Securities and Exchange Commission
                         Washington, DC  20549


                               FORM 10-Q


[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities 
Exchange Act of 1934

               For the period ended    March 31, 1999     

                                   or 

[  ] Transition Report pursuant to Section 13 or 15(d) of the Securities 
Exchange Act of 1934

         For the transition period from        to        

                    
                  Commission File Number      0-24033


                          NASB Financial, Inc.
           (Exact name of registrant as specified in its charter)

         Missouri                                       43-1805201  
(State or other jurisdiction of                       (IRS Employer
incorporation or organization)                       Identification No.)


           12498 South 71 Highway, Grandview, Missouri  64030
      (Address of principal executive offices)         (Zip Code)


                             (816) 765-2200
           (Registrant's telephone number, including area code)


                                    N/A
(Former name, former address and former fiscal year, if changed since 
last report)


Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange 
Act of 1934 during the preceding 12 months (or for such shorter period 
that the Registrant was required to file such reports), and (2) has been 
subject to such filing requirements for the past 90 days.

                                           Yes  X        No  


The number of shares of Common Stock of the Registrant outstanding as of 
May 7, 1999, was 9,027,624.




<PAGE>

NASB FINANCIAL, INC. AND SUBSIDIARY
Consolidated Balance Sheets 
(In thousands)



                                           March 31,     September 30,
                                              1999            1998	
                                           (Unaudited)
                                           ----------     -----------	
ASSETS
Cash and cash equivalents                  $   3,826      $   3,331 	
Securities available for sale                  5,542          7,209
Stock in Federal Home Loan Bank, at cost       5,961          5,961 	
Mortgage-backed securities:				
  Available for sale                          16,116         17,742
  Held to maturity (market value of $19,988
    and $25,029 at March 31, 1999, and 
    September 30, 1998, respectively)         19,043         23,947
Loans receivable:				
  Held for sale                              108,004        131,845 	
  Held for investment, net                   552,195        526,512 	
Accrued interest receivable                    4,261          4,455 	
Real estate owned, net                         2,845          3,232 	
Premises and equipment, net                    5,038          4,818 	
Mortgage servicing rights, net                 6,543          4,517 	
Other assets                                   2,976          2,485
                                           ----------     ----------	
                                           $ 732,350      $ 736,054 	
                                           ==========     ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Customer deposit accounts                $ 542,544      $ 545,504 	
  Advances from Federal Home Loan Bank       106,110        109,210 	
  Other borrowings                               150            200 	
  Escrows                                      3,161          5,915 	
  Income taxes payable                         2,676          1,606 	
  Accrued expenses and other liabilities       2,320          3,786 	
                                           ----------     ----------	
      Total liabilities                      656,961        666,221 	
                                           ----------     ----------	

Commitments and contingencies

Stockholders' equity:
  Common stock of $0.15 par value: 
    20,000,000 authorized; 9,475,312 issued
    at March 31, 1999, and 9,335,312, 
    issued at September 30, 1998               1,421          1,400 	
  Serial preferred stock of $1.00 par
    value: 7,500,000 shares authorized;
    none outstanding                              --             --  	
  Additional paid-in capital                  13,782         13,196 	
  Retained earnings                           64,668         59,527 	
  Treasury stock, at cost; 431,948 shares 
    at March 31, 1999, and at September 
    30, 1998.                                 (4,070)        (4,070)	
  Unrealized net loss on securities 
    available for sale                          (412)          (220)	
                                           ----------     ----------	
      Total stockholders' equity              75,389         69,833
                                           ----------     ----------	
                                             732,350        736,054 	
                                           ==========     ==========	

See accompanying notes to consolidated financial statements.		


                                    1 

<PAGE>		
NASB FINANCIAL, INC. AND SUBSIDIARY
Consolidated Statements of Income (Unaudited) 
(In thousands, except share data)


<TABLE>
<CAPTION>

                                                Three Months Ended           Six Months Ended
                                                       March 31,                   March 31,
                                               ----------------------      ------------------------
                                                  1999         1998           1999         1998
                                               ---------    ---------      ---------    ----------
<S>                                            <C>          <C>            <C>          <C>
Interest on loans                              $ 14,403       14,407         28,936       28,652
Interest on mortgage-backed securities              586          778          1,067        1,672
Interest and dividends on investments               214          329            448          705
Other interest income                                59          118            282          275
                                               ---------    ---------      ---------    ---------
  Total interest income                          15,262       15,632         30,733       31,304
                                               ---------    ---------      ---------    ---------

Interest on customer deposit accounts             6,345        6,575         13,025       13,385
Interest on advances and notes payable            1,620        2,036          3,299        4,169
                                               ---------    ---------      ---------    ----------
  Total interest expense                          7,965        8,611         16,324       17,554
                                               ---------    ---------      ---------    ----------
    Net interest income                           7,297        7,021         14,409       13,750
Provision for loan losses                            75          308            150          314
                                               ---------    ---------      ---------    ----------
    Net interest margin after provision          
      for loan losses                             7,222        6,713         14,259       13,436
                                               ---------    ---------      ---------    ----------
Other income (expense):                                                         
  Loan servicing fees                               266          160             (8)         333 
  Customer service fees and charges                 386          464            918          908
  Recovery of impairment on mortgage                  
    servicing rights                                207           --            103           --
  Gain on sale of securities held for sale           --          (10)            95          (10)
  Gain on sale of loans held for sale             1,833        1,572          4,072        2,809
  Other                                             485          426            820          905
                                                --------     --------      ----------   ----------
    Total other operating income                  3,177        2,612          6,000        4,945
                                                --------     --------      ----------   ----------
General and administrative expenses:			
  Compensation and fringe benefits                2,784        2,463          5,705        4,929
  Premises and equipment expense                    596          549          1,178        1,120
  Advertising and business promotion                228           86            410          139
  Federal deposit insurance premiums                 84           84            164          165
  Other                                           1,029          937          2,187        1,728
                                                --------     --------      ---------    ---------- 
    Total general and administrative expenses     4,721        4,119          9,644        8,081
                                                --------     --------      ---------    ----------
    Income before income taxes                    5,678        5,206         10,615       10,300
Income tax expense                                2,270        2,004          4,193        3,965
                                                --------     --------      ---------    ----------
    Net income                                  $ 3,408        3,202          6,422        6,335
                                                ========     ========      =========    =========
Basic earnings per share                        $  0.38         0.36           0.71         0.71
                                                ========     ========      =========    =========
Diluted earnings per share                      $  0.37         0.35           0.70         0.69
                                                ========     ========      =========    ========= 
                                                                                              
Weighted average shares outstanding           9,041,853    8,960,484      8,987,963    8,954,032

</TABLE>



See accompanying notes to consolidated financial statements.
	
                                    2
<PAGE>		
			
NASB FINANCIAL, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Unaudited) 
(In thousands, except share data)

<TABLE>
<CAPTION>

                                                Additional                     Unrealized      Total
                                     Common      paid-in   Retained   Treasury   Gains and   stockholders'
                                      stock      capital   earnings     stock    (losses)     equity
                                  -----------------------------------------------------------------------
                                                  (Dollars in thousands, except per share data)
<S>                                <C>          <C>        <C>       <C>         <C>          <C> 
Balance at September 30, 1998       $ 1,400       13,196     59,527     (4,070)     (220)      69,833 
  Change in unrealized gains and 
    (losses), net of income taxes 
     of $128                             --           --         --         --      (192)        (192)
  Cash dividends declared                --           --     (1,281)        --        --       (1,281)
  Stock options exercised                21          586         --         --        --          607 
  Net income for first fiscal quarter    --           --      3,014         --        --        3,014
  Net income for second fiscal quarter   --           --      3,408         --        --        3,408 
                                  -----------------------------------------------------------------------
Balance at March 31, 1999           $ 1,421       13,782     64,668     (4,070)     (412)      75,389 
                                  =======================================================================

</TABLE>				

		

See accompanying notes to consolidated financial statements.



                                    3
<PAGE>
NASB FINANCIAL, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (Unaudited) 
(In thousands, except share data)


<TABLE>
<CAPTION>
                                                                  Three months ended March 31,       Six months ended March 31,
                                                                  ---------------------------       ---------------------------
                                                                       1999           1998               1999           1998
                                                                  ---------------------------       ---------------------------
<S>                                                                  <C>            <C>                <C>            <C>
Cash flows from operating activities:                                                       
  Net income                                                        $  3,408          3,202              6,422          6,335
  Adjustments to reconcile net income to net cash                         
    used in operating activities:                                         
  Depreciation                                                           259            258                503            505
  Amortization and accretion                                             423           (497)               471           (988)
  (Gain) loss on sale of securities available for sale                    --             10                (95)            10
  Recovery of impairment on originated mortgage servicing rights        (207)            --               (103)            --
  Gain on sale of loans held for sale                                 (1,833)        (1,572)            (4,072)        (2,809)
  Provision for loan losses                                               75            308                150            314
  Provision for losses on real estate owned                               --            (72)                --             13
  Origination and purchase of loans held for sale                    (93,273)       (89,779)          (221,744)      (178,892)
  Sale of loans held for sale                                        112,059         78,040            231,635        154,525
Changes in:
  Accrued interest receivable                                           (114)            44                194            169
  Accrued expenses and other liabilities and income taxes payable     (5,829)          (666)              (396)           849
                                                                   --------------------------        --------------------------
    Net cash provided by (used in) operating activities               14,968        (10,724)            12,965        (19,969)
                                                                                      
Cash flows from investing activities:                                               
  Principal repayments of mortgage-backed securities:
    Held to maturity                                                   1,693          1,232              4,117          2,546
    Available for sale                                                 1,072          6,939              2,351          8,906
  Principal repayments of mortgage loans held for investment 
    and held for sale                                                 49,879         50,156            102,318        104,717
  Principal repayments of other loans                                  4,759          3,837             10,157          7,321
  Principal repayments of securities:
    Available for sale                                                    --              2                 30             32
  Loan origination - mortgage loans held for investment              (48,186)       (43,560)           (95,129)       (82,103) 
  Loan origination - other loans                                      (7,546)        (4,001)           (14,370)        (8,168)
  Purchase of mortgage loans held for investment                      (7,762)        (5,126)           (13,142)        (9,566)
  Purchase of investment securities available for sale                    --         (1,245)                --         (1,245) 
  Proceeds from sale of securities available for sale                     --          5,092              1,657          5,092
  Proceeds for sale of real estate owned                                 186          2,827                874          3,515
  Purchases of premises and equipment                                   (371)          (105)              (723)          (263)
  Other                                                                 (978)           697               (464)           456
                                                                   --------------------------        --------------------------
    Net cash provided by (used in) investing activities               (7,254)        16,745             (2,324)        31,240

</TABLE>


                                    4
<PAGE>
NASB FINANCIAL, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued) 
(In thousands, except share data)


<TABLE>
<CAPTION>
                                                                  Three months ended March 31,       Six months ended March 31,
                                                                  ---------------------------       ---------------------------
                                                                       1999           1998               1999           1998
                                                                  ---------------------------       ---------------------------
<S>                                                                  <C>            <C>                <C>            <C>
Cash flows from financing activities:
  Net increase (decrease) in customer deposit accounts                (3,864)         5,241             (2,960)         8,420 
  Proceeds from advances from FHLB                                    14,000          5,000             19,000         14,000
  Repayment on advances from FHLB                                    (22,060)       (10,004)           (22,100)       (24,008)
  Repayment of notes payable                                             (50)        (3,634)               (50)        (3,634)
  Cash dividends paid                                                   (723)          (560)            (1,282)        (1,007)
  Repurchase of common stock                                              --            (24)                --            (66)
  Proceeds from issuance of notes payable                                 --             --                 --          2,154
  Net increase (decrease) in escrows                                   1,925          1,911             (2,754)        (2,733)
                                                                  ---------------------------       ---------------------------
    Net cash used in financing activities                            (10,772)        (2,070)           (10,146)        (6,874)
                                                                  ---------------------------       ---------------------------
    Net increase (decrease) in cash and cash equivalents              (3,058)         3,951                495          4,397
Cash and cash equivalents at beginning of the period                   6,884          3,713              3,331          3,267
                                                                  ---------------------------       ---------------------------
Cash and cash equivalents at end of period                         $   3,826          7,664              3,826          7,664
                                                                  ===========================	     ============================
				
Supplemental disclosure of cash flow information:
  Cash paid for income taxes (net of refunds)                      $   2,993          3,400              2,993          3,365
  Cash paid for interest                                               7,937          8,620             16,393         17,658

Supplemental schedule of non-cash investing and financing
  activities:
    Conversion of loans to real estate owned                       $     536            689                766          1,066
    Conversion of real estate owned to loans                              --             --                 78             --
    Capitalization of originated mortgage servicing rights             1,471          1,551              2,770          2,127
    Capitalization of originated mortgage servicing 
        interest only strips                                             691            456              1,496            799
    Excess servicing reclassified to mortgage-backed securities 
        available for sale (interest only strip securities)               --             --                 --          1,527


</TABLE>




See accompanying notes to consolidated financial statements.

                                    5
<PAGE>


(1) BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements are 
prepared in accordance with generally accepted accounting principles 
("GAAP") for interim financial information.  Accordingly, they do not 
include all of the information and footnotes required by GAAP for 
complete financial statements.  All adjustments are of a normal and 
recurring nature and, in the opinion of management, the statements 
include all adjustments considered necessary for fair presentation.  
Operating results for the three months and six months ended March 31, 
1999, are not necessarily indicative of the results that may be expected 
for the fiscal year ended September 30, 1999.

     In preparing the financial statements, management is required to 
make estimates and assumptions that affect the reported amounts of 
assets and liabilities as of the date of the balance sheet and revenues 
and expenses for the period.  Material estimates that are particularly 
susceptible to significant change in the near-term relate to the 
determination of the allowances for losses on loans and real estate 
owned.  While management believes that these allowances are adequate, 
future additions to the allowances may be necessary based on changes in 
economic conditions.

     Certain quarterly amounts for 1998 have been reclassified to 
conform to the current quarter's presentation.

(2) REORGANIZATION AND MERGER

     On April 1, 1998, NASB Financial, Inc. (the "Company") completed 
a transaction whereby North American Savings Bank, F.S.B. (the "Bank") 
became a wholly-owned subsidiary of the Company, through a merger of the 
Bank with and into NASB Interim Savings Bank, F.S.B., a federally 
chartered stock savings bank formed solely to facilitate this 
transaction.  

     To complete the transaction, the Company issued an aggregate of 
2,375,112 shares of Company common stock by exchanging one share of the 
Company common stock for each share of common stock of the Bank.  It 
also exchanged an option to purchase one share of Company common stock 
for each outstanding option to purchase one share of the Bank's common 
stock.  

     The resulting Bank from the merger continues to operate under the 
name "North American Savings Bank, F.S.B."  The transaction was 
intended to qualify as a tax-deferred reorganization under the Internal 
Revenue Code of 1986, as amended, providing certain tax-deferred 
benefits for income tax purposes for Bank stockholders.  The merger was 
accounted for as a pooling of interests, and accordingly, the 
accompanying financial information has been restated to include the 
accounts of the Bank and the Company for all periods presented.

(3) STOCK SPLIT, CHANGE IN PAR VALUE, AND CHANGE IN NUMBER OF AUTHORIZED 
SHARES

     On January 26, 1999, the stockholders of the Company voted to amend 
the Company's Articles of Incorporation to increase the number of 
authorized Common Stock from 3,000,000 to 20,000,000 shares.  At the 
same time, stockholders also approved a reduction in the par value of 
Common Stock from $1.00 to $0.15.  

     On January 27, 1999, the Board of Directors declared a four-for-one 
stock split.  Each stockholder received three additional shares of the 
Company's stock for each share they owned.  The pay date of the split 
was March 5, 1999.

     All prior period amounts have been adjusted for the effect of the 
stock split, change in par value of Common Stock, and change in number 
of authorized shares of Common Stock.

(4) COMPREHENSIVE INCOME

     For the period ended March 31, 1999, the Company reported net 
income of $6,422,000.  Total comprehensive income, reported pursuant to 
Statement of Financial Accounting Standards ("SFAS") No. 130, 
"Reporting Comprehensive Income," was $6,230,000, which includes the 
change in the accumulated unrealized net loss on available for sale 
securities, net of income taxes of $192,000.

                                    6
<PAGE>


(5) SECURITIES AVAILABLE FOR SALE

     The following table presents a summary of securities available for 
sale. 

                                            March 31, 1999
                             -----------------------------------------	--
                                           Gross     Gross     Estimated  
                             Amortized  unrealized unrealized    market
                               cost        gains     losses      value
                             -------------------------------------------
U.S. Government Obligations $  3,150         --         (8)       3,142
Equity securities              2,738         --       (338)       2,400
                             -------------------------------------------
    Total                   $  5,888         --       (346)       5,542
                             ===========================================


(6) MORTGAGE-BACKED SECURITIES AVAILABLE FOR SALE

     The following table presents a summary of mortgage-backed 
securities available for sale. 

                                          March 31, 1999
                             -----------------------------------------	--
                                           Gross     Gross     Estimated  
                             Amortized  unrealized unrealized    market
                               cost        gains     losses      value
                             -------------------------------------------
Pass-through certificates 
  guaranteed by GNMA - 
  fixed rate                $  5,919         32         --       5,951
FNMA pass-through 
  certificates - fixed rate    5,852          6         (2)      5,856
Mortgage-backed derivatives
  (including CMO residuals 
   and interest-only 
   securities)                 4,679          7       (377)      4,309
                             -------------------------------------------
     Total                  $ 16,450         45       (379)     16,116
                             ===========================================


(7) MORTGAGE-BACKED SECURITIES HELD TO MATURITY

     The following table presents a summary of mortgage-backed 
securities held to maturity.


                                          March 31, 1999
                             -----------------------------------------	--
                                           Gross     Gross     Estimated  
                             Amortized  unrealized unrealized    market
                               cost        gains     losses      value
                             -------------------------------------------
FHLMC participation 
  certificates:					
    Fixed rate            $  3,155          92          2       3,245
    Balloon maturity 
      and adjustable rate    6,152          68         --       6,220
FNMA pass-through 
  certificates:					
    Fixed rate                 464          --         --         464
    Balloon maturity 
      and adjustable rate      625          --          1         624
Pass-through certificates 
  guaranteed by GNMA 
    - fixed rate               475          32         --         507
Collateralized mortgage 
  obligation bonds           3,318         289          1       3,606
Other asset-backed 
  Securities                 4,854         996        528       5,322
                             -------------------------------------------
      Total               $ 19,043       1,477        532      19,988
                             ===========================================

                                    7
<PAGE>


(8) LOANS RECEIVABLE

     Loans receivable are as follows:

                                            March 31, 1999
                                        ----------------------
                                        (Dollars in thousands)
LOANS HELD FOR INVESTMENT:		
  Mortgage loans:		
    Permanent loans on:		
      Residential properties               $     313,143
      Business properties                         80,081
      Partially guaranteed by VA or 
        insured by FHA                            29,851
      Construction and development               172,596
                                             -------------
 Total mortgage loans                            595,671
 Commercial loans                                  6,515
 Installment loans to individuals                 32,927
                                             -------------
    Total loans held for investment              635,113
 Less:		
 Undisbursed loan funds                          (70,924)
 Unearned discounts and fees on loans, net        (6,286)
 Allowance for losses on loans                    (5,708)
                                             -------------
 Net loans held for investment              $    552,195
                                             =============



                                            March 31, 1999
                                        ----------------------
                                        (Dollars in thousands)
LOANS HELD FOR SALE:		
  Mortgage loans:		
    Permanent loans on:		
      Residential properties                $    119,585
      Partially insured by FHA                       454
                                             -------------
         Total loans held for sale               120,039
  Less:		
    Undisbursed loan funds                       (12,090)
    Unearned discounts and fees on loans, net         55
                                             -------------
            Net loans held for sale         $    108,004
                                             =============


     Included in the loans receivable balances at March 31, 1999, are 
participating interests in mortgage loans and wholly owned mortgage 
loans serviced by other institutions in the approximate amounts of $5.5 
million.  Loans and participations serviced for others amounted to 
approximately $596.5 million at March 31, 1999.


(9) REAL ESTATE OWNED AND OTHER REPOSSESSED PROPERTY

     Real estate owned and other repossessed property consisted of the 
following:

                                            March 31, 1999
                                        ----------------------
                                        (Dollars in thousands)
Real estate acquired through (or deed 
  in lieu of) foreclosure	                $      4,226
Less: allowance for losses                      (1,381)
                                             -------------
    Total                                   $    2,845
                                             =============


                                    8
<PAGE>

     Real estate owned is carried at fair value as of the date of 
foreclosure minus any estimated disposal costs (the "new basis"), and 
is subsequently carried at the lower of the new basis or fair value less 
selling costs on the current measurement date.

(10) MORTGAGE SERVICING RIGHTS

     On January 1, 1997, the Bank adopted SFAS No. 125, "Accounting for 
Transfers and Servicing of Financial Assets and Extinguishment of 
Liabilities."  SFAS No. 125 is required to be applied to transfers of 
assets occurring after January 1, 1997.  Among other things, this 
Statement establishes a clear distinction between transactions that are 
considered sales of assets and those that are considered financing 
arrangements.  According to the Statement, asset sales must meet 
prescribed tests, which show that financial control of the asset has 
been transferred to the buyer.  If the transaction does not meet these 
prescribed tests, the transaction is recorded as a financing activity, 
and the asset remains on the balance sheet of the seller.  The 
implementation of this part of the Statement had no material impact on 
the Bank.

     The Bank is most affected by the provision of this Statement that 
requires the recognition of all servicing assets at the time that 
mortgage loans are sold with servicing retained.  Prior to this 
Statement, the Bank recognized a gain or loss only for any servicing 
value in excess of stated contractual amounts at the time of loan sale 
("excess servicing").  The excess servicing value was recorded as an 
asset and amortized as an offset to servicing income over the lives of 
the related mortgage loans.

     SFAS No. 125 now requires the Bank to calculate and recognize all 
retained servicing value (including "normal servicing") at the time of 
a loan sale in which servicing is retained.  These amounts for normal 
originated mortgage servicing rights ("OMSRs") are recorded as assets 
and amortized as offsets to future servicing income.  Impairment of 
OMSRs is assessed based on the fair value of the rights on a pool by 
pool basis.  Fair values are estimated using discounted cash flows based 
on a market rate of interest.

     In accordance with the Statement, servicing fees recognized in 
excess of normal servicing fees are carried as interest-only strip 
securities and classified as available for sale in accordance with SFAS 
No. 115, "Accounting for Certain Investments in Debt and Equity 
Securities."  Also, all previous amounts carried as excess servicing 
assets were combined and reclassified as interest-only strip securities.  
At March 31, 1999, the Bank had such interest-only strip securities in 
the amount of $4.1 million, classified as available for sale.

(11) RECONCILIATION OF BASIC EARNINGS PER SHARE TO DILUTED EARNINGS PER 
SHARE

     The following table presents a reconciliation of basic earnings per 
share to diluted earnings per share for the periods indicated. 

                             Three months ended       Six months ended
                             ------------------      ------------------
                             3/31/99    3/31/98      3/31/99    3/31/98
                             ------------------      ------------------
Net income (in thousands)   $ 3,408      3,202        6,422      6,335


Basic weighted average 
   shares                 9,041,853   8,960,484     8,987,963  8,954,032
Effect of stock options     147,466     212,291       174,506    228,219
                          ----------------------    --------------------
Dilutive potential 
  common shares           9,189,319   9,172,775     9,162,469  9,182,251

Net income per share:
  Basic                    $   0.38        0.36          0.71       0.71
  Dilutive                     0.37        0.35          0.70       0.69


     The dilutive securities included for each period presented above 
consist entirely of stock options granted to employees as incentive 
stock options under Section 442A of the Internal Revenue Code as 
amended.

                                    9
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations.


GENERAL

     The principal business of the Company is to provide banking 
services through the Bank.  Specifically, the Bank obtains savings and 
checking deposits from the public, then uses those funds to originate 
and purchase real estate loans and other loans. The Bank also purchases 
mortgage-backed securities ("MBS") and other investment securities 
from time to time as conditions warrant.  In addition to customer 
deposits, the Bank obtains funds from the sale of loans held-for-sale, 
the sale of securities available-for-sale, repayments of existing 
mortgage assets, and advances from the Federal Home Loan Bank 
("FHLB").  The Bank's primary sources of income are interest on loans, 
MBS, and investment securities plus customer service fees and income 
from mortgage banking activities.  Expenses consist primarily of 
interest payments on customer deposits and other borrowings and general 
and administrative costs.

     The Bank is regulated by the Office of Thrift Supervision ("OTS") 
and the Federal Deposit Insurance Corporation ("FDIC"), and is subject 
to periodic examination by both entities.  The Bank is also subject to 
the regulations of the Board of Governors of the Federal Reserve System 
("FRB"), which establishes rules regarding reserves that must be 
maintained against customer deposits.


FINANCIAL CONDITION

ASSETS

     The Company's total assets as of March 31, 1999, were $732.4 
million, a decrease of $3.7 million from September 30, 1998, the prior 
fiscal year end.

     During the six months ended March 31, 1999, securities available 
for sale decreased $1.7 million, which was the result of the sale of a 
taxable municipal obligation.

     Included in mortgage-backed securities available for sale as of 
March 31, 1999, are $4.1 million in interest-only strips, which consist 
of excess mortgage servicing rights established at the time of various 
loan sales in accordance with Statement of Financial Accounting 
Standards ("SFAS") No. 125, "Accounting for Transfers and Servicing 
of Financial Assets and Extinguishments of Liabilities."  These are 
more fully described in the notes to consolidated financial statements.  
Derivative financial instruments are carried at estimated fair value in 
accordance with SFAS No. 115, "Accounting for Certain Investments in 
Debt and Equity Securities."  The Bank does not actively trade in 
derivative financial instruments and management does not currently use 
derivative financial instruments to manage interest rate risk or for 
other hedging strategies.

     As the Bank originates mortgage loans each month, management 
evaluates the existing market conditions to determine which loans will 
be held in the Bank's portfolio and which loans will be sold in the 
secondary market.  Loans sold in the secondary market can be sold with 
servicing released or converted into MBS and sold with the loan 
servicing retained by the Bank.  At the time of each loan commitment, a 
decision is made to either hold the loan for investment, hold it for 
sale with servicing retained, or hold it for sale with servicing 
released.  Management  monitors market conditions to decide whether 
loans should be held in portfolio or sold and if sold, which method of 
sale is appropriate.  During the six months ended March 31, 1999, the 
Bank originated $221.7 million in mortgage loans held for sale, $95.1 
million in mortgage loans held for investment, and $14.4 million in 
other loans.  This total of $331.2 million in loans originated was an 
increase of $62.0 million over the six months ended March 31, 1998.

                                   10
<PAGE>

     Included in the $108.0 million in loans held for sale as of March 
31, 1999, are $7.3 million in mortgage loans held for sale with 
servicing released.  Also included in loans held for sale as of March 
31, 1999, are $0.5 million in commercial residential loans insured by 
the Federal Housing Administration ("FHA").  The Bank holds options to 
sell these insured loans back to the FHA during specified periods in the 
future at specified prices.  All loans held for sale are carried at the 
lower of cost or fair value.

     The Bank classifies problem assets as "substandard," "doubtful" 
or "loss."  Substandard assets have one or more defined weaknesses, 
and it is possible that the Bank will sustain some loss unless the 
deficiencies are corrected.  Doubtful assets have the same defects as 
substandard assets plus other weaknesses that make collection or full 
liquidation improbable.  Assets classified as loss are considered 
uncollectible and of such little value that a specific loss allowance is 
warranted.

     The following table summarizes the Bank's classified assets as 
reported to the OTS.  Dollar amounts are expressed in thousands.

                            3/31/99   9/30/98   3/31/98
                           -----------------------------
Asset Classification:
  Substandard              $ 12,535    10,772    10,889
  Doubtful                        6         8        10
  Loss                        2,500     1,956     3,245
                           -----------------------------
                             15,041    12,736    14,144
   Allowance for losses      (7,921)   (7,701)  (10,002)
                           -----------------------------
                           $  7,120     5,035     4,142
                           =============================


     Total classified assets increased $2.3 million during the six 
months ended March 31, 1999, primarily due to the classification of one 
commercial mortgage-backed security.  The issuers of this security, 
which is secured by a retirement complex, did not pay the most recent 
semi-annual payment.  $2.3 million of this security was classified as 
substandard and $0.6 million was classified as loss.  Management is 
currently negotiating an amended payment schedule with the borrowers.

     When an insured institution classifies problem assets as either 
substandard or doubtful, regulations require specific loss allowances to 
reduce their book value to fair value.  In addition, management 
establishes GVA ("general valuation allowances") for other possible 
loan losses.  GVA are allowances that recognize the inherent risks 
associated with lending activities but, unlike specific allowances, have 
not been allocated to particular problem assets.  When an association 
classifies a problem asset as loss, it is required to establish a 
specific allowance for 100% of the asset balance.  The Bank's 
classification of its assets and the amount of its valuation allowances 
are subject to review by the OTS who may require additional GVA or 
specific loss allowances. 

     Management believes that the specific loss allowances and GVA are 
adequate.  While management uses available information to determine 
these allowances, future allowances may be necessary because of changes 
in economic conditions.  Also, regulatory agencies (OTS and FDIC) review 
the Bank's allowance for loss as part of their examinations, and they 
may require the Bank to recognize additional loss provisions based on 
the information available at the time of their examinations.

LIABILITIES AND EQUITY  

     Customer deposit accounts decreased $3.0 million during the six 
months ended March 31, 1999.  The weighted average rate on customer 
deposits as of March 31, 1999, was 4.79%, a decrease from 5.18% as of 
March 31, 1998. 

                                   11
<PAGE>


     Advances from the Federal Home Loan Bank were $106.1 million as of 
March 31, 1999, a decrease of $3.1 million from September 30, 1998.  
During the six-month period, the Bank borrowed $19.0 million of new 
advances and repaid $22.1 million.  Management uses FHLB advances at 
various times as an alternate funding source to provide operating 
liquidity and to fund the origination and purchase of mortgage loans.

     Escrows were $3.1 million as of March 31, 1999, a decrease of $2.8 
million from September 30, 1998.  This decrease is primarily due to 
amounts paid for borrowers' taxes during the fourth calendar quarter of 
1998. 

     Total stockholders' equity as of March 31, 1999, was $75.4 million 
(10.29% of total assets).  This compares to a book value of $69.8 
million (9.49% of total assets) at September 30, 1998.  On a per share 
basis, stockholders' equity was $8.34 on March 31, 1999, compared to 
$7.72 on September 30, 1998.

     The Company paid cash dividends on its common stock of $0.0625 on 
November 30, 1998, and $0.08 on February 26, 1999.  Subsequent to the 
quarter ended March 31, 1999, the Company announced a cash dividend of 
$0.08 per share to be paid on May 28, 1999, to stockholders of record as 
of May 7, 1999.

     Total stockholders' equity as of March 31, 1999, includes an 
unrealized loss of $412,000, net of income tax, on available for sale 
securities in accordance with SFAS No. 115.  

RATIOS

     The following table illustrates the Company's return on assets 
(annualized net income divided by average total assets); return on 
equity (annualized net income divided by average equity); equity-to-
assets ratio (ending equity divided by ending total assets); and 
dividend payout ratio (dividends paid divided by net income).


                                 Six months ended
                              ----------------------
                               3/31/99      3/31/98
                              ----------------------
Return on average assets         1.75%        1.73%
Return on average equity        17.69%       20.41%
Equity-to-assets ratio          10.29%        8.84%
Dividend payout ratio           19.96%       15.90%


RESULTS OF OPERATIONS - Comparison of three months and six months ended 
March 31, 1999, and 1998.

     For the three months ended March 31, 1999, the Company had net 
income of $3,408,000 or $0.38 per share.  This compares to net income of 
$3,202,000 or $0.36 per share for the quarter ended March 31, 1998.

     Net income for the six months ended March 31, 1999, was $6,422,000 
or $0.71 per share compared to net income of $6,335,000 or $0.71 per 
share during the same period in the prior year.

NET INTEREST MARGIN  

     The Company's net interest margin is comprised of the difference 
("spread") between interest income on loans, MBS and investments and 
the interest cost of customer deposits and other borrowings.  Management 
monitors net interest spreads and, although constrained by certain 
market, economic, and competition factors, it establishes loan rates and 
customer deposit rates that maximize net interest margin.

                                   12
<PAGE>

     The following table presents the total dollar amounts of interest 
income and expense on the indicated amounts of average interest-earning 
assets or interest-costing liabilities for the three months ended March 
31, 1999, and 1998.  Average yields reflect reductions due to non-
accrual loans.  Once a loan becomes 90 days delinquent, any interest 
that has accrued up to that time is reserved and no further interest 
income is recognized unless the loan is paid current.  Average balances 
and weighted average yields for the periods include all accrual and non-
accrual loans.  The table also presents the interest-earning assets and 
yields for each respective period.  Dollar amounts are expressed in 
thousands.

                                   Six months ended 3/31/99     As of 
                                  ---------------------------  3/31/99
                                   Average            Yield/   Yield/
                                   Balance  Interest   Rate     Rate
                                  -------------------------------------
Interest-earning assets
  Loans                          $ 660,039    28,936   8.77%    7.93%
  Mortgage-backed securities        29,780     1,067   7.17%    6.48%
  Investments                       17,298       448   5.18%    7.93%
  Bank deposits                     11,750       282   4.80%    4.43% 
                                  -------------------------------------
    Total earning assets           718,868    30,733   8.55%    7.85%
                                            ---------------------------
Non-earning assets                  22,827 
                                  ---------
      Total                      $ 741,695
                                  =========
Interest-costing liabilities
  Customer deposits accounts     $ 545,994    13,025   4.77%    4.79%
  FHLB Advances                    112,729     3,292   5.84%    5.76%
  Other borrowings                     179         7   7.84%    7.50%
                                  -------------------------------------
    Total costing liabilities      658,902    16,324   4.95%    4.95%
                                            ---------------------------
Non-costing liabilities              9,752 
Stockholders' equity                73,041
                                  ---------
      Total                      $ 741,695 
                                  =========
Net earning balance              $  59,966 
                                  =========
Earning yield less costing rate                        3.60%    2.90%
                                                      ================
Average interest-earning assets,
  net interest, and net yield
  spread on average interest-
  earning assets                 $ 718,868    14,409   4.01%
                                  ==========================



                                   Six months ended 3/31/98     As of 
                                  ---------------------------  3/31/98
                                   Average            Yield/   Yield/
                                   Balance  Interest   Rate     Rate
                                  -------------------------------------
Interest-earning assets
  Loans                          $ 628,589    28,652   9.12%    8.09%
  Mortgage-backed securities        48,957     1,672   6.83%    6.84%
  Investments                       20,475       705   6.89%    6.90%
  Bank deposits                      9,347       275   5.91%    5.13%
                                  -------------------------------------
    Total earning assets           707,368    31,304   8.85%    7.96%
                                            ---------------------------
Non-earning assets                  25,433
                                  ---------
      Total                      $ 732,801
                                  =========
Interest-costing liabilities	
  Customer deposits accounts     $ 524,702    13,385   5.10%    5.18%
  FHLB Advances                    135,365     4,126   6.10%    6.05%
  Other borrowings                   1,454        43   5.91%    7.50%
                                  -------------------------------------
    Total costing liabilities      661,521    17,554   5.31%    5.36%
                                            ---------------------------
Non-costing liabilities              8,899
Stockholders' equity	               62,391
                                  ---------
      Total                      $ 732,801
                                  =========
Net earning balance              $  45,847
                                  =========
Earning yield less costing rate                        3.54%    2.60%
                                                      ================
Average interest-earning assets,
  net interest, and net yield
  spread on average interest-
  earning assets                 $ 707,368    13,750   3.89%	
                                  ==========================


     The following table provides information regarding changes in 
interest income and interest expense.  For each category of interest-
earning asset and interest-costing liability, information is provided on 
changes attributable to  (1) changes in volume (change in volume 
multiplied by the old rate),  (2) changes in rates (change in rate 
multiplied by the old volume), and  (3) changes in rate and volume 
(change in rate multiplied by the change in volume).  Average balances, 
yields and rates used in the preparation of this analysis come from the 
preceding table.  Dollar amounts are expressed in thousands.




<TABLE>
<CAPTION>
                                          Six months ended March 31, 1999, compared to 
                                                six months ended March 31, 1998
                                        -----------------------------------------------
                                                                     Yield/	
                                           Yield         Volume      Volume      Total
                                        -----------------------------------------------
  <S>                                    <C>           <C>         <C>         <C>
Components of interest income:					
  Loans                                $  (1,100)        1,434         (50)        284
  Mortgage-backed securities                  84          (655)        (34)       (605)
  Investments                               (175)         (109)         27        (257)
  Other assets                               (52)           71         (12)          7
                                        -----------------------------------------------
Net change in interest income             (1,243)          741         (69)       (571)
                                        -----------------------------------------------
 
Components of interest expense:					
  Customer deposit accounts                 (866)          543         (37)       (360)
  FHLB Advances                             (176)         (690)         32        (834)
  Other borrowings                            14           (38)        (12)        (36)
                                        -----------------------------------------------
Net change in interest expense            (1,028)         (185)        (17)     (1,230)
                                        -----------------------------------------------
  Increase (decrease) in net 
    interest margin                    $    (215)          926         (52)        659
                                        ===============================================

</TABLE>


                                   13
<PAGE>

     Net interest margin before loan loss provision in the three months 
ended March 31, 1999, increased $276,000 from the quarter ended March 
31, 1998.  Of the decrease in total interest income of $370,000, 
approximately $307,000 occurred in the MBS and investments categories 
due to a decrease in average balances.  These decreases in interest 
income were more than offset by a decrease in interest expense of 
$646,000.  This decrease in interest expense was due primarily to a 
decrease in the average balance of FHLB Advances.

     Net interest margin before loan loss provision in the six months 
ended March 31, 1999, increased $659,000 from the six months ended March 
31, 1998.  Although the average balances of total interest-earning 
assets increased $11.5 million from the prior year, this was more than 
offset by a decrease in the yield on average interest earning assets of 
30 basis points.  Total interest income for the six months ended March 
31, 1999, decreased $571,000 from the prior year.  The decrease in total 
interest expense of $1.2 million was due primarily to a $22.6 million 
decrease in the average balance of FHLB Advances.  Also, the average 
cost of advances during the six months ended March 31, 1999, was 5.84%, 
down 26 basis points from the same period in the prior year.  Customer 
deposits had an average cost of 4.77% during the six months ended March 
31, 1999, compared to 5.10% in the prior year.  This was offset by an 
increase in the average balance of customer deposits of $21.3 million.  
The remainder of the increase in net interest margin is attributed to 
the increase in retained earnings, which increased the net earning 
balance.

     The Company's net interest margin is impacted by changes in market 
interest rates, which have varied greatly over time.  Changing interest 
rates affect the level of prepayments on mortgages, the demand for new 
mortgage loans, and the supply and interest cost of customer deposits 
and borrowings used to fund interest-earning assets.  Management 
monitors the Company's net interest spreads (the difference between 
yields received on assets and paid on liabilities) and, although 
constrained by market conditions, economic conditions, and prudent 
underwriting standards, it offers deposit rates and loan rates that 
maximize net interest income.  Management does not predict interest 
rates, but instead attempts to fund the Company's assets with 
liabilities of a similar duration to minimize the impact of changing 
interest rates on the Company's net interest margin.  Since the relative 
spread between financial assets and liabilities is constantly changing, 
the Company's current net interest spread may not be an indication of 
future net interest income.

PROVISION FOR LOAN LOSSES

     The Company's provision for loan losses of  $75,000 during the 
quarter ended March 31, 1998, was a decrease of $233,000 over the three 
months ended March 31, 1998.  The provision for loan losses of $150,000 
during the six months ended March 31, 1999, decreased $164,000 over the 
six month period ended March 31, 1998.  During the three months and six 
months ended March 31, 1998, the provision for loan losses was increased 
to adjust the valuation allowances to levels proportionate with the 
increased amount of mortgage lending activities. 

     As stated above, management believes that the provisions for loss 
are adequate.  These provisions can fluctuate based on changes in 
economic conditions or changes in the information available to 
management.  Also, regulatory agencies review the Company's allowances 
for loss as a part of their examination process and they may require 
changes in loss provision amounts based on information available at the 
time of their examination.  Management establishes allowances for loss 
based on current economic values and any disruptions in the real estate 
market could cause management to increase the provision for loss.     

OTHER OPERATING INCOME

     Other operating income for the three months ended March 31, 1999, 
increased $565,000 from the same period in the prior year.  
Specifically, loan servicing fees increased $106,000 and gains on sale 
of loans held for sale increased $261,000 due to an increase in loan 
sale volume.  Also during the quarter ended March 31, 1999, the reserve 
for impairment on capitalized mortgage servicing rights was reduced by 
$207,000, which was the result of a decrease in prepayments and 
estimated prepayment speeds of the underlying mortgage loans.  These 
increases to other operating income were offset by a decrease in 
customer service fees of $78,000. 

     Other operating income for the six months ended March 31, 1999, 
increased $1.1 million from the same period in the prior year.  
Specifically, loan servicing fees decreased $341,000 due to an increase 
in amortization of capitalized mortgage servicing rights.  This was 
offset by an increase of $1.3 million in gains on loan sales due to an 
increase in loan sale volume.  

                                   14
<PAGE>

Also, the reserve for impairment on capitalized mortgage servicing 
rights was reduced by $103,000 during the six months ended March 31, 
1999, which was a result of an decrease in prepayments and estimated 
prepayment speeds of the underlying mortgage loans.


GENERAL AND ADMINISTRATIVE EXPENSES

     Total general and administrative expenses for the quarter ended 
March 31, 1999, increased $602,000 from the same quarter in the prior 
year.  Total general and administrative expenses for the six months 
ended March 31, 1999, increased $1.6 million from the prior year.  These 
increases for the three-month and six-month periods were primarily due 
to increases in compensation and fringe benefits, which was related to 
an increase in staffing and other expenses in the construction lending 
and mortgage loan origination departments commensurate with an increase 
in loan origination volume.

INCOME TAXES

     The Company accounts for income taxes in accordance with SFAS No. 
109, "Accounting for Income Taxes."  The most recent audit of the 
Bank's tax returns by the Internal Revenue Service was completed during 
the quarter ended June 30, 1996.  

YEAR 2000 ISSUE

     The Board of Directors and the management of the Company have 
established a formal plan to evaluate and correct the problems that the 
year 2000 could cause to the Company's critical automated systems. The 
year 2000 problem exists because many automated systems use only two 
digit fields to represent the year, such as "98" representing 1998.  
However, with the two digit format, the year 2000 is indistinguishable 
from 1900, 2001 from 1901, and so on.  Should these critical systems 
fail in the year 2000, the Company would have difficulty in processing 
transactions for loan and deposit customers, which could cause 
significant damage to the Company's important customer relationships.  
Since the Company does not develop any of the software programs that are 
utilized, the process is focused on follow-up and testing of software 
provided by third party vendors and data centers to ensure their 
renovation. 

     In calendar year 1997, management implemented a year 2000 process 
using the standard framework set forth by the Federal Financial 
Institutions Examination Council, which includes separate phases for 
awareness, assessment, renovation, validation, and implementation.  In 
the awareness phase, management committed resources and established a 
year 2000 committee consisting of managers from all departments of the 
Company.  This committee proceeded through the assessment phase, which 
included an analysis of the year 2000 impact on all hardware, software, 
and electronic equipment; identifying the Company's critical business 
processes; developing priorities by risk; gaining commitment from 
vendors and service providers; and evaluating the impact on the Bank's 
customers.  The renovation phase included the replacement or elimination 
of non-compliant software, hardware, and vendors.  In the validation 
phase, the committee tested all renovated systems and all data exchanges 
with outside organizations.  In the implementation phase, all renovated 
systems were put into service.  The validation and implementation phases 
were completed as of March 31, 1999.  During fiscal 1998, the OTS 
performed an on-site examination of the Bank's year 2000 process.  The 
Bank underwent a second year 2000 examination by the OTS during February 
1999.

     Data processing of the Bank's core operations is provided by a 
third party service bureau.  In November 1998, the Bank's service bureau 
installed its fully renovated year 2000 compliant software.  The Bank 
has actively participated in testing procedures and it continues to 
prudently monitor the progress reports received from the vendor.  The 
Company's year 2000 plan also includes the evaluation of phone systems, 
alarm systems, funds transfer providers, and all hardware and software 
on its wide-area network ("WAN").  Management estimates that the year 
2000 implementation plan will cost approximately $400,000, most of which 
is the cost of capitalized computer hardware for the WAN.  Approximately 
90% of this cost has been incurred as of March 31, 1999.  

     The Company finalized its year 2000 contingency plan and business 
resumption contingency plan during the quarter ended March 31, 1999, for 
each of the Company's critical automated systems.  The contingency plan 
will be implemented if any of the critical systems should fail to become 
year 2000 compliant by certain target dates.  The business resumption 
plan 

                                   15
<PAGE>

will be implemented if any of the critical systems should fail on 
January 1, 2000.  Management plans to make updates to the contingency 
plans on an ongoing basis throughout the 1999 calendar year.  The third 
party service bureau has also formulated contingency and business 
resumption plans, which management has incorporated into the Company's 
overall contingency plans.

     The Board of directors are updated on the status of the year 2000 
plan at regular intervals.  Management believes that the Company's year 
2000 plan is adequate to ensure that all mission critical systems will 
be year 2000 compliant.


REGULATION

     The Bank is a member of the FHLB System and its customers' deposits 
are insured by the Savings Association Insurance Fund ("SAIF") of the 
FDIC.  The Bank is subject to regulation by the OTS as its chartering 
authority.  Since passage of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 ("FIRREA" or the "Act"), the 
FDIC also has regulatory control over the Bank.  The transactions of 
SAIF-insured institutions are limited by statute and regulations that 
may require prior supervisory approval in certain instances.  
Institutions also must file reports with regulatory agencies regarding 
their activities and their financial condition.  The OTS and FDIC make 
periodic examinations of the Bank to test compliance with the various 
regulatory requirements.  The OTS can require an institution to re-value 
its assets based on appraisals and to establish specific valuation 
allowances.  This supervision and regulation is intended primarily for 
the protection of depositors.  Also, savings institutions are subject to 
certain reserve requirements under Federal Reserve Board regulations.

INSURANCE OF ACCOUNTS

     The SAIF insures the Bank's customer deposit accounts to a maximum 
of $100,000 for each insured member.  Deposit insurance premiums are 
determined using a Risk-Related Premium Schedule ("RRPS"), a matrix 
which places each insured institution into one of three capital groups 
and one of three supervisory groups.  Currently, deposit insurance 
premiums range from 0 to 27 basis points of the institution's total 
deposit accounts, depending on the institution's risk classification.  
The Bank is currently considered "well capitalized", which is the most 
favorable capital group and supervisory subgroup.  SAIF-insured 
institutions are also assessed a premium of 0.61% of insured deposits to 
service the interest on Financing Corporation ("FICO") debt. 

REGULATORY CAPITAL REQUIREMENTS

     At March 31, 1999, the Bank exceeds all capital requirements 
prescribed by the OTS.  To calculate these requirements, a thrift must 
deduct any investments in and loans to subsidiaries that are engaged in 
activities not permissible for a national bank.  As of March 31, 1999, 
the Bank did not have any investments in or loans to subsidiaries 
engaged in activities not permissible for national banks.

     The following tables summarize the relationship between the Bank's 
capital and regulatory requirements.  Dollar amounts are expressed in 
thousands.

At March 31, 1999                                     Amount
----------------------------------------------------------------
GAAP capital (Bank only)                            $  70,280
Adjustment for regulatory capital:		
  Intangible assets                                    (1,624)
  Disallowed portion of servicing assets	                (554)
  Reverse the effect of SFAS No. 115                      205
                                                     ---------
    Tangible capital                                   68,307
  Qualifying intangible assets                          1,495
                                                     ---------
    Tier 1 capital (core capital)                      69,802
  Qualifying general valuation allowance	               4,555
                                                     ---------
       Risk-based capital	                          $  74,357
                                                     =========

                                   16
<PAGE>


<TABLE>
<CAPTION>
                                                                 As of March 31, 1999
                                            -------------------------------------------------------------------
                                                                  Minimum required for     Minimum required to be
                                                   Actual           Capital Adequacy        "Well Capitalized"
                                            -------------------  ----------------------  -----------------------
                                             Amount     Ratio        Amount     Ratio       Amount     Ratio
                                            -------------------  ----------------------  -----------------------
<S>                                        <C>        <C>          <C>         <C>        <C>        <C>
Total capital to risk-weighted assets      $ 74,357     14.5%        41,066      >=8%       51,333     >=10%
Core capital to adjusted tangible assets     69,802      9.6%        29,187      >=4%       36,483      >=5%
Tangible capital to tangible assets          68,307      9.4%        10,945     >=1.5%          --       --
Tier 1 capital to risk-weighted assets       69,802     13.6%            --        --       30,800      >=6%

</TABLE>


INTEREST RATE RISK COMPONENT

     The OTS has adopted a rule which requires savings institutions with 
a "greater than normal" level of interest rate exposure to deduct 
amounts from their total capital for the purpose of calculating the 
risk-based capital requirement.  The deduction is an amount equal to 
one-half of the difference between the institution's measured exposure 
and the "normal" exposure level (i.e., 2% of the estimated economic 
value of the institution's assets).  The rule measures interest rate 
risk as the decline in Net Portfolio Value that would result from a 200 
basis point increase or decrease in market interest rates.  The rule 
sets forth a description of valuation methodologies for assets, 
liabilities, and off-balance sheet items.  Subsidiaries that are deemed 
to be controlled by an institution under generally accepted accounting 
principles will be consolidated for purposes of calculating interest 
rate risk.  Although the interest rate component was originally 
scheduled to become effective by December 31, 1994, the OTS has notified 
institutions to delay implementation until further notice. 

LOANS TO ONE BORROWER

     Institutions are prohibited from lending to any one borrower in 
excess of 15% of the Bank's unimpaired capital plus unimpaired surplus, 
or 25% of unimpaired capital plus unimpaired surplus if the loan is 
secured by certain readily marketable collateral.  Renewals that exceed 
the loans-to-one-borrower limit are permitted if the original borrower 
remains liable and no additional funds are disbursed.  As of March 31, 
1999, the Bank had no loans that exceeded the loans to one borrower 
limit.

INVESTMENT IN SUBSIDIARIES

     Investments in and extensions of credit to subsidiaries not engaged 
in activities permissible for national banks must generally be deducted 
from capital.  As of March 31, 1999, the Bank did not have any 
investments in or advances to subsidiaries engaged in activities not 
permissible for national banks.


LIQUIDITY AND CAPITAL RESOURCES

     The Bank generates liquidity primarily from savings deposits and 
repayments on loans, investments, and mortgage-backed securities.  
Liquidity measures the ability to meet deposit withdrawals and lending 
commitments.  For secondary sources of liquidity, the Bank has the 
ability to sell assets held for sale, can borrow from primary securities 
dealers on a collateralized basis, and can use the FHLB of Des Moines' 
credit facility.  The Bank, as a member of the FHLB System, is subject 
to regulations that require the maintenance of liquidity ratios (daily 
average liquid assets as a percentage of net withdrawable customer 
deposits and current borrowings).  The regulatory liquidity requirement 
may vary depending on economic conditions and activity of customer 
deposits.  For the month of March 1999, the required liquidity ratio was 
4%, and the Bank's average regulatory liquidity ratio was 16.7%.

     Fluctuations in the level of interest rates typically impact 
prepayments on mortgage loans and MBS.  During periods of falling 
interest rates, these prepayments increase and a greater demand exists 
for new loans.  The Bank's customer deposits are partially impacted by 
area competition.  Management is not currently aware of any other market 
or economic conditions that could materially impact the Bank's future 
ability to meet obligations as they come due.

                                   17
<PAGE>

                       PART II - OTHER INFORMATION


Item 1. Legal Proceedings
          There were no material proceedings pending other than ordinary 
          and routine litigation  incidental to the business of the 
          Company.


Item 2. Changes in Securities
          None.


Item 3. Defaults Upon Senior Securities
          None.


Item 4. Submission of Matters to a Vote of Security Holders.
          The annual stockholders' meeting was held on January 26, 1999.  
          The following persons were elected to NASB Financial Inc.'s 
          Board of Directors:

               Barrett Brady
               Walter W. Pinnell
               James A. Watson

          The firm of Deloitte & Touche was ratified for appointment as 
          independent auditors for the 1999 fiscal year.

          The stockholders approved a proposed amendment to the 
          Company's Articles of Incorporation to increase the authorized 
          Common Stock of the Company from 3,000,000 shares to 
          20,000,000 shares and to reduce the par value of Common Stock 
          from $1.00 per share to $0.15 per share.


Item 5. Other Information
          None.


Item 6. Exhibits and Reports on Form 8-K
          None.


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                          S I G N A T U R E S   


     Pursuant to the requirements 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.





                                        NASB FINANCIAL, INC.
                                            (Registrant)



May 13, 1999                            By: /s/ David H. Hancock
                                            David H. Hancock
                                            Chairman and 
                                            Chief Executive Officer




May 13, 1999                            By: /s/ Keith B. Cox
                                            Keith B. Cox
                                            Vice President and Treasurer



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