                                   1998               1999
                                                                                 --------           --------
<S>                                                                              <C>                <C>
Advance from FHLB,  6.35% fixed interest rate due 10/03/12 with an               $570,983           $544,346
  original principal amount of $600,000
Advance from FHLB, 5.62% fixed interest rate due 01/10/00                               -            250,000
                                                                                 --------           --------
                                                                                 $570,983           $794,346
                                                                                 ========           ========
</TABLE>

Information concerning advances from the FHLB is summarized as follows:

<TABLE>
<CAPTION>
                                                                                   1998               1999
                                                                                 --------           --------
<S>                                                                              <C>                <C>
Average balance during the year                                                  $583,615           $568,221
Maximum month end balance during the year                                        $594,973           $794,346
Weighted average interest rate during the year                                       6.51%              6.33%
</TABLE>

Interest expense on borrowed funds for the years ended December 31 is summarized
as follows:

<TABLE>
<CAPTION>
                                                              1997             1998             1999
                                                            --------         -------          -------
<S>                                                         <C>              <C>              <C>
Advances from the FHLB                                       $10,298         $37,638          $35,980
                                                            ========         =======          =======
</TABLE>

The Bank has signed a blanket pledge agreement with the FHLB under which it can
draw advances of unspecified amounts from the FHLB. The Bank pledges
mortgage-backed securities to secure such advances.

The following represents amounts due on the advances from the FHLB as of
December 31, 1999:

          2000                                 $278,378
          2001                                   30,233
          2002                                   32,212
          2003                                   34,316
          2004                                   36,559
          Thereafter                            382,648
                                               --------
                                               $794,346
                                               ========

12.  REGULATORY CAPITAL

The 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
Bank's financial statements. The regulations require the Bank to meet specific
capital adequacy guidelines that involve quantitative measures of the Bank's
assets, liabilities, and certain off-balance sheet items as calculated under
regulatory accounting practices. The Bank's capital amounts and classification
are also subject to qualitative judgements by the regulators about components,
risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of Tangible, Tier I, and Risk-based capital (as defined in the
regulations). Management believes, as of December 31, 1999, the Bank meets all
capital adequacy requirements to which it is subject.

                                      F-19
<PAGE>

As of December 31, 1998 and 1999, the most recent notification from the OTS
categorized the Bank as well-capitalized under the regulatory framework for
prompt corrective action. A well-capitalized institution significantly exceeds
the required minimum level for each relevant capital measure. There are no
conditions or events since that notification that management believes have
changed the institution's category.

<TABLE>
<CAPTION>
                                                                     (Dollars in thousands)

                                                                                                   To Be Well
                                                                                                 Capitalized For
                                                                      Minimum For Capital       Prompt Corrective
                                                   Actual              Adequacy Purposes        Action Provisions
                                          -----------------------  ------------------------- -----------------------
                                            Ratio        Amount      Ratio       Amount        Ratio       Amount
                                          ----------  ------------ ---------  -------------- ---------  ------------
<S>                                       <C>         <C>          <C>        <C>            <C>        <C>
As of December 31, 1998:

         Stockholders' equity, and ratio
           to total assets                    20.3%        $19,026
                                          ========
         Unrealized loss on securities
          available-for-sale                                   453
                                                      ------------
         Tangible capital, and ratio to
          adjusted total assets               20.7%        $19,479    1.5%            $1,415
                                          ========    ============ ======     ==============
         Tier 1 (core) capital, and
          ratio to adjusted total assets      20.7%        $19,479    4.0%            $3,772      5.0%          $4,715
                                          ========    ============ ======     ============== ========   ==============
         Tier 1 capital, and ratio to
          risk-weighted assets                40.9%        $19,479                                6.0%          $2,857
                                          ========                                           ========   ==============
         Allowance for loan and lease
          losses                                               398
                                                      ------------
         Total risk-based capital, and
          ratio to risk-weighted assets       41.7%        $19,877    8.0%            $3,809     10.0%          $4,761
                                          ========    ============ ======    =============== ========   ===============
         Total assets                                      $93,849
                                                      ============
         Adjusted total assets                             $94,302
                                                      ============
         Risk-weighted assets                              $47,613
                                                      ============
</TABLE>

                                      F-20
<PAGE>

<TABLE>
<CAPTION>
                                                                                                   To Be Well
                                                                                                 Capitalized For
                                                                      Minimum For Capital       Prompt Corrective
                                                   Actual              Adequacy Purposes        Action Provisions
                                          ------------------------ ------------------------- -----------------------
                                            Ratio        Amount      Ratio       Amount        Ratio       Amount
                                          ----------  ------------ ---------  -------------- ---------  ------------
<S>                                       <C>         <C>          <C>        <C>            <C>        <C>
As of December 31, 1998:

         Stockholders' equity, and ratio
           to total assets                    19.9%        $17,734
                                          ========
         Unrealized loss on securities
          available-for-sale                                   178
                                                      ------------
         Tangible capital, and ratio to
          adjusted total assets               20.1%        $17,912    1.5%            $1,340
                                          ========    ============ ======     ==============
         Tier 1 (core) capital, and
          ratio to adjusted total assets      20.1%        $17,912    4.0%            $3,573      5.0%          $4,466
                                          ========    ============ ======     ============== ========   ==============
         Tier 1 capital, and ratio to
          risk-weighted assets                35.3%        $17,912                                6.0%          $3,044
                                          ========                                           ========   ==============
         Allowance for loan and lease
          losses                                               408
                                                      ------------
         Total risk-based capital, and
          ratio to risk-weighted assets       36.1%        $18,320    8.0%            $4,059     10.0%          $5,074
                                          ========    ============ ======    =============== ========   ===============
         Total assets                                      $89,142
                                                      ============
         Adjusted total assets                             $89,320
                                                      ============
         Risk-weighted assets                              $50,736
                                                      ============
</TABLE>

13.  CONVERSION TO STOCK OWNERSHIP

On December 19, 1995, the Board of Directors of the Bank adopted a plan of
conversion pursuant to which the Bank converted from a federally-chartered
mutual savings bank to a federally-chartered stock savings bank with the
concurrent formation of the holding company which acquired all of the common
stock of the Bank. On June 10, 1996, the Company sold 1,653,125 shares of common
stock at $10 per share to eligible purchasers, including depositors of the Bank.
Total proceeds from the conversion, after deducting conversion expenses of
$531,424, were $15,999,826 and are reflected as common stock and additional
paid-in capital in the accompanying consolidated statements of financial
condition. The Company utilized $7,999,913 of the net proceeds to acquire all of
the common stock of the Bank. The Company was also authorized to issue 1,000,000
shares of $.01 par value preferred stock. As of December 31, 1999, no shares of
preferred stock have been issued.

As part of the conversion, the Bank established a liquidation account for the
benefit of eligible depositors who continue to maintain their deposit accounts
in the Bank after conversion. In the unlikely event of a complete liquidation of
the Bank, and only in such event, each eligible depositor will be entitled to
receive a liquidation distribution from the liquidation account in the
proportionate amount of the then-current adjusted balance for deposit accounts
held, before distribution may be made with respect to the Bank's capital stock.
The Bank may not declare or pay a cash dividend to the Company on, or repurchase
any of, its capital stock if the effect

                                      F-21
<PAGE>

thereof would cause the retained earnings of the Bank to be reduced below the
amount required for the liquidation account. Except for such restrictions, the
existence of the liquidation account does not restrict the use or application of
retained earnings.

The Bank's capital exceeds all of the fully phased-in capital requirements
imposed by OTS. OTS regulations provide that an institution that exceeds all
fully phased-in capital requirements before and after a proposed capital
distribution and, like the Bank, has not been notified of a need for more than
normal supervision could, after prior notice but without approval by the OTS,
make capital distributions during the calendar year of up to 100% of its net
income to date during the calendar year plus the amount that would reduce by
one-half its "surplus capital ratio" (the excess capital over its fully
phased-in capital requirements) at the beginning of the calendar year. Any
additional capital distributions would require prior regulatory approval.

Unlike the Bank, the Company is not subject to these regulatory restrictions on
the payment of dividends to its stockholders. However, the source of future
dividends may depend upon dividends from the Bank.

14.  BENEFIT PLANS

Pension plan: The Bank maintains a non-contributory defined benefit pension plan
for the benefit of eligible employees. This plan covers all employees who have
completed one year of service and have attained the age of 21 years and provides
for monthly retirement benefits determined on the basis of the employee's base
salary and years of service. The normal retirement age is 65 and the early
retirement age is before age 65, but generally after age 55. Benefits under the
plan are not subject to offset for social security benefits. Under the plan,
benefits vest at the rate of 20% per year beginning with a participant's third
year of service. The Bank's funding policy is to make, as a minimum
contribution, the equivalent of the minimum required by the Employee Retirement
Income Security Act of 1974.

As of December 31, 1999, the accrual of future benefits was frozen by plan
amendment. The suspension of plan benefits resulted in a curtailment gain of
$93,000 based upon actuarial calculations of the benefit obligation at December
31, 1999.

The following table sets forth the plan's funded status at the plan's year end
of December 31:

<TABLE>
<CAPTION>
                                                                              (Dollars in thousands)
                                                                             1998               1999
                                                                           --------            -------
<S>                                                                        <C>                 <C>
Change in benefit obligation:
  Benefit obligation at beginning of year                                  $   607             $  751
     Service cost                                                               60                 63
     Interest cost                                                              45                 48
     Actuarial loss (gain)                                                     (47)                (3)
     Benefits paid                                                              (2)               (21)
     Change due to suspension of plan benefits (curtailment gain)                -                (93)
     Change in actuarial assumptions for discount rate and long term
       rate of return                                                           88                  -
                                                                           -------             ------
  Benefit obligation at end of year                                        $   751             $  745
                                                                           =======             ======
</TABLE>

                                      F-22
<PAGE>

<TABLE>
<S>                                                          <C>         <C>
Change in plan assets:
  Fair value of plan assets at beginning of year             $  559      $  635
     Actual return on plan assets                                22          30
     Employer contribution                                       56          63
     Benefits paid                                               (2)        (21)
                                                             ------      ------
  Fair value of plan assets at end of year                   $  635      $  707
                                                             ======      ======

Funded status:
  Funded status at December 31                               $ (116)     $  (38)
  Unrecognized net actuarial (gain)                             (39)       (122)
  Unrecognized transition amount                                 97          86
                                                             ------      ------
  (Accrued) pension cost                                     $  (58)     $  (74)
                                                             ======      ======
</TABLE>

The components of net periodic pension cost for each of the years ended December
31 were as follows:

<TABLE>
                                                               (Dollars in thousands)
                                                          1997           1998        1999
                                                        --------       --------     -------
     <S>                                                <C>            <C>          <C>
     Service cost                                       $     57       $     60     $    63
     Interest cost on projected benefit obligation            38             45          48
     Expected return on plan assets                          (39)           (39)        (43)
     Asset (gain) or loss                                    (19)            17          13
     Net amortization and deferral                            27             (6)         (2)
                                                        --------       --------     -------
               Net periodic pension cost                $     64       $     77     $    79
                                                        ========       ========     =======
</TABLE>

Actuarial assumptions were as follows for the years ended December 31:

<TABLE>
                                                       1997         1998      1999
                                                      ------       ------    -------
<S>                                                   <C>          <C>       <C>
Weighted-average discount rate                         7.00%        6.50%      6.50%
Expected long term rate of return                      7.25%        6.50%      6.50%
Rate of increase in future compensation levels         3.50%        3.50%      3.50%
</TABLE>

Executive deferred compensation plan: The Bank maintains a non-qualified
deferred compensation plan for a select group of management employees. Under the
plan, eligible employees may elect to defer up to 30% of annual compensation.
The Bank credits employee deferrals with interest based on the Bank's rate for a
certificate of deposit with a term of one year, as well as changes in values of
assets set aside in a revocable trust established in 1996. Upon termination of
employment, the balance of the employee's deferred compensation account is
distributable in a lump sum or in installments over a number of years specified
by the employee. At December 31, 1998 and 1999, the Bank had an accrued
liability with respect to the plan of $119,881 and $156,334, respectively.

Employee stock ownership plan: In conjunction with the Bank's conversion, the
Company formed an ESOP which covers substantially all employees with more than
one year of employment, who have completed 1,000 hours of service, and who have
attained the age of 21. The ESOP borrowed $1,322,500 from the Company and
purchased 132,250 common shares, equal to 8% of the total number of shares
issued in the conversion. The ESOP debt is secured by shares of the Company. The
Bank will make scheduled discretionary contributions to the ESOP sufficient to
service the debt. The balance outstanding on this debt was $1,032,453 and
$923,896 at December 31, 1998 and 1999, respectively. As the debt is paid down,
the number of shares to be released from

                                      F-23
<PAGE>

serving as collateral is computed as the ratio of the current principal and
interest paid to the estimated total principal and interest to be paid. Deferred
compensation relating to the ESOP was $951,361 and $820,084 at December 31, 1998
and 1999, respectively, and is reported as a reduction of stockholders' equity.
Compensation expense totaled $284,160, $211,782 and $160,304 for 1997, 1998 and
1999, respectively.

During 1997, all dividends on unallocated ESOP shares were used to reduce the
ESOP debt. During 1998 and 1999, all dividends on unallocated ESOP shares were
paid to the ESOP for future distribution to plan participants.

The following is a summary of ESOP shares at December 31:

<TABLE>
<CAPTION>
                                                            1998               1999
                                                        ----------         ----------
     <S>                                                <C>                <C>
     Allocated shares                                       36,589             45,617
     Uncommitted shares                                     95,136             82,008
                                                        ----------         ----------
          Total ESOP shares                                131,725            127,625
                                                        ==========         ==========
          Fair value of uncommitted shares              $1,064,334         $1,271,124
                                                        ==========         ==========
</TABLE>

ESOP participants entitled to a distribution have the right to demand such
distribution in the form of the Company's common stock. In the event that the
Company's common stock is not readily tradeable on an established market,
participants are entitled to require that the Company repurchase the common
stock under a fair valuation formula, as provided by governmental regulations.

Management recognition and development plan: In conjunction with the Bank's
conversion, the Company formed an MRDP which is authorized to award 4% of the
total shares of common stock issued in the conversion. During 1997, a trust was
established to purchase the MRDP shares from the open market with $1,200,000 in
funds transferred from the Company. The trust was revocable by the Company upon
completion of its intended purpose. As of December 31, 1997, 48,025 shares had
been purchased by the trust with 18,100 shares still to be acquired. As of
December 31, 1998, all 66,125 shares have been purchased and the trust has been
terminated.

As of December 31, 1998 and 1999, the Company had awarded a total of 66,125
shares of common stock to directors and employees in key management positions in
order to provide them with a proprietary interest in the Company in a manner
designed to encourage such employees to remain with the Company. As of December
31, 1998 and 1999, there were no common shares remaining to be awarded under the
Plan.

Deferred compensation, representing the shares' fair market value at the date of
award, is charged to income on a straight-line basis over the five year vesting
period as the Bank's directors and employees perform the related future
services. The unamortized balance of $723,243 and $487,665 as of December 31,
1998 and 1999, respectively, is reflected as a reduction of stockholders'
equity. The Company recognized $103,320, $206,640 and $227,297 as compensation
and benefits expense relating to this plan for the years ended December 31,
1997, 1998 and 1999 respectively.

Stock option and incentive plan: In conjunction with the Bank's conversion, the
Company established a stock option and incentive plan for the benefit of
directors and employees of the Company and Bank. The plan became effective upon
its adoption by the Board of Directors of the Company and approval of the plan
by the stockholders' of the Company in June, 1997. The number of authorized but
unissued shares reserved under the plan is 165,313. Granted stock options are
regarded as common stock equivalents and are considered in earnings per share
calculations. At both December 31, 1998 and 1999, no options have been exercised
nor stock issued for this plan.

                                      F-24
<PAGE>

The stock options may be either incentive stock options or nonqualified stock
options. Incentive stock options can be granted only to participants who are
employees of the Company or its subsidiaries. The exercise price of an incentive
stock option must not be less than the market value of the Company's stock on
the date of the grant. All options expire no later than 10 years from the date
of grant. The options vest at the rate of 20% per year over a five-year period.

A summary of the status of the plan at December 31, 1997, 1998 and 1999 is
presented below:

<TABLE>
<CAPTION>
                                               1997                        1998                        1999
                                    --------------------------- --------------------------- ----------------------------
                                       Shares      Weighted        Shares      Weighted        Shares       Weighted
                                                    Average                     Average                     Average
                                                   Exercise                    Exercise                  Exercise Price
                                                     Price                       Price
                                    ------------  ------------- ------------  ------------- ------------ ---------------
     <S>                            <C>           <C>           <C>           <C>           <C>          <C>
     Stock options:
     Outstanding, January 1                    -                     132,590    $   15.625       132,590    $    15.625

              Granted                    132,590   $   15.625              -                           -

              Exercised                        -                           -                           -

              Forfeited                        -                           -                           -
                                    ------------                ------------                ------------
     Outstanding, December 31            132,590   $   15.625        132,590    $   15.625       132,590    $    15.625
                                    ============                ============                ============
     Options exercisable,
     December 31                               -                      26,518                      57,995
                                    ============                ============                ============
</TABLE>

The fair value of each option granted is estimated on the date of the grant
using the Black-Scholes pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
                                                                      1997               1998               1999
                                                                ------------------ ------------------ -----------------
     <S>                                                        <C>                <C>                <C>
     Expected dividend yield                                                1.75%              3.00%              3.60%
     Risk-free interest rate                                                5.63%              5.63%              6.43%
     Expected life of options                                             5 years            5 years            5 years
     Expected volatility                                                    0.195              0.219              0.264
</TABLE>

The following table summarizes information about stock options under the plan
outstanding at December 31, 1999:

<TABLE>
<CAPTION>
                               Options Outstanding                      Options Exercisable
                        ------------------------------------- ------------------------------------
       Range of             Number           Remaining             Number           Exercise
    Exercise Prices      Outstanding     Contractual Life        Exercisable          Price
----------------------- ------------- ----------------------- ----------------- ------------------
<S>                     <C>           <C>                     <C>               <C>
        $15.625            132,590           7.5 years             57,995            $15.625
</TABLE>

                                      F-25
<PAGE>

The Company applies APB Opinion 25 and related Interpretations in accounting for
its plans, and no compensation cost has been recognized for the plan. Had
compensation cost for the Company's plan been determined based on the fair value
at the grant dates using Statement of Financial Accounting Standards No. 123,
the Company's net income would have decreased by approximately $58,000 and
$65,000 for 1998 and 1999 and basic and diluted earnings per share would each
have decreased by $.04 and $.05 for 1998 and 1999, respectively. The effects of
applying this statement for either recognizing compensation cost or providing
pro forma disclosures are not likely to be representative of the effects on
reported net income for future years because options vest over several years.

Executive employment agreement: Under an employment agreement with the President
and Chief Executive Officer, the Company and the Bank will provide severance
payments in the event of an involuntary termination of employment in connection
with a change in control of the Company, as defined in the contract. If the
employment of the President and Chief Executive Officer were to be terminated as
of December 31, 1999 pursuant to a change in control, he would be entitled to
receive a severance payment amounting to approximately $408,000.

Stock held in trust for executive deferred compensation plan: The Bank holds
8,425 shares of the Company's common stock in a revocable trust as assets set
aside for the Bank's executive deferred compensation plan. Such stock is
recorded at its fair value and, combined with miscellaneous cash funds in the
trust, results in a value of $94,258 and $130,587 as of December 31, 1998 and
1999, respectively, which is reported as a reduction of stockholders' equity in
the accompanying consolidated statements of financial condition.


15.  NET GAIN (LOSS) ON SALE OF ASSETS

Net gain (loss) on sale of assets for each of the years ended December 31 is
summarized as follows:

<TABLE>
<CAPTION>
                                                                    1997            1998            1999
                                                               -------------   -------------   ------------
     <S>                                                       <C>             <C>             <C>
     Net (loss) on sale of securities (Notes 2 and 20)           $       -       $ (13,414)     $ (755,000)
     Net gain on sale of loans held-for-sale                        17,714         106,952          28,480
     Capitalized mortgage servicing rights (Note 9)                      -         251,747          51,171
     Net gain on sale of other assets                                    -               -           2,050
                                                               -----------     -----------     -----------
                                                                 $  17,714       $ 345,285      $ (673,299)
                                                               ===========     ===========     ===========
</TABLE>

16.  OTHER NON-INTEREST INCOME AND EXPENSES

Other non-interest income and expense amounts are summarized as follows for each
of the years ended December 31:

<TABLE>
<CAPTION>
                                                              1997         1998         1999
                                                           ---------     --------     --------
<S>                                                        <C>           <C>          <C>
Other non-interest income:
     Banking service charges and other fees                  $59,904      $64,658      $92,428
     Loan late charges                                        15,629       13,513       10,793
     Commission income                                         6,433        5,041        3,865
     Other miscellaneous                                      25,093       13,065       22,071
                                                           ---------     --------     --------
                                                            $107,059      $96,277     $129,157
                                                           =========     ========     ========
</TABLE>

                                      F-26
<PAGE>

<TABLE>
<CAPTION>
                                                       1997          1998         1999
                                                    ----------    ----------   ----------
<S>                                                 <C>           <C>          <C>
Other non-interest expense:
  Stationery, printing and other supplies             $ 54,425      $ 53,803     $ 58,730
  Telephone and postage                                 41,729        41,041       48,563
  Insurance and surety bond premiums                    34,757        26,403       28,567
  Professional fees                                     72,650        85,294      253,299
  Supervisory examinations                              29,962        30,116       28,607
  Other operating expenses                             177,849       154,558      139,844
  Data processing                                      136,904       144,107      154,383
  Advertising and promotions                           111,190       108,379      100,062
                                                    ----------    ----------   ----------
                                                      $659,466      $643,701     $812,055
                                                    ==========    ==========   ==========
</TABLE>

17.  EARNINGS PER SHARE

Earnings per share (EPS) for the years ended December 31, 1997, 1998 and 1999,
were calculated as follows:

<TABLE>
<CAPTION>
                                         1997                          1998                          1999
                             ---------------------------  ----------------------------   -----------------------------
                                 Weighted                      Weighted                     Weighted
                                 Average                       Average                       Average
                                  Shares       Per-share        Shares       Per-share       Shares        Per-share
                              (denominator)      amount     (denominator)     amount      (denominator)     amount
                             ----------------  ---------  -----------------  ---------   ---------------   -----------
<S>                          <C>               <C>        <C>                <C>         <C>               <C>
Basic EPS                           1,536,096    $0.56            1,499,045    $0.58           1,337,595     $0.05
                                               =========                     =========                     ===========

Effect of dilutive shares
  Unallocated ESOP shares             117,029                       102,234                       89,106
  Stock options                         4,534                         2,804                            -
                             ----------------              ----------------              ---------------

Diluted EPS                         1,657,659    $0.52            1,604,083    $0.54           1,426,701     $0.05
                             ================  =========   ================  =========   ===============   ===========
</TABLE>

18.  FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

The Company is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers and
to reduce its own exposure to fluctuations in interest rates. These financial
instruments include commitments to extend credit. Those instruments involve, to
varying degrees, elements of credit and interest rate risk in excess of the
amount recognized in the Consolidated Statements of Financial Condition. The
contractual amounts of those instruments reflect the extent of involvement the
Company has in particular classes of financial instruments.

The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual amount of those instruments. The Company uses the
same credit policies in making commitments as it does for on-balance-sheet
instruments.

Commitments to extend credit are agreements to lend funds to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates. The Company evaluates each
customer's creditworthiness and related collateral on a case-by-case basis.

                                      F-27
<PAGE>

The Company's exposure to market loss in the event of future changes in market
prices rendering these financial instruments less valuable is represented by the
contractual amount of the instruments.

The Company's exposure to accounting loss on these financial instruments is a
combination of the credit and market risk described above.

The Company does not require collateral or other security to support financial
instruments with credit risk.

The Company is not committed to lend additional funds to debtors whose loans
have been modified.

At December 31, 1999, the Company had approximate outstanding commitments to
originate loans of $3,172,000. Fixed rate loan commitments were $383,000 in
first mortgage loans committed at interest rates ranging from 8.0% to 8.5%.
Variable-rate loan commitments were $412,000 in first mortgage loans with
interest rates ranging from 7.0% to 8.5%. Unfunded portions of construction
loans were $2,377,000 with interest rates ranging from 8.0% to 8.5%.

Other commitments, as of December 31, 1999, are summarized as follows:

          Home equity lines of credit              $  437,100
          Overdraft lines of credit                   155,543
          Commercial lines of credit                  593,657
                                                   ----------
                                                   $1,186,300
                                                   ==========

Fair value estimates, methods and assumptions for the Company's financial
instruments are set forth below, as of December 31:

<TABLE>
<CAPTION>
                                                                              (Dollars in thousands)
                                                                       1998                           1999
                                                           ------------------------------ ---------------------------
                                                              Carrying         Fair          Carrying         Fair
                FINANCIAL ASSETS                               Amount         Value           Amount         Value
                                                           ------------   ------------    ------------  -------------
     <S>                                                   <C>            <C>             <C>           <C>
     Cash and due from depository institutions              $    9,814     $    9,814      $   10,720    $    10,720
     Mutual funds                                                5,310          5,310               -              -
     Investment securities                                       3,869          3,869           5,619          5,619
     Mortgage-backed securities                                  8,536          8,536           6,768          6,768
     Stock in FHLB                                                 663            663             663            663
     Loans held-for-sale, net                                    1,767          1,767               -              -
     Loans receivable, net                                      61,700         62,959          64,263         64,089
     Accrued interest receivable                                   561            561             575            575

              FINANCIAL LIABILITIES

     Transaction accounts                                   $   18,038     $   18,038      $   18,204    $    18,204
     Certificates of deposit                                    54,651         55,124          50,703         50,611
     Borrowed funds                                                571            571             794            794
     Advances from borrowers for taxes and insurance                34             34              41             41
     All other liabilities                                         365            365             437            437
</TABLE>

Cash and due from depository institutions: The carrying amounts of cash and due
from depository institutions approximate their fair value.

                                      F-28
<PAGE>

Mutual funds, investment securities, and mortgage-backed securities: Fair value
is determined by reference to quoted market prices.

Stock in FHLB: This stock is a restricted asset and its carrying value is a
reasonable estimate of fair value.

Loans held-for-sale: The carrying value is a reasonable estimate of fair value.

Loans receivable: The fair value of first mortgage loans is estimated by using
discounted cash flow analyses, using interest rates currently offered for loans
with similar terms to borrowers of similar credit quality. The majority of real
estate loans are residential. First mortgage loans are segregated by fixed and
adjustable interest terms. The fair value of commercial and consumer loans is
calculated by using the discounted cash flow based upon the current market for
like instruments. Fair values for impaired loans are estimated using discounted
cash flow analyses.

Accrued interest receivable: The carrying value approximates fair value.

Transaction deposits: Transaction deposits, payable on demand or with maturities
of 90 days or less, have a fair value equal to book value.

Certificates of deposit: The 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 maturities.

Advances from borrowers for taxes and insurance: The book value approximates
fair value.

All other liabilities: The book value approximates fair value.

Off-Balance Sheet Instruments: The fair value of a loan commitment and a letter
of credit is determined based on the fees currently charged to enter into
similar agreements, taking into account the remaining terms of the agreement and
the present creditworthiness of the counterparties. Neither the fees earned
during the year on these instruments nor their value at year-end are significant
to the Company's consolidated financial position.

Limitations: Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument. The
valuation techniques employed above involve uncertainties and are affected by
assumptions used and judgements regarding prepayments, credit risk, discount
rates, cash flows and other factors. Changes in assumptions could significantly
affect the reported fair value.

In addition, the fair value estimates are based on existing on and off-balance
sheet financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities that are not
considered financial instruments. For example, the Company has a mortgage
servicing portfolio that contributes net fee income annually. The mortgage
servicing portfolio is not considered a financial instrument and its value has
not been incorporated into the fair value estimates. Also, the fair value
estimates do not include the benefit that results from the low-cost funding
provided by the deposit liabilities compared to the cost of borrowing funds in
the market.

                                      F-29
<PAGE>

19.  PARENT COMPANY FINANCIAL INFORMATION

The following tables present condensed financial information of the parent
company, CNS Bancorp, Inc.

Condensed Statements of Financial Condition
December 31, 1998 and 1999

<TABLE>
<CAPTION>
                                                                                         (Dollars in thousands)
                                                                                        1998             1999
                                                                                   -----------      -------------
     <S>                                                                           <C>              <C>
                       ASSETS

     Cash and due from depository institutions                                     $       495        $       760
     Securities available-for-sale                                                           -              1,150
     Investment in subsidiary                                                           19,026             17,734
     Other assets                                                                        2,220              1,942
                                                                                   -----------        -----------
     Total assets                                                                  $    21,741        $    21,586
                                                                                   ===========        ===========
            LIABILITIES AND STOCKHOLDERS' EQUITY

     Accrued liabilities                                                           $         -                  -
     Stockholders' equity                                                               21,741             21,586
                                                                                   -----------        -----------
     Total liabilities and stockholders' equity                                    $    21,741        $    21,586
                                                                                   ===========        ===========
</TABLE>


Condensed Statements of Income
For the years ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
                                                                                      (Dollars in thousands)
                                                                                    1997          1998         1999
                                                                                ----------    -----------  ------------
     <S>                                                                        <C>           <C>             <C>
     Income
     Interest from securities available-for-sale                                $     156     $      113      $      45
     Other interest                                                                   197            103             87
     Other non-interest income                                                          5              3             11
                                                                                ---------     ----------      ---------
                                                                                      358            219            143
     Expenses                                                                         258            379            537
                                                                                ---------     ----------      ---------
     Income (loss) before income taxes and equity in undistributed
       earnings of subsidiary                                                         100           (160)          (394)
     (Provision) benefit for income taxes                                             (40)            64            149
     Equity in undistributed earnings of subsidiary                                   804            958            308
                                                                                ---------     ----------      ---------
     Net income                                                                 $     864     $      862      $      63
                                                                                =========     ==========      =========
</TABLE>

                                      F-30
<PAGE>

Condensed Statements of Cash Flows
For the years ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
                                                                                        (Dollars in thousands)
                                                                                    1997           1998          1999
                                                                                  --------       --------      --------
  <S>                                                                             <C>            <C>           <C>
  Cash Flows From Operating Activities
     Net income                                                                   $    864       $    862      $     63
     Adjustments to reconcile net income to net cash provided
     (used) by operating activities:
       Equity in undistributed earnings of subsidiary                                 (804)          (957)         (308)
       Accretion of discounts on securities available-for-sale                          (8)             -             -
       Compensation expense - MRDP                                                     103            207           235
       Change in other assets                                                       (1,116)            87           161
       Change in accrued liabilities                                                   (89)            (7)            -
       Change in due to subsidiary                                                  (1,368)             -             -
                                                                                  --------       --------      --------
          Net cash provided (used) by operating activities                          (2,418)           192           151
                                                                                  --------       --------      --------
 Cash Flows From Investing Activities
     Dividends received from subsidiary                                                  -            800         2,000
     Purchases of securities available-for-sale                                          -              -        (1,150)
     Maturities of securities available-for-sale                                     2,900          1,201             -
                                                                                  --------       --------      --------
          Net cash provided by investing activities                                  2,900          2,001           850
                                                                                  --------       --------      --------
 Cash Flows From Financing Activities
     Payment received on loan to ESOP (other asset)                                    117            100           109
     Funding provided to MRDP trust                                                 (1,200)             -             -
     Purchase of treasury stock                                                          -         (3,182)         (403)
     Dividends paid                                                                   (364)          (400)         (442)
                                                                                  --------       --------      --------
          Net cash (used) by financing activities                                   (1,447)        (3,482)         (736)
                                                                                  --------       --------      --------
          Net change in cash and cash equivalents                                     (965)        (1,289)          265
     Cash and cash equivalents, beginning of period                                  2,749          1,784           495
                                                                                  --------       --------      --------
     Cash and cash equivalents, end of period                                     $  1,784       $    495      $    760
                                                                                  ========       ========      ========
 Supplemental Disclosure of Non-Cash Transactions:
     Write down of MRDP trust receivable after establishment
      of the MRDP                                                                 $     98       $     18      $      -
                                                                                  ========       ========      ========
</TABLE>

20.  AGREEMENT AND PLAN OF MERGER

The Board of Directors of the Company entered into an agreement and plan of
merger with Exchange National Bancshares, Inc. (ENB) and ENB Holdings, Inc. on
October 27, 1999. The terms of the agreement provide that each share of the
Company's common stock issued and outstanding at the time of the merger shall be
converted to $8.80 in cash and 0.15 of a share of ENB common stock. Management
believes that the effective date of the merger will be approximately June 2000.

The agreement contains various financial and ownership conditions which have to
be maintained by the Company at the effective date of the merger for the
agreement to be binding. Terms of the agreement required the Bank to sell all
mutual fund shares it owned as soon as practicable after the agreement was
signed. Accordingly, such shares were sold during the fourth quarter of 1999
with the Company realizing a loss on the sale of $755,000 (see Notes 2 and 15).
If the Company terminates the agreement to accept a better offer or if,

                                      F-31
<PAGE>

after another party proposes to acquire the Company, the stockholders fail to
approve the agreement and within twelve months the Company enters into a merger
agreement with a third party, the Company will pay a termination fee of
$1,000,000 to ENB. These financial statements include no provision for such
termination fee, nor for any other merger costs to be incurred.


21.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly data for each quarter is presented below for the years ended
December 31, 1998 and 1999.

<TABLE>
<CAPTION>
                                                                  (Dollars in thousands, except per share data)
                                                             March 31,       June 30,      September 30,     December 31,
                                                               1998           1998             1998             1998
                                                            -----------  --------------  ---------------- --------------
<S>                                                         <C>          <C>             <C>              <C>
Total interest income                                       $  1,742        $   1,731       $    1,708       $    1,700
Total interest expense                                           885              917              914              894
                                                            --------        ---------       ----------       ----------
Net interest income                                              857              814              794              806
(Benefit) provision for loan losses                               14                -               38               11
                                                            --------        ---------       ----------       ----------
Net interest income after provision for                          843              814              756              795
  loan losses
Total non-interest income                                        145              141              108              176
Total non-interest expense                                       574              619              561              575
                                                            --------        ---------       ----------       ----------
Income before income taxes                                       414              336              303              396
Provision for income taxes                                       165              133              123              166
                                                            --------        ---------       ----------       ----------
Net income                                                  $    249        $     203       $      180       $      230
                                                            ========        =========       ==========       ==========
Earnings per share                                          $   0.16        $    0.13       $     0.12       $     0.17
                                                            ========        =========       ==========       ==========
Diluted earnings per share                                  $   0.15        $    0.12       $     0.11       $     0.16
                                                            ========        =========       ==========       ==========

                                                            March 31,        June 30,      September 30,    December 31,
                                                              1998             1998            1998             1998
                                                            -----------   ------------   ---------------  -------------
<S>                                                         <C>           <C>            <C>              <C>
Total interest income                                       $  1,622         $  1,591         $  1,549         $  1,591
Total interest expense                                           840              813              791              788
                                                            --------      -----------         --------         --------
Net interest income                                              782              778              758              803
(Benefit) provision for loan losses                              (25)               4               (4)              81
                                                            --------       ----------         --------         --------
Net interest income after provision for                          807              774              762              722
  loan losses
Total non-interest income (loss)                                 125               73               48             (731)
Total non-interest expense                                       582              612              609              703
                                                            --------         --------         --------         --------
Income (loss) before income taxes                                350              235              201             (712)
Provision (benefit) for income taxes                             140               94               80             (303)
                                                            --------         --------         --------         --------
Net income (loss)                                           $    210         $    141         $    121         $   (409)
                                                            ========         ========         ========         ========
Earnings (loss) per share                                   $   0.16         $   0.11         $   0.09         $  (0.31)
                                                            ========         ========         ========         ========
Diluted earnings (loss) per share                           $   0.15         $   0.10         $   0.09         $  (0.31)
                                                            ========         ========         ========         ========
</TABLE>

                                      F-32