<PAGE>   1







                                February 24, 1999






Dear Stockholder:

         You are cordially invited to attend the Annual Meeting of Stockholders
of Chester Bancorp, Inc. to be held at the American Legion Hall located at 500
E. Opdyke St., Chester, Illinois, on Friday, April 2, 1999, at 10:00 a.m., local
time.

         The Notice of the Annual Meeting of Stockholders and Proxy Statement
appearing on the following pages describe the formal business to be transacted
at the meeting. During the meeting, we will also report on the operations of the
Corporation.

         IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING,
WHETHER OR NOT YOU ATTEND THE MEETING IN PERSON AND REGARDLESS OF THE NUMBER OF
SHARES YOU OWN. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE URGE YOU TO
COMPLETE AND MAIL THE ENCLOSED PROXY CARD. IF YOU ATTEND THE MEETING, YOU MAY
VOTE IN PERSON EVEN IF YOU HAVE PREVIOUSLY MAILED A PROXY CARD.

         We look forward to seeing you at the meeting.

                                   Sincerely,

                                        
                                   /s/ Michael W. Welge

                                   Michael W. Welge
                                   Chairman of the Board, President and 
                                   Chief Financial Officer


<PAGE>   2



                              CHESTER BANCORP, INC.
                                1112 STATE STREET
                             CHESTER, ILLINOIS 62233
                                 (618) 826-5038


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON APRIL 2, 1999


         NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Chester Bancorp, Inc. ("Corporation") will be held at the American Legion Hall
located at 500 E. Opdyke St., Chester, Illinois, on Friday, April 2, 1999, at
10:00 a.m., local time, for the following purposes:

         (1)      To elect two directors to serve for three year terms; and

         (2)      To consider and act upon such other matters as may properly
                  come before the meeting or any adjournments thereof.

         NOTE: The Board of Directors is not aware of any other business to
               come before the meeting.

         Any action may be taken on the foregoing proposals at the meeting on
the date specified above or on any date or dates to which, by original or later
adjournment, the meeting may be adjourned. Stockholders of record at the close
of business on February 17, 1999 are entitled to notice of and to vote at the
meeting and any adjournments or postponements thereof.

         You are requested to complete and sign the enclosed form of proxy,
which is solicited by the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend the meeting and vote
in person.

                                           BY ORDER OF THE BOARD OF DIRECTORS



                                           EDWARD K. COLLINS
                                           SECRETARY


Chester, Illinois
February 24, 1999


IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.



<PAGE>   3



                                           
                                 PROXY STATEMENT
                                       OF
                              CHESTER BANCORP, INC.
                                1112 STATE STREET
                             CHESTER, ILLINOIS 62233


                         ANNUAL MEETING OF STOCKHOLDERS
                                  APRIL 2, 1999


         This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Chester Bancorp, Inc. ("Corporation"),
the holding company for Chester National Bank and Chester National Bank of
Missouri (together the "Banks"), to be used at the Annual Meeting of
Stockholders of the Corporation ("Annual Meeting"). The Annual Meeting will be
held at the American Legion Hall located at 500 E. Opdyke St., Chester, Illinois
on Friday, April 2, 1999, at 10:00 a.m., local time. This Proxy Statement and
the enclosed proxy card are being mailed to stockholders on or about February
24, 1999.



                           VOTING AND PROXY PROCEDURE

         Stockholders of record as of the close of business on February 17, 1999
are entitled to one vote for each share of common stock ("Common Stock") of the
Corporation then held. As of February 17, 1999, the Corporation had 1,458,488
shares of Common Stock issued and outstanding. The presence, in person or by
proxy, of at least a majority of the total number of outstanding shares of
Common Stock entitled to vote is necessary to constitute a quorum at the Annual
Meeting. Abstentions will be counted as shares present and entitled to vote at
the Annual Meeting for purposes of determining the existence of a quorum. Broker
non-votes will not be considered shares present and will not be included in
determining whether a quorum is present.

         The Board of Directors solicits proxies so that each stockholder has
the opportunity to vote on the proposals to be considered at the Annual Meeting.
When a proxy card is returned properly signed and dated, the shares represented
thereby will be voted in accordance with the instructions on the proxy card.
Where no instructions are indicated, proxies will be voted FOR the nominees for
directors set forth below. If a stockholder attends the Annual Meeting, he or
she may vote by ballot. If a stockholder does not return a signed proxy card or
does not attend the Annual Meeting and vote in person, his or her shares will
not be voted.

         Stockholders who execute proxies retain the right to revoke them at any
time. Proxies may be revoked by written notice delivered in person or mailed to
the Secretary of the Corporation or by filing a later proxy prior to a vote
being taken on a particular proposal at the Annual Meeting. Attendance at the
Annual Meeting will not automatically revoke a proxy, but a stockholder in
attendance may request a ballot and vote in person, thereby revoking a prior
granted proxy.

         The two directors to be elected at the Annual Meeting will be elected
by a plurality of the votes cast by stockholders present in person or by proxy
and entitled to vote. Stockholders are not permitted to cumulate their votes for
the election of directors. With respect to the election of directors, votes may
be cast for or withheld from each nominee. Votes that are withheld and broker
non-votes will have no effect on the outcome of the election because directors
will be elected by a plurality of votes cast.


<PAGE>   4



         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Persons and groups who beneficially own in excess of 5% of the
Corporation's Common Stock are required to file certain reports disclosing such
ownership pursuant to the Securities Exchange Act of 1934, as amended ("Exchange
Act"). Based on such reports, the following table sets forth, as of February 1,
1999, certain information as to those persons who were beneficial owners of more
than 5% of the outstanding shares of Common Stock. Management knows of no
persons other than those set forth below who beneficially owned more than 5% of
the outstanding shares of Common Stock at February 1, 1999. The following table
also sets forth, as of February 1, 1999, information as to the shares of Common
Stock beneficially owned by each director, by the named executive officers of
the Corporation, and by all executive officers and directors of the Corporation
as a group.

<TABLE>
<CAPTION>
                                               Number of Shares                          Percent of Shares
Name                                         Beneficially Owned (1)(2)                       Outstanding
----                                         ------------------                          ----------------- 
DIRECTORS AND BENEFICIAL
OWNERS OF MORE THAN 5%

<S>                                                 <C>                                      <C>    
Chester National Bank Employee Stock
     Ownership Plan and Trust
     1112 State Street
     Chester, Illinois 62233                         173,770(3)                               11.91%

Gilster-Mary Lee Corporation
     Employee Profit Sharing Plan                    115,800                                   7.81%
     1037 State Street
     Chester, Illinois 62233

Michael W. Welge                                     235,179 (3)(4)                           16.03%
Allen R. Verseman                                     54,031(5)                                3.70%
John R. Beck, M.D.                                    53,054                                   3.63%
James C. McDonald                                     23,030                                   1.58%
Thomas E. Welch, Jr.                                  18,984(3)                                1.30%
Carl H. Welge                                         15,554                                   1.06%

NAMED EXECUTIVE OFFICERS(6)

Edward K. Collins                                     29,421 (3)                               2.00%
All Executive Officers and
Directors as a Group (7 persons)                     429,253                                  29.30%
</TABLE>

---------------
(1)  In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
     be the beneficial owner, for purposes of this table, of any shares of
     Common Stock if he or she has voting or investment power with respect to
     such security. The table includes shares owned by spouses, other immediate
     family members in trust, shares held in retirement accounts or funds for
     the benefit of the named individuals, and other forms of ownership, over
     which shares the persons named in the table may possess voting and/or
     investment power.
(2)  Includes the following shares which such persons have within 60 days after
     February 1, 1999, the right to acquire upon exercise of employee stock
     options or director non-qualified stock options: 8,728 shares for each of
     Mr. M. Welge and Mr. Collins; 2,182 shares for each of Mr. Beck, Mr.
     Verseman, Mr. McDonald, Mr.
     Welch and Mr. C. Welge.
(3)  Shares held in accounts under the Corporation's ESOP, as to which the
     holders have voting power but not investment power, are included as
     follows: Mr. Collins, 1,447 shares, Mr. Welch, 1,104 shares and Mr. M.
     Welge, 687 shares.
(4)  Includes 75,664 shares over which Mr. M. Welge has sole voting and
     investment power, 150,100 shares over which Mr. M. Welge has shared
     investment and voting power, options to acquire 8,728 shares and 687 shares
     held in the ESOP.
(5)  Includes 50,349 shares over which Mr. Verseman has sole voting and
     investment power and 1,500 shares over which Mr. Verseman has shared
     investment and voting power.
 (6) Under SEC regulations, the term "named executive officer" is defined to
     include the chief executive officer, regardless of compensation level, and
     the four most highly compensated executive officers, other than the chief
     executive officer, whose total annual salary and bonus for the last
     completed fiscal year exceeded $100,000. Edward K. Collins was the
     Corporation's only "named executive officer" for the fiscal year ended
     December 31, 1998. He is also a director of the Corporation.


                                       2
<PAGE>   5




                       PROPOSAL I -- ELECTION OF DIRECTORS

         The Corporation's Board of Directors consists of seven members and is
divided into three classes with three-year staggered terms, with approximately
one-third of the directors elected each year. Two directors will be elected at
the Annual Meeting to serve for a three year period, or until their respective
successors have been elected and qualified. The nominees for election this year
are Michael W. Welge and Edward K. Collins. The nominees are current members of
the Boards of Directors of the Corporation and the Banks.

         It is intended that the proxies solicited by the Board of Directors
will be voted for the election of the above named nominees. If any nominee is
unable to serve, the shares represented by all valid proxies will be voted for
the election of such substitute as the Board of Directors may recommend or the
Board of Directors may adopt a resolution to amend the Bylaws and reduce the
size of the Board. At this time the Board of Directors knows of no reason why
any nominee might be unavailable to serve.

         THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MESSRS. 
         WELGE AND COLLINS.

         The following table sets forth certain information regarding the
nominees for election at the Annual Meeting, as well as information regarding
those directors continuing in office after the Annual Meeting.

<TABLE>
<CAPTION>
                                                              Year First
                                                               Elected                       Term to
    Name                            Age(1)                    Director(2)                    Expire(3)
    ----                            ---                       --------                       ------ 

                                                           BOARD NOMINEES

<S>                                   <C>                       <C>                            <C> 
Michael W. Welge(4)                   58                        1980                           2002
Edward K. Collins                     54                        1996                           2002


                                                   DIRECTORS CONTINUING IN OFFICE


Carl H. Welge(4)                      55                        1980                           2001
Allen R. Verseman                     64                        1992                           2001
Thomas E. Welch, Jr.                  59                        1990                           2000
John R. Beck, M.D.                    64                        1989                           2000
James C. McDonald                     69                        1990                           2000

</TABLE>

_________________
(1) As of December 31, 1998.
(2) Includes prior service on the Board of Directors of Chester Savings Bank.
(3) Assuming the individual is re-elected. (4) Michael W. Welge and Carl H.
    Welge are second cousins.

         The present principal occupation and other business experience during
the last five years of each nominee for election and each director continuing in
office is set forth below:

         Michael W. Welge is Chairman of the Board of Directors, President and
Chief Financial Officer. He has responsibility for various management functions,
including financial management and investment portfolio management,
determination of all employee compensation and employment decisions. Mr. Welge
has been employed for the past 37 years at Gilster-Mary Lee Corporation where he
currently serves as its Executive Vice President, Secretary and Treasurer. He
has been active in civic affairs and is a past President of both the Chester
Chamber of 




                                       3
<PAGE>   6

Commerce and the Chester School Board. For the past 18 years Mr. Welge has
served as an Alderman of the City Council of Chester. Mr. Welge has also been
the President and a director of several local corporations and clubs.

         Edward K. Collins is Treasurer and Secretary of the Corporation and has
been Executive Vice President and Chief Executive Officer of Chester National
Bank since January 1995. He is responsible for Chester National Bank's
supervisions and performance of operations and lending. Prior to his employment
at Chester National Bank, Mr. Collins was Executive Vice President and Senior
Loan Officer of Union Bank of Illinois from August 1991 to December 1994 and was
President, Chief Executive Officer and a Director of First National Bank &
Trust, Syracuse, Nebraska, from August 1988 to August 1991. Mr. Collins is a
member of the Board of Directors of the Chester Chamber of Commerce.

         Carl H. Welge has been employed for nine years at Gilster-Mary Lee
Corporation and currently serves as Accounts Receivable Supervisor. He is a
member of the Memorial Hospital Board of Directors and a member of the Friends
of Chester Public Library.

         John R. Beck, M.D. is a self-employed physician. He is a member of the
Hospital staff of Memorial Hospital, Chester, Illinois, and a director of Home
Health Care.

         James C. McDonald has been employed for 46 years at the U.S. Postal
Service. He is a Trustee of the Presbyterian Church, Sparta, Illinois, and is a
member of the Sparta Building Commission and the Sparta Senior Citizen Board.

         Thomas E. Welch, Jr. has been employed as an officer of Chester
National Bank since 1990 when Heritage Federal was acquired by Chester National
Bank. Mr. Welch is the Senior Vice President and Compliance Officer for Chester
National Bank and manages the Sparta branch.

         Allen R. Verseman has been employed for 30 years at Gilster-Mary Lee
Corporation and currently serves as Plant Superintendent.


                MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

         The Boards of Directors of the Corporation and the Banks conduct their
business through meetings of the Boards and through their committees. During the
fiscal year ended December 31, 1998, the Board of Directors of the Corporation
held 12 meetings, the Board of Directors of Chester National Bank held 12
meetings, and the Board of Directors of Chester National Bank of Missouri held
12 meetings. No director of the Corporation or the Banks attended fewer than 75%
of the total meetings of the Boards and committees on which such person served
during this period.

         Each year an Audit Committee is appointed, and consists of the entire
Board of Directors with the exception of those Directors that are employees of
the Banks. The purpose of this Committee is to review financial data of the
Banks and retain the Banks' independent auditor. During the fiscal year ended
December 31, 1998, the Audit Committee met 12 times.

         The Executive Committee consists of Directors M. Welge, and Collins,
the Secretary and two rotating Directors. The Executive Committee meets weekly,
and the committee has full authority of the Board of Directors in order to
conduct business in a timely manner. The Executive Committee also functions as
the Banks' Loan Committee and Asset Liability Committee. All actions of the
Executive Committee are subsequently ratified by the full Board of Directors.
The Executive Committee met 52 times during the fiscal year ended December 31,
1998.

         The Board of Directors of the Corporation acts as a nominating
committee for selecting the nominees for election as directors. During the
fiscal year ended December 31, 1998, the Board of Directors met once in its
capacity as nominating committee to select nominees for election at the Annual
Meeting.




                                       4
<PAGE>   7

                             DIRECTORS' COMPENSATION

DIRECTORS' COMPENSATION

         BOARD AND COMMITTEE FEES. Directors received a fee of $750 per month
during the year ended December 31, 1998, with no additional fees paid for
committee meetings, except for the rotating Directors who serve on the Executive
Committee who receive $50 per meeting attended. Director's fees totaled $66,600
for the year ended December 31, 1998.


                             EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                           Annual Compensation
                                                       ---------------------------------------------------------
Name and                                                                                         Other Annual
Position                                               Year     Salary($)     Bonus($)        Compensation($)(1)
                                                       ----     ---------     --------        ---------------

<S>                                                    <C>      <C>              <C>           <C>   
Edward K. Collins                                      1998     $ 80,000          --             $ --
Treasurer and Secretary of the Corporation             1997     $ 80,000          --             $ --
and Executive Vice President, Chief Executive          1996     $ 80,000
Officer and Director of Chester National Bank
</TABLE>

____________________
(1)   Does not include perquisites which, in the aggregate, did not exceed the
      lesser of $50,000 or 10% of salary and bonus.

EMPLOYMENT AGREEMENTS

         Effective October 4, 1996, the Corporation and the Banks entered into a
three-year employment agreement with Mr. Collins. Under the agreement, the
initial salary level for Mr. Collins is $80,000, which amount will be paid by
Chester National 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 current term of the agreement has been extended to
January 1, 2002. The agreement is terminable by the Employers 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 Employers. 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. Collins is assigned
duties inconsistent with his position, duties, responsibilities and status
immediately prior to such change in control. The term "change in control" is
defined in the agreement as having occurred when, among other things, (a) a
person other than the Corporation purchases shares of Common Stock pursuant to a
tender or exchange offer for such shares, (b) any person (as such term is used
in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the beneficial
owner, directly or indirectly, of securities of the Corporation representing 25%
or more of the combined voting power of the Corporation's then outstanding
securities, (c) the membership of the Board of Directors changes as the result
of a contested election, or (d) stockholders of the Corporation approve a
merger, consolidation, sale or disposition of all or substantially all of the
Corporation's assets, or a plan of partial or complete liquidation.

         The severance payments from the Employers will equal 2.99 times Mr.
Collins' average annual compensation during the five-year period preceding the
change in control. Such amount will be paid in a lump sum within 10 business
days following the termination of employment. Assuming that a change in control
had occurred at December 31, 1998, Mr. Collins would be entitled to severance
payments of $237,750. Section 280G of the Internal Revenue 





                                       5
<PAGE>   8

Code of 1986, as amended ("Code"), states that severance payments that 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 of such excess payments, and the Employers would not be entitled
to deduct the amount of such excess payments.

         The agreement restricts Mr. Collins' right to compete against the
Employers for a period of one year from the date of termination of the agreement
if he voluntarily terminates his employment, except in the event of a change in
control. The Board of Directors of the Corporation or the Banks may, from time
to time, also extend employment agreements to other senior executive officers.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The entire Board of Directors of the Corporation acts as the
Compensation Committee (the "Committee"). The Committee determines the
compensation for Mr. Collins and the other executive officers of the
Corporation. The Committee met once in 1998.

         Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1933, as amended, or
the Exchange Act that might incorporate future filings, including this Proxy
Statement, in whole or in part, the following Report of the Compensation
Committee and Performance Graph shall not be incorporated by reference into any
such filings.

REPORT OF THE COMPENSATION COMMITTEE

         Under the rules established by the SEC, the Corporation is required to
provide certain data and information in regard to the compensation and benefits
provided to the Corporation's Chief Executive Officer and other executives
officers of the Corporation. The disclosure requirements for the Chief Executive
Officer and other executive officers include the use of tables and a report
explaining the rationale and considerations that led to the fundamental
executive compensation decisions affecting those individuals. Insofar as no
separate compensation is currently payable by the Corporation, the Committee,
acting on behalf of Chester National Bank, has prepared the following report for
inclusion in this proxy statement.

         The Committee's duties are to administer policies that govern executive
compensation for the Corporation. The Committee evaluates executive
performances, compensation policies and salaries and makes determinations
concerning the compensation of each named executive officer and other executive
officers. The Committee establishes the compensation levels for the coming year.
The executive compensation policy of the Corporation is designed to establish an
appropriate relationship between executive pay and the Corporation's annual and
long-term performance, long-term growth objectives, and the Corporation's
ability to attract and retain qualified executive officers. The principles
underlying the program are: (i) to attract and retain key executives who are
vital to the long-term success of the Corporation and are of the highest
caliber; (ii) to provide levels of compensation competitive with those offered
throughout the financial industry, and (iii) to motivate executives to enhance
long-term stockholder value by building their ownership in the Corporation. The
Committee also considers a variety of subjective and objective factors in
determining the compensation package for individual executives including: (i)
the performance of the Corporation with emphasis on annual and long-term
performance, (ii) the responsibilities assigned to each executive, and (iii) the
performance by each executive of assigned responsibilities as measured by the
progress of the Corporation during the year. Although the Committee did not
establish executive compensation levels on the basis of whether specific
financial goals had been achieved by the Corporation, the Committee considered
the overall profitability of the Corporation when making their decisions. The
Committee believes that management compensation levels, as a whole,
appropriately reflect the application of the Corporation's executive
compensation policy and the progress of the Corporation. During the year ended
December 31, 1997, the base compensation for Edward K. Collins was $80,000,
which did not represent an increase from the previous year.








                                       6
<PAGE>   9



                              CHESTER BANCORP, INC.

                        [TOTAL RETURN PERFORMANCE GRAPH]

<TABLE>
<CAPTION>

                                            PERIOD ENDING
                       --------------------------------------------------------  
INDEX                  10/8/96  12/31/96   6/30/97  12/31/97  6/30/98  12/31/98
-------------------------------------------------------------------------------
<S>                   <C>       <C>       <C>       <C>       <C>       <C>         
Chester Bancorp, Inc.  100.00    101.82    116.35    140.88    136.54    134.66
S&P 500                100.00    106.15    128.02    141.57    166.65    182.03  
SNL Bank Index         100.00    110.88    133.59    168.03    187.15    181.76
</TABLE>








SNL Securities LC
Charlottesville, VA                                              (804)977-1600
<PAGE>   10


PERFORMANCE GRAPH

         Set forth hereunder is a performance graph comparing (a) the total
return of the Corporation's common stock for the period beginning October 4,
1996 (the date on which the Corporation's common stock commenced trading on the
Nasdaq National Market) through December 31, 1998, (b) the cumulative total
return on stocks included in the S&P 500 Index over such period, and (c) the
cumulative total return on stock included in the SNL Bank Index over such
period. The cumulative total return on the Corporation's common stock was
computed assuming the reinvestment of cash dividends.















                                       7

<PAGE>   11



                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         Section 16(a) of the Exchange Act requires the Corporation's executive
officers and directors, and persons who own more than 10% of any registered
class of the Corporation's equity securities, to file reports of ownership and
changes in ownership with the SEC. Executive officers, directors and greater
than 10% stockholders are required by regulation to furnish the Corporation with
copies of all Section 16(a) forms they file.

         Based solely on its review of the copies of such forms it has received
and written representations provided to the Corporation by the above referenced
persons, the Corporation believes that, during the 1997 fiscal year, all filing
requirements applicable to its reporting officers, directors and greater than
10% stockholders were properly and timely complied with.



                          TRANSACTIONS WITH MANAGEMENT

         Current law requires that all loans or extensions of credit to
executive officers and directors must be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and does not involve more than the
normal risk of repayment or present other unfavorable features. The Banks are
prohibited from making any new loans or extensions of credit to the Banks'
executive officers and directors at different rates or terms than those offered
to the general public, and has adopted a policy to this effect. The aggregate
amount of loans by the Banks to its executive officers and directors was
$205,832 at December 31, 1998.



                                    AUDITORS

         The Board of Directors has appointed KPMG Peat Marwick LLP, independent
public accountants, to serve as the Corporation's auditors for the fiscal year
ending December 31, 1999. A representative of KPMG Peat Marwick LLP is expected
to be present at the Annual Meeting to respond to appropriate questions from
stockholders and will have the opportunity to make a statement if he or she so
desires.




                                  OTHER MATTERS


         The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Annual Meeting, it
is intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.



                                  MISCELLANEOUS

         The cost of solicitation of proxies will be borne by the Corporation.
The Corporation will reimburse brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of the Common Stock. In addition to
solicitations by mail, directors, officers and regular employees of the
Corporation may solicit proxies personally or by telecopier or telephone without
additional compensation.

         The Corporation's 1998 Annual Report to Stockholders, including
consolidated financial statements, has been mailed to all stockholders of record
as of the close of business on February 17, 1999. Any stockholder who has not





                                       8
<PAGE>   12

received a copy of the Annual Report may obtain a copy by writing to the
Corporation. The Annual Report is not to be treated as part of the proxy
solicitation material or having been incorporated herein by reference.

         A COPY OF THE CORPORATION'S FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1998, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS OF RECORD AS OF FEBRUARY 17, 1999, UPON WRITTEN REQUEST TO MICHAEL
W. WELGE, PRESIDENT, CHESTER BANCORP, INC., 1112 STATE STREET, CHESTER, ILLINOIS
62233.



                              STOCKHOLDER PROPOSALS

         Proposals of stockholders intended to be presented at the Corporation's
annual meeting to be held in April 2000 must be received by the Corporation no
later than October 21, 1999 to be considered for inclusion in the proxy
solicitation materials and form of proxy relating to such meeting. Any such
proposals shall be subject to the requirements of the proxy solicitation rules
adopted under the Exchange Act.

                                    BY ORDER OF THE BOARD OF DIRECTORS


                                    EDWARD K. COLLINS
                                    SECRETARY


Chester, Illinois
February 24, 1999





                                       9
<PAGE>   13

                THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

         Should the undersigned be present and elect to vote at the Annual
Meeting or at any adjournment thereof and after notification to the Secretary of
the Corporation at the Annual Meeting of the stockholder's decision to terminate
this proxy, then the power of said attorneys and proxies shall be deemed
terminated and of no further force and effect.

         The undersigned acknowledges receipt from the Corporation prior to the
execution of this proxy of the Notice of Annual Meeting of Stockholders, a Proxy
Statement for the Annual Meeting, dated February 24, 1999 and the Annual Report
to Stockholders.




Dated: _______________, 1999



---------------------------                    ---------------------------
PRINT NAME OF STOCKHOLDER                      PRINT NAME OF STOCKHOLDER


---------------------------                    ---------------------------
SIGNATURE OF STOCKHOLDER                       SIGNATURE OF STOCKHOLDER




Please sign exactly as your name appears on the enclosed card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.






    PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
                           POSTAGE-PREPAID ENVELOPE.

<PAGE>   14

                                 REVOCABLE PROXY
                              CHESTER BANCORP, INC.

                         ANNUAL MEETING OF STOCKHOLDERS
                                  APRIL 2, 1999

         The undersigned hereby appoints the official Proxy Committee of the
Board of Directors of Chester Bancorp, Inc. ("Corporation") with full powers of
substitution to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of the Corporation which the undersigned is entitled to
vote at the Annual Meeting of Stockholders, to be held at the American Legion
Hall, 500 E. Opdyke St., Chester, Illinois, on Friday, April 2, 1999, at 10:00
a.m., local time, and at any and all adjournments thereof, as follows:


                                                                        VOTE
1.       The election as director of the nominees           FOR       WITHHELD
         listed below (except as marked to the             [   ]       [   ]
         contrary below).

         Michael W. Welge
         Edward K. Collins

         INSTRUCTIONS:  TO WITHHOLD YOUR VOTE
         FOR ANY INDIVIDUAL NOMINEE, WRITE THE
         NOMINEE'S NAME(S) ON THE LINE BELOW.

_______________
2.       In their discretion, upon such other matters as may properly come
         before the meeting.


The Board of Directors recommends a vote "FOR" the listed propositions.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED THIS
PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE BOARD OF DIRECTORS IN
ITS BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS PROXY ALSO CONFERS
DISCRETIONARY AUTHORITY ON THE BOARD OF DIRECTORS TO VOTE WITH RESPECT TO THE
ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEES ARE UNABLE TO SERVE OR FOR
GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL
MEETING.